Technical roundup 15 February

Feb 14, 2019

Developments of interest this week are set out below.   

Ireland                 

  • Chartered Accountants Ireland has issued its comments on the updated views of the UK Competition and Markets Authority (‘CMA’) regarding steps that may be taken in order to enhance market choice, competition, quality and resilience, issued in December.  The letter of comment can be read here
  • The CRO has issued its regular gazette.

UK

  • The UK government has announced terms of reference for the next stage in its review of audit quality and effectiveness.  Sir Donald Brydon will lead work to develop recommendations as to how audit can better address changing expectations and needs of users of audited financial statements, and better serve the public interest.  Sir Donald is expected to make a report to the Secretary of State for Business, Energy and Industrial Strategy by the end of 2019.  .
  • The UK government has also issued updated guidance on environmental reporting, relevant to companies and limited liability partnerships.

European

  • The European Supervisory Authorities have published final recommendations regarding amendments to rules relating to provision of information in relation to Packaged Retail and Insurance-based Investment Products (PRIIPs). 

International

  • The IASB has issued its February 2019 update, noting progress on current projects, which include consideration of how management’s commentary in annual reports can be enhanced, updates to the IFRS for SMEs and enhancements to IFRS 17, Insurance contracts. Future meetings will take each of these topics forward and determine appropriate changes and additions to current standards.
  • The Canadian Accounting Standards Board has prepared a research paper to support IASB’s project to review and update IFRS 6 ‘Exploration for and evaluation of mineral resources’. The paper seeks to identify accounting challenges in the extractive sector. Amongst its findings, the paper notes that

         -  the sector is experiencing pressures as a result of a weak commodity price 
            environment and pipeline capacity constraints
         -  these pressures have cause a decrease of publicly traded entities in the   
            sector, as a result of mergers, acquisitions and bankruptcies.

  • Nick Anderson, a member of IASB, has issued an article discussing reporting of corporate performance and how the quality of reported profits may be best understood. Questions he suggests are relevant include:

          -   How much capital has been used to generate reported profits?
          -   Does the net profit include gains or expenses that are unlikely to occur in  
              future?
          -   Are reported profits supported by cash flows?
          -   What longer term risks does the entity fact, including environmental matters?

        The article may be accessed here