Welcome to this week’s Technical Roundup.
In developments this week, The Department of Enterprise, Trade, and Employment has this week announced an extension of the interim period in the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, Commissioner McGuinness invites EFRAG to start technical work on draft sustainability reporting standards and proceed with governance reforms as soon as possible; and the FRC has published a Thematic Briefing: The audit of cash flow statements.
Read more on these and other developments that may be of interest to members below.
Financial Reporting
Ahead of the 2021 interim reporting season, a review by the Financial Reporting Council (FRC) has highlighted examples of good practice in company’s interim reporting and areas where further improvements are required. The FRC reviewed the reports of 20 quoted companies across a range of industries to assess the quality of interim reporting. Launching the publication ‘Thematic Review: Interim Reporting’, the FRC’s Executive Director of Supervision, said “Given the ongoing impact of the Covid-19 pandemic, the 2021 interim reporting season is likely to be one of the most important and consequential for users of corporate reports. High-quality reporting is vital for investors and other users of accounts to make better informed decisions about a company’s health and prospects...”
The agenda and papers for the May International Accounting Standards Board (IASB) meeting, to be held on 24-27 May, are available, along with a link to watch the meeting online.
European Financial Reporting Advisory Group (EFRAG), has issued a summary report of the Explanatory Webinar on the IASB’s Request for Information on the Post-Implementation Review of Consolidated Financial Statements, Joint Arrangements and Disclosures – A User’s Perspective, held on 1 March 2021. The aim of the outreach event was to stimulate discussion on the IASB’s Request for Information, and to seek input on investors’ information needs regarding interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities. Also, the recording of the EFRAG TEG webcast meeting of 19 and 20 May 2021, along with agenda and public documents, is available here.
Auditing
IAASA has published its annual Profile of the Profession which contains statistical data regarding the eight Prescribed Accountancy Bodies (‘PABs’) within IAASA’s supervisory remit in Ireland for the year 2020. The Profile, which was compiled with the assistance of the PABs, presents an overview of the PABs’ memberships, student numbers and profiles, as well as the nature and scale of their regulatory and monitoring activities.
The FRC has published a Thematic Briefing: The audit of cash flow statements. The briefing document highlights the results of the FRC's Constructive Engagement key findings and the steps taken by audit firms to strengthen the audit of cash flow statements.
The FRC will be holding an international conference in June entitled ‘Audit Firm Culture: Challenge. Trust. Transformation’ to explore the link between audit firm culture and audit quality with the objective of accelerating the pace of change for cultural transformation in the audit profession. The conference will consist of five lunchtime webinars (Monday 21 June – Friday 25 June) with a range of speakers and panelists. The session topics include Building an audit firm culture that supports high quality audit, The role of the Audit Committee, Developing a mindset of professional scepticism and challenge, Embedding and measuring organisational culture, and Audit firm culture, audit quality and the role of the regulator. You can find out more and register for the sessions at the links above.
Insolvency
The UK Financial Conduct Authority (FCA) has recently issued Guidance for insolvency practitioners on how to approach regulated firms. It is aimed at firms which are authorised or registered by the FCA and provides its view of how an Insolvency practitioner should ensure regulated firms meet their ongoing financial services regulatory obligations following appointment.
Sustainability Reporting
In a recent letter, Commissioner McGuinness has invited European Financial Reporting Advisory Group to launch as soon as possible the necessary technical work to develop draft sustainability reporting standards. This work is to be undertaken in parallel with the negotiations of the proposed Corporate Sustainability Reporting Directive (CSRD). The Commissioner has also asked EFRAG to move ahead with governance reforms.
Accountancy Europe have published a 3-Step Sustainability Assessment for SMEs. This sustainability assessment checklist helps SME accountants and advisors to support their SME clients to build their sustainability profile. It can be the first step to enable a smoother shift to more durable business models and translate these challenges into new opportunities.
Fraud/Anti-Money Laundering
The UK National Crime Agency May 2021 edition of Suspicious Activity Report (SAR) Glossary Codes and Reporting Routes is available now. Also, click here for the NCA webpage on SARs, what their value is and guidance on making a SAR.
The UK Serious Fraud Office has this week launched its business plan 2021/2022. In it is set out its missions and values, successes in 2020/2021 and its key priorities in 2021/2022.
The EU Financial Services, Financial Stability and Capital Markets Union Commissioner (Mairead McGuinness) spoke at the recent AML Intelligence Boardroom Series . She shared some elements of the forthcoming EU plans to combat money laundering. The plans are subject to confirmation and not set in stone but encompass more harmonised rules and a new AML Authority at EU level. The idea is to have common standards, common application and common supervision of our rules. The package is to be unveiled in July this year.
Other areas of interest
The Department of Enterprise, Trade, and Employment has this week announced an extension of the interim period in the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 until 31st December 2021. This extension continues until then provisions for virtual general meetings, leaves in place the threshold at which a company is deemed unable to pay its debts at €50,000 and the extension of examinership to 150 days .
The Department of Enterprise, Trade, and Employment has recently extended eligibility for the Small Business Assistance Scheme for COVID (SBASC). SBASC is for businesses that are down 75% or more of turnover and are not eligible for CRSS or other sector specific grants. Businesses operating from a non-rateable premises such as a home office or hot-desk can now apply for a €4,000 payment to help with fixed costs. Self-employed working from home, wedding planners, on-course bookmakers, travel counsellors & photographers are among those expected to benefit. Further details, including the go-live date for Q2, will be announced shortly. Closing date for Phase 2 applications will be 21 July. The Department also announced the relaunch of the Micro Enterprise Assistance Scheme for companies facing particular hardship and that do not qualify for other government schemes. It will provide a grant of up to €1,000 to businesses with previous turnover of less than €50,000 that meet the other criteria for SBASC.
The European Commission recently issued its Spring 2021 economic forecast. It projects that the EU economy will expand in 2021 and in 2022. Public investment is set to reach its highest level in more than a decade in 2022, labour market conditions are slowly improving and inflation will vary significantly over the course of this year. Follow the link above for more details and the press release.
The UK Financial Services Compensation Scheme wrote recently about the worrying rise in online financial scams. It describes how one in four investment scam victims in the past year were aged over 55, losing nearly £26,000 on average and more than £78 million was lost to brand cloning scams in 2020.The release describes what the UK government is doing to fight scams and provides useful links on signs to look out for and to the booklet A little booklet of Investment scams which provides useful advice on how to protect yourself from investment scams.
The Irish Charities Regulator recently updated its Coronavirus (COVID-19) and Charities FAQ document. Take a look at the latest version here.
For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website.
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