Welcome to the latest edition of Technical Roundup. In developments since the last edition, the Financial Conduct Authority in the UK recently issued a ‘Dear CEO’ letter detailing action needed in response to common control failings identified in anti-money laundering frameworks. The International Accounting Standards Board published its Exposure Draft Business Combinations-Disclosures, Goodwill and Impairment on 14 March 2024. The ED is open for public comment until 15 July 2024. Read more on these and other developments that may be of interest to members below. Financial Reporting EFRAG (the European Financial Reporting Advisory Group) has issued its February 2024 update. This summarises public technical discussions held and decisions taken in the month. The International Accounting Standards Board (IASB) has issued a call for fieldwork participants to explore the potential effects of the tentative agenda decisions. These tentative decisions relate to the entities who would be subject to the expected credit loss model arising from proposed changes to the IFRS for SMEs Accounting Standard. The IASB has published its next Exposure Draft Business Combinations-Disclosures, Goodwill and Impairment on 14 March 2024. This is open for public comment until 15 July 2024. The IFRS Foundation has issued its February 2024 monthly news summary, which covers news and events over the past month. Following the publication of the revised UK Corporate Governance Code earlier this year the FRC updated the guidance and for those stakeholders who wish to download or print copies of the guidance in full starting from 6 March 2024, any future updates will be made on the first Wednesday of the month. A link to the updates log is on the UK Corporate Governance page on the FRC website. The Pre-Emption Group (PEG) arm of the Financial Reporting Council has published its first report monitoring the use of its updated Statement of Principles on the disapplication of pre-emption rights for UK listed companies which give existing shareholders rights of a company priority to participate in future share issues thereby protecting their ownership stakes. Auditing IAASA has published its 2023 quality assurance review reports in respect of seven firms that perform statutory audits of public-interest entities (PIEs) in Ireland. The reports summarise IAASA’s inspection of each firm’s implementation of the International Standard on Quality Management (Ireland) 1 (ISQM 1) which was effective for the first time during this period. IAASA undertook 31 (2022: 35) inspections of audit files, 24 were graded as good audits, (2022: 31) 7 required improvements, (2022: 4) No audit files inspected required significant improvement. The 2023 reports can be accessed here. Anti–money laundering and sanctions The Financial Conduct Authority (FCA) in the UK recently issued a ‘Dear CEO’ letter detailing action needed in response to common control failings identified in anti-money laundering frameworks. The letter was issued to “Annex 1 Financial Institutions “. These entities carry out activities such as financial leasing and providing payment services. Click here for full details of Annex 1 activities. The letter listed common control failings including for example lack of resources for financial crime and inadequate training. Readers can click here for full details of the dear CEO letter. Sustainability EFRAG has announced the addition of three new entities to the “Friends of EFRAG – Sustainability Reporting” community. Greenomy, osapiens and SISB have joined the group, demonstrating their commitment to sustainability reporting and supporting EFRAG’s mission. Accountancy Europe has issued its March Sustainability Update. Central Bank of Ireland The Central Bank of Ireland (CBI) is conducting a comprehensive review of the Consumer Protection Code 2012 (the Code). It has launched its Consultation Paper which is an opportunity for stakeholders to provide feedback on how CBI is proposing to update the Code. The purpose of the review is to deliver an updated and modernised Consumer Protection Code which is centred around firms securing customers’ interests which CBI says is the key to delivering positive consumer outcomes. You can read more about the review here and the consultation paper here. The consultation is open for feedback for three months until 7 June 2024.  CBI will then consider submissions received and publish the final revised Code in 2025 alongside a feedback statement. CBI also recently launched its first quarterly bulletin of 2024 which you can read here. The Governor of the Central Bank wrote to the Minister for Finance in January 2024 outlining his financial regulation priorities for 2024 and readers can access the letter here. Readers may also find some of the topics in CBI Regulatory & Supervisory Outlook 2024 published recently of interest. The outlook gives an overview of risk themes and risk areas including climate and other environmental –related risks and financial crime risks. It outlines supervisory priorities and under the heading “legal and regulatory” provides a summary of key regulatory initiatives for 2024.It considers various sectors including the credit union sector and the insurance and re-insurance sector. There is also a section on a supervisory perspective on artificial intelligence and a spotlight on financial crime. Other news The Charities Regulator reported in its recent newsletter that it has removed four charities from the Register of Charities for failing to file an annual report despite being required by law to do so. The Regulator also initiated prosecution actions against a further eight charities that have failed to file at least one annual report with the Regulator. These organisations are among over 1,700 charities contacted by the Charities Regulator in a targeted compliance programme to improve compliance with annual reporting obligations. Please click here to read the full article in the Charities Regulators newsletter. Minister for Enterprise Trade and Employment, Simon Coveney TD, has launched Powering Prosperity – Ireland’s Offshore Wind Industrial Strategy.  The strategy’s vision is to build a vibrant and impactful new offshore wind energy (OWE) sector by the end of this decade and hopes to create up to 5,000 jobs in this area. The Business Law Committee of the Law Society has published an in-depth article on revised Central Bank of Ireland (CBI) Administrative Sanctions Procedure (ASP) Guidelines. The FRC has updated the guidance on the revised UK Corporate Governance Code. It is now a live document containing links to relevant publications and this will allow it to be reviewed to ensure it remains accurate and up-to-date. As we approach the European Parliament elections, which are due to take place across Europe in June, Accountancy Europe have announced an upcoming campaign which intends to promote these elections. The first event entitled “Democracy in action: Discussing Inflation and the Sustainability Agenda” will take place on April 16. The Financial Conduct Authority (FCA) has announced that it will investigate the use of personal guarantees in certain UK entities. An Garda Síochána, Garda National Cyber Crime Bureau (AGS) has recently produced a booklet Cybercrime Risks and Prevention Tips which it says aims to enhance awareness of this type of crime as AGS sees more people using the online world as their primary means of interacting. Minister for Enterprise, Trade and Employment, Simon Coveney TD, and Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman TD, have brought the right to request remote working arrangements for all employees and the right to request flexible working arrangements for parents and carers into operation. They have also approved and published the Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working. For further technical information and updates please visit the Technical Hub on the Institute website.      This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.  

Welcome to the latest edition of Technical Roundup. In developments since the last edition, IAASA has published a consultation paper on its proposal to adopt a Sustainability Assurance Standard in Ireland. The effective date of the standard will be for financial years starting on or after 1 January 2024. The Chartered Institute of Public Finance and Accountancy (CIPFA) has announced the appointment of Owen Mapley as its new Chief Executive Officer as the current CEO, Rob Whiteman, prepares for retirement. Read more on these and other developments that may be of interest to members below. Financial Reporting EFRAG, the European Financial Reporting Advisory Group, is inviting feedback on the Post-Implementation Review of IFRS 16 Leases via a survey which remains open until 15 April 2024. EFRAG’s survey on the IASB Exposure Draft on Financial Instruments with Characteristics of Equity remains open until 8 March 2024. The Financial Reporting Council (FRC) has published a consultation on proposed revisions to Technical Actuarial Standard 200 (TAS 200).  The proposed revisions include changes to support practitioners in considering the implications for actuarial work of the FCA’s Consumer Duty principle and the removal of provisions that are already sufficiently addressed in the FRC’s General Actuarial Standards. The FRC has announced the successful signatories to the UK Stewardship Code following the latest round of applications. There are now 273 signatories to the Code, representing £43.3 trillion assets under management. With the publication of the revised Corporate Governance Code, the FRC is undertaking a fundamental review of the UK Stewardship Code 2020 (the Code) to ensure it supports growth and the UK’s competitiveness. The IFRS Foundation has published a summary of evidence gathered by national standards-setters on the effects of guidance on materiality judgements in IFRS Accounting Standards. The International Sustainability Standards Board (ISSB) has published a webcast which highlights the importance of industry-specific disclosures to investors. In addition to this, educational material which is designed to help companies using the SASB Standards meet the requirements of IFRS S1, has also been published. Accountancy Europe has issued its February 2024 Newsletter detailing publications, updates and topical items in the month. Anti–money laundering and sanctions The headquarters of AMLA, the EU’s new Anti-Money Laundering Authority, has been awarded to Frankfurt. The new authority is the centrepiece of an anti-money laundering package from the European Commission that aims to protect communities across Europe from criminal and terrorist activities by denying them access to the financial system. Click here for an Irish government statement on the selection. There has been a recent change in the law in relation to UK domestic politically exposed persons (PEPs). New regulations which took effect on 10 January 2024, provide that for the purpose of assessing risk, the starting point is that domestic (i.e.UK) PEPs present a lower level of risk than non-domestic PEPs. If no enhanced risk factors are present, the extent of enhanced customer due diligence measures to be applied in relation to that customer or potential customer is less than the extent to be applied in the case of a non-domestic PEP. Please click here for an article with links to the new regulation. On the sanctions front, the UK government has recently published its UK first sanctions strategy (22 February 2024). The strategy addresses how it uses sanctions as a foreign and security policy tool. It sets out the continued investment, partnerships and structures that support UK government sanctions and the cross-government architecture built to deliver sanctions. It outlines the partnerships developed with the private sector, NGOs, and international partners, and the steps being taking to strengthen sanctions implementation and enforcement. Sustainability EFRAG has launched three educational videos which are dedicated to the ESRS Listed SME and Voluntary SME Exposure drafts, which were released for public consultation in January. IAASA has published a Consultation paper on its proposal to adopt a Sustainability Assurance Standard in Ireland. The effective date of the standard will be for financial years starting on or after 1 January 2024.  IAASA has identified three possible options for a sustainability assurance standard in Ireland and is seeking stakeholders’ views on the appropriate choice. The International Sustainability Standards Board (ISSB) has released its February 2024 update and podcast, which reflects on topical matters in the month. Around 1,000 companies, investors and regulators met on 22 February at the IFRS Sustainability Symposium in New York City to exchange insights on the introduction of the ISSB. To support regulators as they plan their journey to adopt the Standards the IFRS Foundation has published the Preview of the Inaugural Jurisdictional Guide for the adoption or other use of ISSB Standards. The International Federation of Accountants (IFAC), in conjunction with AICPA & CIMA, has published an updated report entitled “The State of Play: Sustainability Disclosure and Assurance 2019-2022, Trends & Analysis”. The report notes some positive trends in 2022 in relation to sustainability reporting, it also highlighted the need for companies worldwide to move toward a global system of sustainability disclosure requirements. Legislation recently enacted and draft The Irish Digital Services Act 2024 was passed into law on 11 February 2024 and came into force from 17 February 2024. Read more about this legislation and the European regulation commonly also referred to as the Digital Services Act which applies in full in all Member States from 17 February 2024 in our recent news item on the digital services legislation. The Credit Union (Amendment) Act 2023 which amends the Credit Union Act 1997 was signed into law in December 2023. Statutory instrument No. 57 of 2024 was issued on 21 February 2024 and commences the 2023 Act in phases, the first two of which are 22 February and 8 April 2024. Please click the link for a recent news item which outlines some of the provisions of the 2023 amending legislation which may be of interest to our members, including provisions relating to the accounts, board of directors and corporate credit unions. With European lawmakers reaching provisional agreement on the final text of a new Artificial Intelligence Act (AI Act) in December 2023, this article by KPMG analyses what the proposed new framework could mean for developers and users of AI systems. The authors write that businesses are now in a position to consider the role AI plays in their organisation and how to mitigate potential risks that may arise as a result of this new legislative advancement. Click here to read the full article. Following on from the information we brought readers in the last couple of editions of round up on the Economic Crime and Corporate Transparency Act 2023, please click to go to an article written by Maeve Hunt Grant Thornton (NI ) LLP on the next steps (which article was originally published in Practice News February 2024). Other news In February 2024 DETE issued inward investment screening draft guidance setting out information about the responsibilities and obligations arising for third country investors because of the Screening of Third Country Transactions Act 2023 which will introduce a screening mechanism in Ireland for the first time. The legislation was signed into law on 31 October 2023 and readers can click here for an Institute news item on the legislation. The legislation is expected to commence in Q2 of this year. The Chartered Institute of Public Finance and Accountancy (CIPFA) has announced the appointment of Owen Mapley as its new Chief Executive Officer (CEO) as the current CEO, Rob Whiteman, prepares for retirement. Members of the Professional Accounting Team will join the Chartered Accountants Ireland Cork Society on Wednesday March 6th at the Members in Practice Conference: Connecting colleagues where we will present some technical updates to members. You can book your place here for the event. Here are the links to register: one member or Early Bird 3 for 2. The material from a webinar on responsible business initiatives held by the Dept. of Enterprise Trade and Employment on 14 February 2024 has now been made available. Click here to access the presentations on the Corporate Sustainability Reporting Directive, the OECD guidelines for Multinational Enterprises on Responsible Business Conduct and on Eco design for Sustainable Products Regulation. Readers can also click here for the DETE webpage on responsible business which houses a range of publications on Responsible Business obligations in development or underway that businesses must take heed of. For further technical information and updates please visit the Technical Hub on the Institute website.      This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.  

The Financial Reporting Council has issued the first in-depth assessment of the quality of reporting from private companies who have chosen to follow the Wates Principles. The report, which was conducted with the University of Essex, shows that the Wates Principles are the most widely adopted corporate governance code used by large private companies.   The research shows that companies are grasping the spirit of the Wates Principles in their governance reporting. They are using the principles as a tool for self-reflection and improvement, and seeing the yearly governance reporting as an opportunity, not a burden. This research also includes examples of good reporting and acknowledges that it is too early to draw too many conclusions as most companies were in their first cycle of reporting. The financial sector was the biggest adopter of the Wates Principles.

IAASA has published a Consultation paper on its proposal to adopt a Sustainability Assurance Standard in Ireland. The effective date of the standard will be for financial years starting on or after 1 January 2024.  This is required by the European Corporate Sustainability Directive (CSRD). The European Commission has indicated that it intends to adopt a European assurance standard by October 2026, at which time that standard will apply in Ireland. In the absence of a mandatory standard in Ireland, assurance providers could voluntarily perform their work in accordance with an assurance standard such as ISSA 5000 or ISAE 3000. IAASA considers that it is in the public interest that it adopts a single sustainability assurance standard, to promote consistency in approach by assurance providers, provide clarity to users as to the level of assurance being provided, ensure an adequate standard of assurance work and assist IAASA and the recognised accountancy bodies in their regulatory approaches. IAASA has identified three possible options for a sustainability assurance standard in Ireland and is now seeking stakeholders’ views on the appropriate standard for sustainability assurance in Ireland.  These are: the proposed International Standard on Sustainability Assurance 5000 (ISSA 5000),  the extant International Standard on Assurance Engagements 3000 (ISAE 3000) or a local standard. Each of these options is set out in the consultation paper. The consultation paper is available here. Stakeholders and interested parties are invited to provide your response using the response template available on this link or email your response to submissions@iaasa.ie by 19 April 2024.

The Credit Union (Amendment) Act 2023 ("2023 Act") was signed into law in December 2023 and is being commenced in phases. See statutory instrument No. 57 of 2024. Below we set out some provisions of the amending legislation which may be of interest to our members. Provisions relating to the accounts. The requirement that the annual accounts be signed by a member of the board oversight committee is removed and they are to be signed by the manager of the credit union and member of the board of directors acting on behalf of the board (commences 8 April 2024). Section 6 of Credit Union Act 1997 ("1997 Act") is amended in relation to common bond provisions. It now provides that where a credit union has no website, the credit union must include in its annual accounts a description of the common bond or where the common bond is or includes “residing or being employed in a particular locality “a map on which the locality concerned is marked (commences 8 April 2024). Some changes are made to allow for electronic delivery of information including a provision permitting electronic delivery of notice of general meetings to the auditor and a new provision 188A has been added allowing distribution, subject to the conditions in the new section, of information including annual accounts by electronic means (both commence 22 February 2024). Board of directors Changes are made in relation to the board of directors of a credit union including one whereby a credit union manager can be appointed to the board of directors (new section 63A added to 1997 Act and commences 8 April 2024). Environmental social and governance policy has now been included as a policy for the board to approve, review and update at least every 3 years. This is by virtue of an amendment to section 55 of the 1997 Act where the board has obligations to approve review and update plans policies and procedures. These obligations were annual but with the commencement of the 2023 Act the obligation will be every 3 years (no commencement date yet). There will be a requirement for the credit union to consider gender in the identification of prospective candidates for appointment to the board of directors (commences 8 April 2024). The provision for approval of expenses is changed from requiring approval of a majority of the board of directors to approval by at least 2 directors (excluding a director whose expenses are to be included) (commences 8 April 2024). In section 32 of the 1997 Act which deals with restrictions on withdrawal of shares/deposits, a change is made whereby a decision (about withdrawing savings) does not have to be mandatorily approved by the board (commences 8 April 2024). There are changes to the provisions on approval of loans in section 36 of the 1997 Act. The approval of two thirds of the special committee is deleted and approval of the board of directors is substituted (commences 8 April 2024).   Corporate credit unions The 2023 Act provides for existence of corporate credit unions. New provisions have amended section 6 of the 1997 Act. A new schedule 6 is now included in 1997 Act setting out matters to be provided for in the rules of a corporate credit union including provision for the audit of accounts by one or more auditors appointed by the credit union. This is consistent with the requirements for non-corporate credit unions. By amendment of section 81 of the 1997 Act, the quorum for general meetings of corporate credit unions is two members. There is no commencement date yet for the provisions for corporate credit unions. Other changes Section 35 of the 1997 Act is amended so that a credit union can now agree to participate in a loan to a member of another credit union (the amendments are partially commenced on 8 April 2024). Section 38 of the 1997 Act is amended so that on commencement of the provisions of the 2023 Act, the maximum interest rate that may be charged on loans made by a credit union to its members will be set by the Minister (for Finance) (commences 8 April 2024). Under the 2023 Act, the form of the annual compliance statement a credit union has to make to the Central Bank of Ireland (CBI) can be prescribed by CBI (commences 8 April 2024). This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.             

The Digital Services Act 2024 (“DS Irish Act”) was passed into law on 11 February 2024 and came into force from 17 February 2024.Please click here for a DETE press release giving more details of the DS Irish Act. The EU Regulation (“Regulation”) commonly referred to as the Digital Services Act applies in full in all Member States from 17 February 2024.The Regulation establishes a pioneering regulatory framework to protect EU users of digital services and their fundamental rights online.  While the Regulation has direct legal effect in EU Member States, it was necessary to have national legislation to implement those provisions of the Regulation that provide for the supervision and enforcement of those obligations. The DS Irish Act 2024 fulfils Ireland’s obligations in this regard. The DS Irish Act formally designates and empowers Coimisiún na Meán as the Irish Digital Services Coordinator and the Competition and Consumer Protection Commission as a competent authority for online marketplaces under the Regulation. When the DS Irish Act was published as a bill late last year it was clarified at the time in a press release from DETE that it was a technical bill, drafted to address specific obligations on Member States of the EU to give effect to the supervision and enforcement provisions of the Regulation. The bill did not add to or amend the obligations on online platforms under the Regulation. Those obligations have direct legal effect in all Member States of the EU and do not require any implementing measures in national law. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.