Welcome to this week’s Technical Roundup.
In developments this week, the Financial Reporting Council (FRC) has issued a consultation on publishing audit quality indicators (AQIs) for the largest UK audit firms, the FRC has issued an updated edition of the Guidance on the Strategic Report to incorporate the new climate-related financial disclosures and MEPs and EU governments struck a provisional agreement on new reporting rules for large companies. The Corporate Sustainability Reporting Directive (CSRD) will make businesses more accountable by obliging them to disclose their impact on people and the planet.
Read more on these and other developments that may be of interest to members below.
Financial Reporting
The deadline for commenting on EFRAG’s discussion paper ‘Better Information on Intangibles – Which is the best way to go?’ is approaching (30 June 2022). The Discussion Paper explores various approaches to improve information on intangibles in financial reports.
IFRIC, the IFRS Interpretations Committee, has issued its June 2022 update.
The IASB has published a Project Report Feedback Statement concluding its Post-Implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities.
The FRC has issued an updated edition of the Guidance on the Strategic Report to incorporate the new climate-related financial disclosures, following changes in legislation made earlier this year. In addition, a number of other amendments were also made to maintain alignment with legislation. For entities within their scope, the new climate-related financial disclosures are effective for financial years beginning on or after 6 April 2022.
The FRC has published a consultation on proposed changes to Technical Actuarial Standard 100 which would require actuaries to include climate change risks in the course of their work.
The UK Endorsement Board is holding a virtual outreach event on the International Sustainability Standards Board’s Exposure drafts. The event will take place on 30 June 2022.
Auditing
The Financial Reporting Council (FRC) has issued a consultation on publishing audit quality indicators (AQIs) for the largest UK audit firms, which would provide users of audited information with greater detail on audit firms’ efforts to deliver high quality audit. The FRC welcome the views of all stakeholders – including users of audit services, investors, audit firms, and others with an interest in this topic by 18 August. A link to the consultation is available here.
The Financial Reporting Council (FRC) has published comprehensive professional judgement guidance for auditors to improve how they exercise professional judgement. Professional judgement is key to high quality audit, however the FRC regularly identifies poor professional judgement as one of the most significant issues affecting audit quality. The new guidance includes a framework for making professional judgements and a series of illustrative examples.
Insolvency
The UK government recently published its interim report on the permanent measures in the Corporate Insolvency and Governance Act 2020. Those measures are restructuring plans, the stand-alone moratorium, and restrictions on contractual termination (ipso facto) clauses. As part of the review, the University of Wolverhampton was commissioned to conduct independent research. The report concludes that the permanent measures have been broadly welcomed by stakeholders and are seen as satisfying their policy objectives. It also includes suggestions as to how the measures could work even better.Details of the report can be found by following this link .
Sanctions and Anti-Money Laundering
The Irish Central Bank Director of Enforcement & Anti Money Laundering has this week contacted business groups and professional representative bodies including Chartered Accountants Ireland regarding financial sanctions obligations. You can read details of the press release here. The Central Bank has asked for a letter they have written on sanctions to be circulated to members. The letter advises recipients that the Central Bank is the competent authority for the administration and enforcement of financial sanctions and that the adoption of sanctions places legally binding obligations on all individuals and entities. You can read our news item and the full contents of the letter here.
PWC has recently published its Global Economic Crime Survey 2022: UK findings. Almost two in three respondents reported a fraud in the last 24 months. The survey deals with what types of fraud are occurring, who is perpetrating the crimes and how are they being detected. It identifies five key trends in respect of both fraud frameworks and specific risks. They are fraud risk and maturity, data and technology in risk management and detection, supply chain risk and resilience, ESG risk and cybercrime.You can go to their webpage and follow the registration procedure for a copy of the report.
Other areas of interest
The EU Corporate Sustainability Reporting Directive
New social and environmental reporting rules for large companies were agreed this week by the European Council and European Parliament. It is an ambitious deal on compulsory reporting on environment, social affairs and governance. The Corporate Sustainability Reporting Directive (CSRD) will make businesses more accountable by obliging them to disclose their impact on people and the planet. This aims to end greenwashing and lay the groundwork for sustainability reporting standards at global level. New social and environmental reporting rules for large companies | News | European Parliament (europa.eu). Sustainability will become a new pillar of businesses’ performance, moving away from focus on short-term profits and the CSRD EU set to become front-runner in setting global sustainability reporting standards
The UK House of Commons Treasury Committee recently issued a report on the future of financial services regulation. It includes consideration of the new regulatory framework (post Brexit),regulatory objectives and priorities and payment innovation including a focus on cryptoassets. You can read a copy of the report here.
CLS Chartered Secretaries has published an article which maybe of interest to members on whether a company limited by guarantee or a dormant Company must make a filing with the RBO. You can read more details and their conclusion here.
The UK government, HM Treasury recently published the outcome of a consultation launched in July 2021. The consultation outlined how the government intended to amend the UK’s Money Laundering Regulations (the MLRs) to make updates to ensure that the UK continues to meet international standards, whilst also strengthening and ensuring clarity on how the UK’s anti-money laundering and counter-terrorist financing (AML/CTF) regime operates. The recently published document summarises the responses to the consultation and sets out the government’s final approach to the relevant Statutory Instrument (SI) and you can read it here.
Ministers in the Dept. of Enterprise Trade and Employment recently welcomed the publication from the Expert Group on Future Skills Needs (EGFSN) on the skills needed for Ireland to fully benefit from the opportunities presented by Artificial Intelligence.The report is entitled AI Skills: A Preliminary Assessment of the Skills Needed for the Deployment, Management and Regulation of Artificial Intelligence.You can read the press release here and a copy of the report here.
The Irish government recently announced a new €85 million fund, the Digital Transition Fund, to help businesses, at any stage or in any sector to go digital. The fund will be administered by Enterprise Ireland.Funding of €85 million has been allocated during the period to 2026 as part of Ireland’s National Recovery and Resilience Plan. €10 million will be available in 2022. A new online website is being developed and you can read more detail on the fund here.
Any one member arrangements (OMA) set up on or after 22 April 2021 must meet the full requirements of the Pensions Act, 1990, as amended, including the new requirements of the IORP II Directive, by 1 July 2022.The Pensions Authority has recently issued a further reminder to trustees about this details of which you can read here.
For further technical information and updates please visit the Technical Hub on the Institute website.
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