Welcome to this week’s Technical Roundup.
In developments this week, the Financial Reporting Council has published its latest 3-Year Plan, outlining its priorities and objectives for the period 2023-2026; the Financial Conduct Authority in the UK has recently published a useful page on Cryptoasset AML/CTF regime: feedback on good and poor quality applications under money laundering regulations.
Read more on these and other developments that may be of interest to members below.
Audit and Assurance
The FRC Technology & Digital Hub provides an overview of the FRC's work in this area, including how that work fits into the wider FRC strategy, links to publications and information on how you can get involved in their work.
The International Ethics Standards Board for Accountants (IESBA) and International Auditing and Assurance Standards Board (IAASB) welcome the report released today by the International Organization of Securities Commissions (IOSCO) on developing a global assurance framework for sustainability-related corporate reporting. The IOSCO report reflects extensive research and feedback from key stakeholders. The report calls for timely development of ethics and assurance standards for sustainability reporting by the IESBA and the IAASB, respectively.
Accountancy Europe has published a briefing paper which aims to contribute to the debate focusing on the aspect of auditor choice in the PIE market.
Accounting
IAASA has published a paper entitled “IFRS 13 Fair Value Measurement – information requests”. The purpose of this publication is to provide preparers, auditors, and users of financial statements with information to encourage discussion and stimulate debate as to whether or not issuers have adequately considered the requirements of IFRS 13 Fair Value Measurement in preparing periodic financial statements. In this paper, IAASA has published a selection of the IFRS 13 information requests that it has made to issuers during previous financial statement examination cycles.
The European Financial Reporting Advisory Group (EFRAG) has approved the composition of the ESRS Digital Reporting Consultative Forum and Digital Reporting Community. The Consultative Forum will discuss digital reporting aspects of sustainability reporting.
Commissioner Mairead McGuinness has publicly called on EFRAG to prioritise its efforts on capacity building for the implementation of the first set of ESRS over the preparatory work for the draft sector-specific standards.
The March 2023 IASB podcast is now available. This month's edition includes topics on: initial discussions on a new project added to the work plan about Climate-related Risks in the Financial Statements; progress in developing a Request for Information on the Post-implementation Review of IFRS 15 Revenue from Contracts with Customers.
The UK Endorsement Board (UKEB) has published its 2023/24 regulatory strategy. This sets out year two of the UKEB’s three year strategy. The UKEB have noted that their focus for the forthcoming year will be “to maintain the momentum of the past year’s achievements in influencing the development of high-quality international accounting standards that promote the UK public good by ensuring transparency and comparability of financial information thereby underpinning confidence in the UK’s capital markets”.
The Financial Reporting Council (FRC) has published its latest 3-Year Plan, outlining its priorities and objectives for the period 2023-2026. It gives detailed breakdown of intended expenditure for 2023-24 and a summary of the expected trajectory of overall costs and headcount for the following two years.
Anti-Money laundering/Sanctions
The Irish Minister for Finance announced this week that Ireland will declare its interest in hosting the new EU Anti-Money Laundering Authority (“AMLA”). According to the latest information, Ireland joins nine other EU Member States which have already declared an interest in hosting AMLA – Austria, Belgium, France, Germany, Italy, Latvia, Lithuania, Luxembourg and Spain. A final decision on location is expected later this year. The AMLA will be a significant EU institution, tasked with supervision – either directly or jointly with national supervisors – of entities in the financial services sector in the first instance, but eventually also in the non-financial sector. The supervision will be in respect of the entities’ compliance with anti-money laundering and countering financing of terrorism rules and standards (AMLCFT). You can read more from the Minister’s press announcement here.
In light of the rapid advance in Large Language Models (LLMs) such as ChatGPT, Europol’s Innovation Lab recently organised a number of workshops with subject matter experts from across the organisation to explore how criminals can abuse LLMs, as well as how it may assist investigators in their daily work. It produced the Tech Watch Flash report which readers may find interesting. The report analyses the findings of the sessions and includes key information for law enforcement as they continue to scan for new and emerging technologies that affect their work. It outlines the safety features in ChatGPT but adds that the safeguards, however, can be circumvented fairly easily. It also outlines how it can be used for criminal purposes in fraud, impersonation, and social engineering and cybercrime.
We reported a few weeks ago on the UK Government’s economic crime levy (ECL) to fund the fight against economic crime and that the Financial Conduct Authority has recently announced that it will collect Treasury’s economic crime levy (Anti-Money Laundering) from July 2023. An allocation of £300 million between 2023/24-2025/26 generated from the ECL was confirmed in the House of Lords on 27 March 2023. The funding will be allocated for services such as state of the art technology to analyse and share data on threats, hire of new investigators and training of existing ones, new specialist intelligence teams, officers and new financial investigators to analyse suspicious activity reports and a dedicated team to reform the AML supervisory regime. Also, £20 million will be invested in Companies House and the Insolvency Service to fund the creation of two new intelligence teams and £600,000 to deploy UK experts overseas to raise the global standards on beneficial ownership.
The UK Government recently published its Economic crime plan 2023 to 2026.It is stated to set out what the public and private sectors should do to continue to transform the UK’s response to economic crime. It focuses on achieving tangible outcomes and commits to reducing money laundering and recovering more criminal assets, combatting kleptocracy and driving down sanctions evasion and cutting fraud. You can read the Economic Crime Plan here.
Central Bank of Ireland (CBI)
The Central Bank of Ireland recently published its Service Standards Performance Report for H2 2022. CBI says this report sets out its performance against agreed service standards in respect of authorisation of funds and financial service providers and processing of fitness and probity applications. You can see their useful infographic here and read the report in full here.
Also this week the CBI published its ninth edition of Financial Conditions of Credit Unions, 2022. You can read the press release here and the report here. The report provides an update on the financial performance and position of credit unions for the financial year ended 30 September 2022. It also provides sectoral data and commentary and aims to inform credit union boards in carrying out their strategic analysis and decision-making. Remarks by Elaine Byrne, Registrar of Credit Unions, to the CUMA 2023 Spring Conference including remarks on the report, can be read here.
Other Areas of Interest
The Financial Conduct Authority (FCA) in the UK has recently published a useful page on Cryptoasset AML / CTF regime: feedback on good and poor quality applications under money laundering regulations. It suggests that applicants should read this feedback to help prepare an application for registration.
Ian Drennan, the Chief Executive Officer of the Corporate Enforcement Authority (CEA), has recently said that once the CRO’s strike-off programme resumes, the CEA’s programme of seeking the disqualification of company directors who have allowed companies owing debts to be struck off will, similarly, resume. Disqualification prohibits a person from acting as a company director or secretary, and from acting in the management of a company. Breach of a disqualification is a criminal offence, and the CEA prosecutes people who do that. So, he says, it’s better not to allow a company to be struck off in the first place.
In Companies Office latest news: although we do not yet have sight of the statutory instrument bringing section 35 of the Companies (Corporate Enforcement Authority) Act 2021 into force, the Companies Office latest news states that from 23 April 2023, when filing Forms A1, B1, B10 and B69, company directors will be required to provide their PPS numbers. The Companies Office invites readers to visit PPSN - FAQ (cro.ie) for more information on this topic. It also includes some information on what to do when a director does not have an Irish PPSN.
For further technical information and updates please visit the Technical Hub on the Institute website.