Welcome to this week’s Technical Roundup.
In developments this week, the CCAB-I Insolvency Committee has recently published Technical Release 01/2024 - Personal Insolvency (Amendment) Act 2021. This TR outlines how the provisions of the Act reflect practical amendments arising from Covid-19 and also the evolving nature of the existing legislation governing personal insolvency. In other news the three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) have launched a second consultation related to the joint guidelines on the system for the exchange of information relevant to fit and proper assessments.
Read more on these and other developments that may be of interest to members below.
Auditing
TR 04 2023 Reporting on covenants
This new guidance, issued in December 2023, provides assistance to firms reporting in connection with financial covenants in loan agreements and other facilities.
Loan agreements often contain a number of covenants with which the borrower is expected to comply. Compliance with such covenants is intended to help assure the lender of the continuing security for the loan; borrowers are expected to provide periodic reports on their compliance, which may include a requirement for the borrower to provide the lender with certain reports prepared by their auditor. This Technical Release gives guidance to professional accountancy firms and practitioners in these situations.
This TR replaces M36 Firms' Reports and Duties to Lenders in Connection with Loans and other Facilities to Clients and Related Covenants. The TR can be accessed on the Institute's Technical Hub.
In December the FRC published an updated overview of competition in the UK's audit market for public interest entities (PIE). The report shows a small increase in market share for challenger audit firms but the Big Four accounting firms continue to dominate, earning 98% of FTSE 350 audit fees in 2022.
In December 2023 the IAASB issued the new International Standard for the Audits of Less Complex Entities. Where it is adopted, or permitted, the standard is effective for audits of financial statements for periods beginning on or after December 15, 2025, (i.e. 2026 calendar year audits) with early adoption being permitted and encouraged. The standard has not yet been adopted for use in Ireland or the UK. The standard can be downloaded from the IAASB website.
Financial Reporting
The International Accounting Standards Board (IASB) has issued its December 2023 update. This includes updates to its various research and standard setting projects and maintenance projects considered at its December meeting. The IASB has also released its December 2023 podcast.
The IFRS Foundation have issued a summary of news and events for December 2023.
The IASB has published its December 2023 IFRS for SMEs Accounting Standard Update. This includes an update on the IASB’s deliberations of the proposals contained in the draft third edition of the IFRS for SMEs standard. The update also includes details of the requirements to be included in the forthcoming IFRS Accounting Standard for SMEs (Subsidiaries without Public Accountability), which is expected to be issued in the first half of 2024.
Following the endorsement of amendments to IAS 1 Presentation of Financial Statements, EFRAG has issued its updated Endorsement Status Report.
The Financial Reporting Council (FRC) has launched a consultation on its plan and budget for 2024-25 which sets out its priorities and resources for next year.
Insolvency
The CCAB-I Insolvency Committee has recently published Technical Release 01/2024 - Personal Insolvency (Amendment) Act 2021. This Technical Release outlines how the provisions of the Personal Insolvency (Amendment) Act, 2021 reflect practical amendments arising from Covid-19 and also the evolving nature of the existing legislation governing personal insolvency. The previous technical guidance document TA/02 2016 Personal Insolvency (Amendment) Act 2015 is still of relevance and guidance to members save for any amendments set out herein.
Sustainability
The International Sustainability Standards Board (ISSB) have issued its December 2023 update and podcast. These releases reflect on the ISSB’s progress in 2023, as well as their highlights in December.
The ISSB has published amendments to the SASB Standards. These are intended to enhance their international applicability.
EFRAG, the European Financial Reporting Advisory Group has issued a call to SMEs for participants to test its forthcoming exposure drafts on voluntary sustainability reporting standards for non-listed SMEs and ESRS for listed SMEs.
EFRAG and the Taskforce on Nature-related Financial Disclosures (TNFD) have announced that they have signed a cooperation agreement and have highlighted their shared commitment to enhance corporate transparency related to biodiversity and ecosystems.
On 22 December 2023, the ESRS Delegated Act and Annexes were published in the EU Official Journal. Details of its journey from Project Taskforce to Delegated Act are summarised on EFRAG’s page.
In order to support the implementation of the European Sustainability Reporting Standards (ESRS), EFRAG has published three draft Implementation Guidance documents. These documents are open for public comment until 2 February 2024. The publications issued cover the following areas;
- Materiality assessment implementation guidance
- Value chain implementation guidance
- Detailed ESRS datapoints implementation guidance
Anti–money laundering
The Professional Standards Dept of Chartered Accountants Ireland has recently published two news items which members should take note of. One news item relates to high-risk behaviours and typologies associated with the Trust and Company Service Provider (TCSP) sector and gives details of an AML alert from the UK National Economic Crime Centre to highlight the high-risk behaviours and typologies associated with the TCSP sector. The other news item highlights the risks associated with verification work which might be undertaken by firms in relation to the UK Register of Overseas Entities. You can read details of the news item and the risks here.
Other news
The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) have launched a second consultation related to the joint Guidelines on the system for the exchange of information relevant to fit and proper assessments.
The Central Bank of Ireland issued its final Quarterly Bulletin of 2023 on 19 December.
The Corporate Enforcement Authority (CEA) issued its first newsletter in December 2023. The December issue can be accessed by the following link https://account.createsend.ie/t/r-7C238FCAE6B22F622540EF23F30FEDED. Readers should note that there is the subscribe button on the CEA website for people to sign up to CEA newsletters for 2024. You can subscribe to the CEA newsletter in 2024 for updates on CEA news and events as well as relevant updates on company law by clicking the following link Subscribe to the CEA Newsletter.
The Pensions Authority has published its engagement audit findings report for 2023. The purpose of this report is to share observations on the key findings identified during the Authority’s engagement and audit activity in 2023.
The Pensions Authority has published information on the supervisory review process (SRP) provided for under the Pensions Act, following the transposition of the IORP II Directive.
The COVID “interim period” which was introduced under the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 introduced measures such as virtual meetings and increasing the threshold for when a company is deemed unable to pay its debts. The interim period has been extended a number of times but most of the measures are gradually being unwound.
At the end of 2023 the Dept. of Enterprise Trade and Employment (DETE) announced that the Minister has further extended the interim period in respect of holding virtual meetings, including AGMs. The provisions have been further extended to 31 December 2024. Click here to read details of the extension in the DETE press release and here for our recent news item.
However, the measure which increased to in excess of €50,000 the amount at which a company is deemed to be unable to pay its debts in the interim period is not renewed. Therefore, beginning 1 January 2024, a company is deemed to be unable to pay its debts under section 570 of the 2014 Act where indebted to a creditor in an amount exceeding €10,000 or indebted to two or more creditors in an amount exceeding €20,000. Click here for our recent news item.
The Competition and Consumer Protection Commission CCPC has published its annual merger report, which includes statistics on the number of mergers and acquisitions notified to and reviewed by it in 2023.
All mergers and acquisitions which reach certain financial thresholds must be notified to the CCPC and it examines whether any notified transaction could result in the substantial lessening of competition in markets for goods and services in the State. Click here for the press release and here to access a copy of the report.
Click here to read more about the National Standards Authority of Ireland five New Year's resolutions that can bolster cyber-resilience in 2024, These are regular cybersecurity health checks, embrace multi-factor authentication, educate and empower employees, secure cloud environments and establish an incident response plan.
The Minister for Finance recently published a progress update on review of funds sector in Ireland. The progress update highlights the main trends, risks, challenges and opportunities facing the funds industry in Ireland out to 2030, as identified in the responses to a consultation conducted in the summer of 2023. Click here for a press release with more details.
For further technical information and updates please visit the Technical Hub on the Institute website.
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