Roundup 4 November 2022
Welcome to this week’s Technical Roundup.
In developments this week, the Financial Reporting Council has published its inspection findings into the quality of major local body audits in England, which includes large health and local government bodies; the International Federation of Accountants has issued a call to G20 leaders to cooperate to solve long-term pressing issues including sustainability, public financial management and corruption, and the need to work together for collective prosperity.
Read more on these and other developments that may be of interest to members below.
Auditing
IAASA has published its October 2022 edition of Standards Newsletter which is available here.
IFAC has released the first instalment in a three-part series to help small and medium sized practices implement the IAASB’s new Quality Management Standards.
The Financial Reporting Council (FRC) has published its inspection findings into the quality of major local body audits in England, which includes large health and local government bodies.
Financial Reporting
The International Accounting Standards Board (IASB) has issued amendments to IAS 1- Presentation of Financial Statements. These amendments will provide improved disclosures relating to long term debts with covenants and provide clarity on the treatment of such debt. The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with early adoption permitted.
The IFRS Foundation has issued its October 2022 news summary.
The IFRS Interpretations Committee has published Volume 7 of its Compilation of Agenda Decisions. This brings together agenda decisions published from May 2022 to October 2022.
IFAC has issued a call to G20 leaders to cooperate to solve long-term pressing issues including sustainability, public financial management and corruption, and the need to work together for collective prosperity.
The FRC has published its annual review of corporate reporting 2021/2022. As part of the 2021/2022 review cycle, the FRC carried out 252 reviews (comprising full scope reviews and thematic reviews). The FRC has highlighted the need for high-quality disclosures from companies during periods of economic uncertainty.
The FRC have also published Review of Corporate Governance Reporting. This report looks at how 100 FTSE 350 and Small Cap companies have reported on their governance in line with the principles and provisions of the UK Corporate Governance Code.
The European Securities and Markets Authority (ESMA) has published its European common enforcement priorities for 2022 annual financial reports document. This sets out the areas that ESMA and national enforcers will pay particular attention to when monitoring and assessing the application of relevant reporting requirements.
Insolvency
The Institute is hosting a webinar on SCARP – what we know so far on Tuesday, 15 November 2022 at 10am. Des Gibney of McStay Luby and Hilary Larkin of Mazars along with Laura-Michelle Moore from Chartered Accountants Ireland will discuss the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it. We will explore some practical issues including how SCARP is working in practice, dealing with creditors and what your balance sheet may look like before entering the process versus afterwards. This is a free event and open to all to attend.
The CCAB-I Insolvency Committee responded to the Corporate Enforcement Authority’s public consultation on the draft Information Note on Early Warning Tools and Restructuring Frameworks. The response is available to read here.
Sustainability
The International Sustainability Standards Board (ISSB) unanimously confirmed this week that companies will be required to use climate-related scenario analysis to inform resilience analysis. They voted to confirm that companies are required to use climate-related scenario analysis to report on climate resilience and to identify climate-related risks and opportunities to support their disclosures.
The ISSB also agreed to provide application support to preparers including making use of materials developed by the Task Force for Climate-Related Financial Disclosures (TCFD) to provide guidance to preparers on how to undertake scenario analysis. This decision responds to questions from stakeholders about what is meant by the term 'climate-related scenario analysis'.
Please see here for further details.
Anti-money laundering
The European Commission has published a report on the assessment of the risk of money laundering and terrorist financing (“ML/TF”) affecting the internal market and relating to cross-border activities The report analyses the ML/TF risks for the EU internal market based on categories of products and services and proposes actions that can be taken to address this.
Other news
Accountancy Europe has welcomed the proposed EU regulation to ban products made with forced human labour. This represents a step in the ongoing fight against modern day slavery. Accountancy Europe has also set out some key messages to policymakers in their endeavours to address this issue. It also provides details about the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 which will come into effect on 1 December 2022.
The Financial Reporting Council has published its Annual Review of Corporate Governance Reporting which found an improvement in the quality of reporting against the UK Corporate Governance Code.
The Department of Enterprise, Trade and Employment has issued its latest Enterprise Newsletter which includes details of the new €200M Ukraine Enterprise Crisis Scheme and was set up to assist viable but vulnerable firms of all sizes in the manufacturing and internationally traded services sectors. The newsletter also gives details about the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 will come into effect on 1 December 2022 which, amongst other matters, will give employees legal rights over the payment of tips.
The Wheel are hosting Charity Trustees week from 14th to 18th November. This includes some free events which charity trustees may be interested in.
Opening remarks were made by Governor Gabriel Makhlouf at the Financial System Conference which is designed to bring together diverse perspectives from the Central Bank of Ireland's wide range of stakeholders – including industry leaders, consumer representatives, and policymakers from Ireland and across the EU – to discuss and debate the forces shaping the financial system.
The UK government webpage giving information on the changes being introduced by the Charities Act 2022 has been updated as a result of Charities Act 2022 provisions that have come into effect on 31 October 2022.
The NI Charity Commission have published a blog which outlines recent changes to the online application for charity registration (opens on YouTube): https://youtu.be/fziaypsqPcg
For further technical information and updates please visit the Technical Hub on the Institute website.
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