This page highlights current news items or the latest changes to our site.
FRC issues amendments to FRS 101 and FRS 102
Wednesday, 23rd July 2014: The UK Financial Reporting Council (FRC) has today issued amendments to new UK and Irish GAAP to improve the accounting for certain financial transactions, which will also improve ease of use of the Standards and reduce the cost of compliance. The amendments to FRS 102:
- (a) relate to financial instruments:
updating the requirements on hedge accounting, making hedge accounting more readily available to entities where it is consistent with their risk management processes;
relaxing the conditions for regarding financial instruments as ‘basic’, with the effect that more financial instruments will be measured by reference to cost rather than fair value;
- (b) make transition to FRS 102 less costly;
- (c) are effective from the same date as FRS 102, 1
Pursuant to its statutory mandate to co-operate in the development of accounting standards, IAASA has observer status at meetings of the Accounting Council of the FRC.
The amendments may be accessed via the FRC website using this link.
Comment letter from European audit regulators relating to IAASB’s exposure draft
Tuesday, 22nd July, 2014: The European Audit Inspection Group (‘EAIG’) has submitted a joint comment letter to the International Auditing and Assurance Standards Board (‘IAASB’) regarding the re-exposure of the proposed International Standard on Auditing (‘ISA’) 720 (Revised), The Auditor’s Responsibilities Relating to Other Information. The comment letter, which may be accessed here, has been signed by 21 EAIG members, including IAASA.
The EAIG’s primary purpose is to create awareness of significant issues and promote cooperation and consistency amongst European audit regulators on inspections. The group shares inspection practices and findings and facilitates discussions on topics related to audit inspections with third parties, such as the standard setters and the audit profession.
ESMA publishes accounting enforcement guidelines
Thursday, 10th July, 2014: The European Securities and Markets Authority (ESMA) has published its final Guidelines on the enforcement of financial information published by listed entities in the European Union (EU). The aim of the guidelines is to strengthen and promote greater supervisory convergence in existing enforcement practices amongst EU accounting enforcers.
The Guidelines set out the principles to be followed by accounting enforcers throughout the enforcement process by defining the objectives, the characteristics of the enforcers, and some common elements in the enforcement process. They will strengthen the development of coordinated views on accounting matters prior to national enforcement actions, the identification of common enforcement priorities and common responses to the accounting standard setter to ensure consistent application of the financial reporting framework. The guidelines will apply to all national competent authorities and any other bodies in the EU undertaking enforcement responsibilities under the Transparency Directive.
A copy of the associated press release can be accessed here.
IAASA publishes its eighth Annual Report
Tuesday, 1st July, 2014: IAASA’s eighth Annual Report has been laid before the Houses of the Oireachtas, and is now available for download here.
The Report provides a detailed analysis of the Authority’s activities during 2013 in its principal functional areas, together with reviews by the Chairperson and Chief Executive respectively of the challenges faced during the year, the achievements, and a vision for future years. The associated press release can be accessed here.
Statistical data for the year has been published separately in IAASA’s 2013 Profile of the Profession.
Opportunity for professional role in IAASA
Monday, 30th June, 2014: IAASA wishes to recruit an experienced accounting professional for its Financial Reporting Supervision Unit. The advertisement for the post as it appeared in national media can be viewed here. Further details of the post on offer can be downloaded here.
The closing date for applications under this competition is 5.00pm on Friday, 18 July 2014, and late applications will not be considered.
Applicant should note that those shortlisted with be invited for interview on Tuesday, 29 July 2014.
European audit regulators commence dialogue on audit quality issues with largest European audit networks
Thursday, 26th June, 2014: Independent audit regulators from Europe, including IAASA, have entered into a series of structured meetings with the largest European networks of audit firms. The meetings shall contribute to a better understanding of network structures and procedures and the networks’ approaches to maintain and improve the quality of their audits of financial statements or group accounts of Public Interest Entities (PIEs).
The meetings are organised within the framework of the European Audit Inspection Group (EAIG), which was established in 2011. The EAIG provides a pan-European platform for cooperation of audit regulators. IAASA is a member of the EAIG.
At the EAIG’s meeting in Copenhagen on 24 and 25 June 2014, hosted by the Danish Business Authority, the regulators met with representatives of EY Europe LLP. The meeting was the first of a series of meetings with other networks (BDO, Deloitte, Grant Thornton, KPMG and PwC) structured on a pan-European basis that builds on the experience of EAIG members throughout Europe and their previous interaction with the networks. Working groups of the EAIG will maintain an ongoing contact with the networks between these meetings.
The meeting in Copenhagen was the 12th meeting of the EAIG. Other topics discussed by the members included issues such as the EAIG’s development of a Common Audit Inspection Methodology (CAIM) and changes in the EU regulatory framework relevant for inspections of PIE audit firms.
In December 2013 the EAIG launched a database of inspection findings that is used by the regulators to identify common issues in relation to particular networks or the application of particular standards by audit firms in practice. This will not only contribute to the meetings with the networks, but also to the dialogue with the audit profession at large and with standard setters such as the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA).
Tuesday, 17th June, 2014: The European Securities and Markets Authority (ESMA) has published a report on the application of accounting requirements for business combinations in IFRS financial statements.
The report, based on a review of the annual IFRS financial statements of 56 issuers in the European Union (EU), examines the consistency of how key requirements of IFRS 3 Business Combinations are applied and provides recommendations to issuers, and suggestions to the IASB, on areas where the usefulness and quality of the financial information could be improved.
The results of the review show that some good business combination disclosures were provided; however, ESMA identified certain areas where improvements are warranted in order to enhance the usefulness of the information.
ESMA urges issuers to provide disclosures tailored to the specific circumstances of transactions. In particular, ESMA believes issuers should further improve the quality of the information by:
(i) providing relevant information about the factors determining the amount of goodwill or reasons for bargain purchases;
(ii) providing more granular disclosures on the assets and liabilities recognised, where relevant;
(iii) applying consistent assumptions at the initial recognition and subsequent measurement of assets and liabilities; and
(iv) improving the information provided on the valuation techniques and assumptions used when measuring assets and liabilities at fair value.
IAASA is an active participant in the ESMA-sponsored European Enforcers’ Co-ordination Sessions (EECS). The objective of EECS is to coordinate European enforcement activities in order to increase convergence amongst European national accounting enforcers and contribute to fostering investor confidence.
The ESMA Report can be downloaded from the following link:
• Review on the application of accounting requirements for business combinations in IFRS financial statements