News

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SEC Chief Accountant releases statement on Audit Quality

Feb 05, 2024

On February 05, 2024, the Securities and Exchange Commission’s (SEC) Chief Accountant Paul Munter released a statement on how auditors and audit committees must focus on audit quality to protect investors.

Mr. Munter expressed concerns over the Public Company Accounting Oversight Board's (PCAOB) recent inspection findings. He highlighted a troubling increase in deficiencies, particularly regarding insufficient audit evidence, rising from 29% in 2020 to 40% in 2021 inspections. This trend, Mr. Munter emphasized, necessitates renewed commitment from the entire auditing profession to ensure investor protection.

He reminded auditors of their fundamental responsibility to investors, requiring objective judgment, rigorous skepticism, and prioritizing investor interests throughout the audit process. While acknowledging the dedication of most auditors, Mr. Munter stressed the need for renewed focus on delivering high-quality audits in line with the profession's mission.

Access the statement on the SEC’s website

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IASB releases webcast introducing the forthcoming IFRS 18

Feb 05, 2024

On February 5, 2024, the International Accounting Standards Board (IASB) released a ten-minute webcast unveiling the new IFRS 18 Presentation and Disclosure in the Financial Statements. This standard, expected in April 2024, will take effect for reporting periods starting January 1st, 2027, onwards.

The new standard responds to investors' demand for better information about companies’ financial performance and will improve how company information is communicated in the financial statements. It will provide investors with enhanced clarity and depth for analyzing company performance, leading to well-informed investment decisions.

Access the webcast on the IFRS Foundation website.

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COSO and NACD issues Request for Proposal to develop Corporate Governance Framework

Jan 31, 2024

On January 31, 2024, the Committee of Sponsoring Organizations of the Treadway Commission (COSO), in collaboration with the National Association of Corporate Directors (NACD), issued a Request for Proposal (RFP) to develop a Corporate Governance Framework (CGF).

This framework would be designed to provide principles-based guidance for organizations of all sizes and types, helping them build effective governance practices. Both COSO and NACD recognize the increasing need for strong governance, as it plays a crucial role in shaping ethical business practices, ensuring stakeholder alignment, and driving long-term sustainability.

The CGF is intended to be used by:

  • public companies seeking to self-assess and enhance governance practices, and by start-up businesses desiring to build up their governance practices and processes;
  • private organizations seeking best practices or as part of readiness activities related to initial public offering efforts; and
  • external auditors, internal auditors, rating agencies, investors, listing agencies and/or regulators finding such a framework useful in assessing governance practices at related entities.

Organizations intending to respond to the RFP must provide a Notice of Intent to Respond by February 20, 2024.

Access the press release on the NACD’s website.

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IASB issues podcast on latest Board developments (January 2024)

Jan 30, 2024

On January 30, 2024, the IASB released a podcast hosted by Executive Technical Director Nili Shah featuring IASB Chair Andreas Barckow and IASB Vice-Chair Linda Mezon-Hutter discussing the deliberations at the January 2024 IASB meeting.

The podcast highlights some of the projects that were discussed during the meeting, including:

  • the post-implementation review of IFRS 15; 
  • power purchase agreements;
  • amendments to IFRS 9 regarding classification and measurement; and
  • proposals for the addendum to the IFRS for SMEs exposure draft.

It also addresses a question from one of the podcast listeners.

The podcast can be accessed here on the IFRS Foundation website

An analysis of changes to the work plan resulting from the IASB discussions can be found here.

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ISSB issues January 2024 podcast

Jan 30, 2024

On January 30, 2024, the IFRS Foundation released a podcast hosted by ISSB Chair Emmanuel Faber and Vice-Chair Sue Lloyd discussing the latest developments from the ISSB.

The podcast looks ahead to the ISSB’s three priorities for 2024:

  • Supporting the implementation of the ISSB Standards;
  • Working with jurisdictions on their adoption roadmaps; and
  • Finalising the ISSB’s two-year work plan.

It also discusses recent progress on technical work, including the discussion at the January 2024 joint IASB-ISSB meeting, for which a dedicated podcast has been released.

Access the press release on the IFRS Foundation website.

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Updated IASB and ISSB work plan — Analysis (January 2024)

Jan 29, 2024

Following the IASB's and ISSB's January 2024 meetings, we have analysed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in December 2023.

Below is an analysis of all changes made to the work plan since our last analysis on December 18, 2023

Standard-setting projects

Maintenance projects

  • test
    • test 2
  • Annual Improvements to IFRS Accounting Standards — Feedback discussions on the exposure draft of the following projects will now begin in February 2024 (previously Q1 2024):
    • Cost Method (Amendments to IAS 7)
    • Derecognition of Lease Liabilities (Amendments to IFRS 9)
    • Determination of a ‘De Facto Agent’ (Amendments to IFRS 10)
    • Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7)
    • Gain or Loss on Derecognition (Amendments to IFRS 7)
    • Hedge Accounting by a First-time Adopter (Amendments to IFRS 1)
    • Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7)
    • Transaction Price (Amendments to IFRS 9)
  • International applicability of the SASB standards— This project has been removed from the work plan since final amendments were published on December 19, 2023
  • Updating the 'Subsidiaries without public accountability: Disclosures' standard — An exposure draft is now expected in Q2 2024 (previously H1 2024)

Research projects

Other projects

The above is a faithful comparison of the IASB and ISSB work plan on December 18, 2023 and January 29, 2024.

For access to the current work plan at any time, please click here.

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Navigating feedback and future steps for CSSA 5000 Sustainability Assurance Standard

Jan 26, 2024

On January 26, 2024, the Auditing and Assurance Standards Board (AASB) announced that it has reviewed the feedback received and is considering necessary adjustments for Canada's adaptation of the international sustainability assurance standard, CSSA 5000.

After reviewing the feedback gathered, AASB found it to be generally consistent with the main themes identified during the international standard's consultation. These include requests for enhanced guidance on relevant ethical requirements and quality management, clarification on the relationship between CSSA 5000 and ISAE 3410, further consideration and guidance on the entity's materiality process, greater detail on materiality, particularly for qualitative disclosures, more guidance on obtaining evidence for estimates and forward-looking information, additional requirements and guidance for group sustainability assurance engagements, and the need for first-time implementation guidance.

Over the next few months, the AASB will be working to ensure Canadian feedback is considered by the International Auditing & Assurance Standards Board (IAASB) as the final standard is developed. The anticipated approval date for the final CSSA 5000 is December 2024.

Access the press release on the AASB’s website.

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IASB and ISSB emphasize connectivity in joint technical meeting

Jan 25, 2024

On January 25, 2024, the IASB and ISSB held their inaugural joint technical meeting in London. The meeting centered around feedback on the ISSB’s priorities for the next two years, focusing on potential projects for integrating financial and sustainability reporting.

The IFRS Foundation issued a special joint podcast episode where IASB Vice-Chair Linda Mezon-Hutter and ISSB Vice-Chair Sue Lloyd shared insights into the discussion.

Key topics included feedback on integration in reporting projects and enhancing connectivity between the two boards. The podcast also discussed the IASB’s management commentary project and the role of the Integrated Reporting Framework.

Access the press release on IFRS Foundation’s website.

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GRI publishes update to its biodiversity standard

Jan 25, 2024

On January 25, 2024, the Global Reporting Initiative (GRI) published ‘GRI 101: Biodiversity 2024’ which replaces ‘GRI 304: Biodiversity 2016’. The updated standard, effective from January 1, 2026, aims to assist entities in disclosing their significant impacts on biodiversity.

The revised GRI biodiversity standard delivers:

  • full transparency throughout the supply chain; 
  • location-specific reporting on impacts; 
  • new disclosures on the direct drivers of biodiversity loss; and 
  • requirements for reporting impacts on society.

It builds on the most important global biodiversity developments, such as the UN Kunming-Montreal Global Biodiversity Framework (GBF), the Science Based Target Network (SBTN) and the Taskforce on Nature-related Financial Disclosures (TNFD).

The GRI cooperated and liaised with the European Financial Reporting Advisory Group (EFRAG), which developed European Sustainability Reporting Standard (ESRS) 4 Biodiversity and ecosystems, and other key organizations in the biodiversity field to support global alignment of the revised standard.

Access the press release on GRI’s website.

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IFAC, AICPA & CIMA study shows advancement in global companies' sustainability reporting

Jan 22, 2024

On January 22, 2024, the International Federation of Accountants (IFAC), along with American Institute of Certified Public Accountants (AICPA) and Chartered Institute of Management Accountants (CIMA) released a report "The State of Play: Sustainability Disclosure and Assurance 2019-2022, Trends and Analysis”, indicating that the largest global companies are enhancing the depth and scope of their sustainability reporting.

This study, an annual benchmark that now includes 2022 data, also found the use of varying sustainability standards and frameworks, continues to make it difficult for investors, lenders, and other stakeholders to find consistent and comparable sustainability information.

Key findings revealed a surge in companies reporting sustainability information, with 98% doing so in 2022 compared to 91% in 2019. However, standalone sustainability reports have declined, indicating a shift towards integrated reporting. While there is an increase in companies seeking assurance on sustainability disclosures, the scope remains limited. Additionally, accounting firms dominate assurance engagements, reflecting growing recognition of their reliability in ensuring sustainability disclosure consistency.

Access the report on IFAC’s website.

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