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April

Notes from second day of IASB-FASB joint meeting

29 Apr 2006

The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting. .

The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting.

Update on the use of IFRSs in Sri Lanka

29 Apr 2006

The South Asian Federation of Accountants sponsored the First South Asian Accounting Summit on 18-19 April 2006 in Karachi, Pakistan.

Representatives of the Institute of Chartered Accountants of Sri Lanka (ICASL) presented an update on the adoption of IFRSs in Sri Lanka. Sri Lanka has adopted many of the IASs/IFRSs and has kept most of them current including the IASB improvements. Our Sri Lanka Page has a table listing the status of adoption of each IAS and IFRS in Sri Lanka. A summary of the differences is as follows:
  • Sri Lanka has not yet adopted IAS 29, IAS 32, IAS 39, or IAS 41.
  • Nor has Sri Lanka adopted IFRS 1, IFRS 2, IFRS 4, IFRS 6, or IFRS 7.
  • The Sri Lankan adopted versions of IAS 1, IAS 19, and IAS 38 do not reflect the latest IASB versions.
  • Sri Lanka has retained its version of IAS 25 Accounting for Investments, which was replaced by IAS 39.
  • Sri Lanka has issued standards on Plantations and on Revenue Recognition and Disclosures in the Financial Statements of Finance Companies, which have no IFRS equivalent.
Sri Lanka has a separate Sri Lankan Accounting Standard for Smaller Enterprises (SLASSE).

Notes from day 1 of IASB-FASB joint meeting

28 Apr 2006

The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting. .

The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting.

Two publications from the PCAOB

28 Apr 2006

The United States Public Company Accounting Oversight Board (PCAOB) has issued the following two publications: (PDF 39k).

This overview provides guidance on applying AS 4. Section 404 of the Sarbanes-Oxley Act of 2002 requires public companies to report annually on the effectiveness of the company's internal controls. The company's independent auditor must report on that assessment. AS No. 4 describes the steps to be used by auditors when a company voluntarily engages them to report on whether a material weakness, previously identified in the annual Section 404 report, no longer exists.
  • (PDF 64k). This document provides the PCAOB staff's opinions on issues related to the implementation of the PCAOB funding rules. There are 232 questions and answers.
  • Nominees sought for EFRAG TEG

    27 Apr 2006

    The Supervisory Board of the European Financial Reporting Advisory Group has invited nominations for appointment to EFRAGs Technical Expert Group.

    The appointment would be to replace one member whose term expires 14 July 2006. Nominations are sought by 1 June 2006.

    Click for Announcement (PDF 29k).

     

    Deadline – World Congress of Accounting Educators papers

    27 Apr 2006

    The deadline for paper submissions for the 10th World Congress of Accounting Educators (WCAE) is 30 April 2006. WCAE 2006 will be held at Istanbul Convention and Exhibition Center from 9 to 11 November 2006, immediately before the World Congress of Accountants, which is 13-16 November 2006 in Istanbul.

    EC cites Luxembourg non-compliance with IAS Regulation

    27 Apr 2006

    The European Commission has brought infringement actions against 19 Member States for failure to implement in national law one or more of eight different Internal Market Directives.

    Among those actions, the Commission has decided to refer Luxembourg to the European Court of Justice over its "non-implementation of Directive 2003/51/EC on accounting rules". The (PDF 108k) said:

    Directive 2003/51/EC amends Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings. These Directives define which types of companies have to produce accounts, establish which format should be used for the profit and loss account and the balance sheet and lay down which valuation principles should be applied. The Directives also impose disclosure requirements.

    The IAS Regulation, adopted in June 2002, requires all EU companies listed on a regulated market - or those with listed debt instruments - to use IAS from 2005 onwards and allows Member States to extend this requirement to all companies. Where IAS are not applied, the 4th and 7th Company Law Directives (78/660/EEC and 83/349/EEC), also known as the Accounting Directives, will continue be the basis of EU accounting requirements and may therefore remain applicable to up to five million companies in Europe. They needed to be modernised.

    Directive 2003/51/EC brought EU accounting requirements into line with modern accounting theory and practice. It allows Member States which do not apply IAS to all companies to move towards similar, high-quality financial reporting. In doing so, all inconsistencies with International Accounting Standards (IAS) have been eliminated.

    Notes from third day of the IASB April 2006 meeting

    27 Apr 2006

    The International Accounting Standards Board held its April 2006 Board meeting at its offices in London on Monday 24 April 2006 (afternoon only), Tuesday 25 April 2006 (afternoon only), and Wednesday 26 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

    The IASB will also meet with the US Financial Accounting Standards Board at the Crowne Plaza St. James Hotel in London on Thursday and Friday 27 and 28 April 2006.

    ARC recommends deferral of convergence decision

    27 Apr 2006

    At its meeting on 24 April 2006, the European Commission's Accounting Regulatory Committee (ARC) recommended that the Commission defer a decision on whether Canadian, Japanese, and/or US GAAP are equivalent to IFRSs for the purpose of financial statements prepared by non-EU companies listed on EU regulated securities markets.

    This would mean that non-EU issuers using one of those three countries' GAAPs may continue to use that GAAP, without having to restate to IFRSs, in prospectuses filed through 31 December 2008. However, from 1 January 2007, non-EU issuers using a national GAAP other than Canadian, Japanese, or US GAAP will be required to restate their financial statements using IFRSs – unless their national GAAP is equivalent to IFRSs. A national GAAP from a jurisdiction other than one of those three will be deemed equivalent to IFRSs only if the notes to financial statements drawn up in accordance with those national standards contain an explicit and unreserved statement that they comply with International Financial Reporting Standards. The foregoing recommendations must be approved by the European Commission. Click for:

    New Auditing Directive adopted in the EU

    27 Apr 2006

    On 25 April 2006, the Council of the European Union adopted a new directive on the audit of company accounts.

    The directive broadens the scope of application of existing EU legislation (directive 84/253/EEC) by specifying the duties of statutory auditors, their independence, and ethics. It introduces requirements for external quality assurance and public oversight of the auditing profession. The new law also amends directives 78/660/EEC and 83/349/EEC on accounting. The directive's main provisions are as follows. Click for (PDF 123k):

    • Statutory auditor and audit firm. Clear definition of 'audit firm'. Many of the new provisions deal specifically with audit firms.
    • Public reports of audit firms. Firms that audit public interest entities must provide a detailed public report that gives an insight into the audit firm and the network to which it belongs, including information about quality assurance reviews, policies on continuing education, and a fee break-down.
    • Independent audit committees. Required. They must monitor the financial reporting process and the statutory audit.
    • Registration of auditors and audit firms. Member states must ensure that each statutory auditor and audit firm is identified in an electronic public register and that the registration information is kept updated. For audit firms, the register must show size of the firm and owners and members of the management of the audit firm.
    • Independence. Clearly defined. Auditor/firm can not be involved in any way in decision-making of the audited entity.
    • Quality assurance and auditing standards. All statutory auditors and audit firms are subject to a system of quality assurance and subject to public oversight.
    • Audit standards. Statutory audits must be carried out in accordance with international standards on auditing.
    • Investigations and sanctions. Member states must organise effective systems of investigation and sanctions, which may be civil, administrative, or criminal.
    • Competent authorities. Member states must designate competent authorities responsible for approval, registration, quality assurance, inspection, and discipline for the purposes stipulated by the directive. They must cooperate with each other.
    • Public oversight. Member states must handle this with integrity and independence.
    • Appointment, dismissal, and communication. Various principles established, including one whereby the statutory auditor or audit firm can only be dismissed if there is a significant reason why the statutory auditor cannot finalise the audit. The reasons for dismissal or resignation must be disclosed.
    • Registration of non-EU audit firms. Auditors and/or audit firms from non-EU countries that issue audit reports in relation to securities traded in the EU must be registered in the EU and be subject to member state systems of oversight, quality assurance, and investigations and sanctions. Only auditors or audit firms that meet quality criteria equivalent to the directive can be registered. The directive allows for exemption from registration, oversight, quality assurance, and investigations and sanctions only if audit firms from non-EU countries are subject to equivalent systems of registration and oversight.
    • Fees. Audited companies must disclose total fees paid to the statutory auditor or audit firm, broken down by fees for audit services, other assurance services, tax services and other non-audit services.
    • Local adoption. Member states are required to adopt provisions to comply with the new directive within two years of its entry into force. The directive comes into force 20 days after its publication in the Official Journal of the EU.

    Correction list for hyphenation

    These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.