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May

Notes from day one of IASB May 2006 meeting

24 May 2006

The International Accounting Standards Board is holding its May 2006 Board meeting at its offices in London on Tuesday through Friday 23-26 May 2006. You will find all of the preliminary and unofficial Notes Taken by Deloitte Observers here. .

The International Accounting Standards Board is holding its May 2006 Board meeting at its offices in London on Tuesday through Friday 23-26 May 2006. You will find all of the preliminary and unofficial Notes Taken by Deloitte Observers here.

PCAOB proposes rules for reporting by accounting firms

24 May 2006

The US Public Company Accounting Oversight Board has proposed rules for annual and special reporting of information and events by registered public accounting firms.

Nearly 1,700 accounting firms are registered with the PCAOB, of which about 40% are non-US firms. The proposed rules implement Section 102(d) of the Sarbanes-Oxley Act of 2002, which provides that each registered accounting firm must submit an annual report to the Board, and may also be required to report more frequently. The reporting framework proposed by the PCAOB includes two types of reporting obligations:
  • First, the proposal would require each registered firm to provide basic information once a year about the firm and the firm's issuer-related practice over the most recent 12-month period.
  • Second, the proposal identifies certain events that, if they occur with respect to a registered firm, must be reported by the firm within 14 days.
In addition, the PCAOB has proposed rules that, in certain circumstances, would allow a successor firm to succeed to the registration status of a predecessor firm following a merger or other change in the registered firm's legal form. Click to download the (PDF 58k). The full text of the proposed rules may be downloaded from http://www.pcaobus.org/Rules/Rulemaking_Docket.aspx. Comments are due 24 July 2006.

SEC 2005 annual report

23 May 2006

We have posted the (PDF 1,526k).

The report includes sections on (1) Management Discussion and Analysis; (2) Performance; and (3) Financial Statements, including report of independent auditors, management's response to the audit opinion, and the Inspector General's summary of management challenges. A few items of interest:
  • 74 new foreign private issuers registered US$250 million of securities in 2005 (compared to 63 and $146 million in 2004; 50 and $163 million in 2003; and 70 and $147 million in 2002)
  • 'Milestones for international regulatory cooperation' include:
    • Eliminating GAAP reconciliation requirement for foreign issuers
    • Bilateral regulatory dialogues (China, Japan, EC, CESR)
    • IOSCO MOU on Enforcement Cooperation and Information Sharing
    • IOSCO initiatives on cross-border cases and financial fraud
  • The SEC made 438 requests to foreign securities regulators for enforcement assistance and received 315 requests for assistance from foreign regulators
  • 51% of the approximately 15,000 registered companies had their disclosures reviewed by the SEC (compared to 23% in 2003 and 22% in 2004)
  • 37% of the approximately 35,000 registered investment companies (including mutual funds) had their disclosures reviewed by the SEC (compared to 10% in 2003 and 57% in 2004)
  • 29% of SEC enforcement cases relate to financial reporting and disclosures
  • 99% of enforcement cases were successfully resolved in favour of the SEC
  • Number of on-line searches of SEC EDGAR database: 2002 96.9 million; 2003 141.5 million; 2004 288.9 million; 2005 379.0 million

EC regulation adopting amendments to IAS 21, IFRIC 7

23 May 2006

We have posted the European Commission's (PDF 55k) adopting, for use in Europe, amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation and IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies. .

IFAC's 2005 annual report

23 May 2006

The International Federation of Accountants has published its Annual Report for 2005 (PDF 2,046k).

Among IFAC's most notable accomplishments for 2005 are:
  • Strengthening of its standard-setting processes including establishment of the Public Interest Oversight Board (PIOB) and establishment and expansion of Consultative Advisory Groups for IFAC standard-setting boards
  • Development of good practice guidance to help developing nations build accounting capacity.
  • Release of an updated international Code of Ethics for Professional Accountants.
  • Progress on developing a global electronic knowledge resource for professional accountants in business
  • Successful implementation of Part 1 of the IFAC Member Body Compliance Program, which provides comprehensive information about the regulatory and standard-setting frameworks in countries around the world

IASB May 2006 meeting agenda – addition

23 May 2006

The agenda for the IASB's May 2006 Board meeting (which we had reported in our News Story of 12 May 2006) has been expanded to include discussion of Accounting Standards for Small and Medium-sized Entities on Thursday morning 25 May 2006. The SME discussion will continue on Friday morning 26 May 2006. .

The agenda for the IASB's May 2006 Board meeting (which we had reported in our News Story of 12 May 2006) has been expanded to include discussion of Accounting Standards for Small and Medium-sized Entities on Thursday morning 25 May 2006. The SME discussion will continue on Friday morning 26 May 2006.

Philip Laskawy is interim IASC Foundation chairman

22 May 2006

The Trustees of the IASC Foundation have appointed Philip Laskawy, a retired Chairman of Ernst & Young International, as Chairman of the Trustees for the interim period.

He succeeds Tommaso Padoa-Schioppa, who has stepped down due to his appointment as Minister of Finance of Italy in the new government of Prime Minister Romano Prodi. Mr Laskawy, a long-serving Trustee, is in the last year of his second and final term. The IASCF Nominating Committee has begun the process of selecting a successor to Mr. Padoa-Schioppa. The Nominating Committee will consult the Trustee Appointments Advisory Group, a body comprising leaders of regional and international organisations, in developing recommendations to present to the full Trustees. Click for IASCF Press Release (PDF 81k).

SEC plans for improved SOx 404 implementation

22 May 2006

The US Securities and Exchange Commission has announced a series of actions it intends to take to improve the implementation of the Section 404 internal control requirements of the Sarbanes-Oxley Act of 2002. Those actions include: Guidance for companies. The guidance would assist management in its performance of a top-down, risk-based assessment of internal control over financial reporting.

To ensure that this guidance is of help to non-accelerated filers and smaller public companies, the Commission intends that this future guidance will be scalable and responsive to their individual circumstances. The guidance will also be sensitive to the fact that many companies have already invested substantial resources to establish and document programs and procedures to perform their assessments over the last few years. The form of the guidance has yet to be determined. Public comment will be invited.
  • Revisions to PCAOB Auditing Standard No. 2. AS 2 addresses An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements.
  • SEC oversight of PCAOB's programme for inspecting auditing firms.
  • Extension of compliance for non-accelerated filers. To permit non-accelerated filers and their auditors to have the benefit of the management guidance that the SEC intends to issue, and to have the opportunity to evaluate and implement the revisions that the PCAOB plans to make to AS No. 2, the Commission expects to issue a short postponement of the effective date of the Commission's rules implementing Section 404 for non-accelerated filers. All filers would be expected to comply with the management assessment of internal controls required by Section 404(a) of Sarbanes-Oxley for fiscal years beginning on or after Dec. 16, 2006.
  • Click for (PDF 82k).

    New Global Offerings Services newsletter

    21 May 2006

    We have posted the (PDF 179k).

    Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. Past GOs Newsletters are Here.

    Updated EFRAG endorsement status report

    21 May 2006

    The European Financial Reporting Advisory Group has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

    Click to download the Endorsement Status as of 18 May 2006 (PDF 28k). Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:

    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.