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October

IAS Plus quarterly newsletter for October 2007

17 Oct 2007

The October 2007 IAS Plus Quarterly Newsletter has been published.

The newsletter reports on the 3rd quarter 2007 activities of the IASB, the IFRIC, and the IASC Foundation, and also on worldwide issues and events relating to international financial reporting:

 

Report on choice in the UK audit market

16 Oct 2007

The United Kingdom Financial Reporting Council (FRC) has published the final report of the Market Participants Group that has advised the FRC on its Choice in the UK Audit Market project.

The Group was established in October 2006 to provide advice to the FRC on possible actions that market participants (that is, companies, investors and audit firms) could take to mitigate the risks arising from the characteristics of the market for audit services to public interest entities in the United Kingdom. The Grou's recommendations are summarised below. Click for:

Summary of Recommendations on Choice in the UK Audit Market:

  1. The FRC should promote wider understanding of the possible effects on audit choice of changes to audit firm ownership rules, subject to there being sufficient safeguards to protect auditor independence and audit quality.
  2. Audit firms should disclose the financial results of their work on statutory audits and directly related services on a comparable basis.
  3. In developing and implementing policy on auditor liability arrangements, regulators and legislators should seek to promote audit choice, subject to the overriding need to protect audit quality.
  4. Regulatory organisations should encourage participation on standard setting bodies and committees by appropriate individuals from different sizes of audit firms.
  5. The FRC should continue its efforts to promote understanding of audit quality and the firms and the FRC should promote greater transparency of the capabilities of individual firms.
  6. The accounting profession should establish mechanisms to improve access by the incoming auditor to information relevant to the audit held by the outgoing auditor.
  7. The FRC should provide independent guidance for audit committees and other market participants on considerations relevant to the use of firms from more than one audit network.
  8. The FRC should amend the section of the Smith Guidance dealing with communications with shareholders to include a requirement for the provision of information relevant to the auditor selection decision.
  9. When explaining auditor selection decisions, Boards should disclose any contractual obligations to appoint certain types of audit firms.
  10. Investor groups, corporate representatives, auditors and the FRC should promote good practices for shareholder engagement on auditor appointments and re-appointments.
  11. Authorities with responsibility for ethical standards for auditors should consider whether any rules could have a disproportionately adverse impact on auditor choice when compared to the benefits to auditor objectivity and independence.
  12. The FRC should review the Independence section of the Smith Guidance to ensure that it is consistent with the relevant ethical standards for auditors.
  13. Regulators should develop protocols for a more consistent response to audit firm issues based on their seriousness.
  14. Every firm that audits public interest entities should comply with the provisions of a Combined Code-style best practice corporate governance guide or give a considered explanation.
  15. Major public interest entities should consider the need to include the risk of the withdrawal of their auditor from the market in their risk evaluation and planning.

 

IASC Foundation trustees will meet

15 Oct 2007

The Trustees of the International Accounting Standards Committee Foundation, under which the IASB operates, will meet on 31 October and 1 November 2007 at the offices of Morgan Stanley, 1585 Broadway, New York, NY 10036. The meeting is open to public observation.

The agenda posted on the IASCF website currently covers only the afternoon of 31 October (13:15-17:00h), with topics as follows:

iascfagenda.gif

New York City, Public Portion, Afternoon of 31 October 2007 (13:15-17:00pm)


  • Approval of July Minutes
  • Report of the Procedures Committee
    • Feedback from September meeting with IASB
    • Discussion of IASB consultation initiatives
    • Feedback statements
    • Cost benefit analyses
    • New Committee name
  • Report of the IASB Chairman
    • Review of convergence activities (United States, Japan, China, and India)
    • 2008 goals
    • Discussion of Proposed Agenda Items
    • Discussion of any implications of sub-prime and liquidity crisis for IFRSs
  • Update on long-term funding

 

PCAOB will discuss audit implications of IFRS filings

15 Oct 2007

The Standing Advisory Group of the US Public Company Accounting Oversight Board will meet Thursday, 18 October 2007 in Washington.

At the meeting, the group will address, among other things, the potential audit implications of the Securities and Exchange Commission's recent proposed rules and concept release regarding the use of International Financial Reporting Standards (IFRSs). The SEC's proposed rules would allow foreign private issuers to file with the SEC financial statements prepared in accordance with IFRSs, as published by the International Accounting Standards Board, without a reconciliation to US generally accepted accounting principles. The SEC's concept release seeks comment on whether US issuers should also be allowed to file financial statements prepared in accordance with IFRSs, as published by the IASB. Click for:

 

IAS Plus Newsletter on joint ventures exposure draft

14 Oct 2007

Deloitte's IFRS Global Office has published a special edition IAS Plus Newsletter on Proposed Changes to Accounting for Joint Ventures.

The newsletter discusses Exposure Draft ED 9 proposing to replace IAS 31 Interests In Joint Ventures with a new standard to be titled Joint Arrangements. A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity together and share decision-making relating to that activity. Joint arrangements include joint assets, joint operations, and joint ventures. Comment deadline is 11 January 2008.

 

CICA website on transition to IFRSs and ISAs

14 Oct 2007

The Canadian Institute of Chartered Accountants has launched a New Website that Focuses on Transition to IFRSs and ISAs. It can be accessed through the Transition to International Standards icon located below the menu in the left column of the CICA Home Page www.cica.ca, and from the homepages of the Canadian provincial institutes.

CICA developed the new website to help its members prepare for a smooth and effective transition:
  • from Canadian GAAS to International Standards on Auditing (ISA) for periods after December 15, 2009
  • from Canadian GAAP to International Financial Reporting Standards (IFRS) for publicly accountable enterprises for periods beginning on or after January 1, 2011; and,
  • to a new strategy for Financial Reporting by Private Enterprises.
Click here for:

Reminder about upcoming comment deadline: IFRIC D22

14 Oct 2007

We remind you that the deadline is Friday, 19 October 2007, for responding to IFRIC Draft Interpretation D22 – Hedges of a Net Investment in a Foreign Operation..

IFRIC D22 clarifies two issues that have arisen on two accounting standards – IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 39 Financial Instruments: Recognition and Measurement – about the accounting for hedging foreign currency risk within a company and its foreign operations. The IFRIC proposal clarifies what qualifies as a risk in the hedge of a net investment in a foreign operation and where within a group the instrument that offsets that risk may be held.

IASB will meet with representatives of EFRAG

13 Oct 2007

Representatives of the IASB and the European Financial Reporting Advisory Group (EFRAG) will meet at the IASB's offices in London from 14:00h to 16:00h on Monday, 15 October 2007. The meeting will be open to public observation and will be webcast.

Click here for the Agenda (PDF 7k).

 

SEC Chairman Cox discusses IFRS issues

13 Oct 2007

In his keynote address to the 2007 US-EU Corporate Governance Conference in Washington earlier this week, US SEC Chairman Christopher Cox discussed a range of issues including accounting convergence and potential SEC recognition of IFRSs.

Here is an excerpt from his remarks. Click to  Download Chairman Cox's Remarks (PDF 65k).

The International Accounting Standards Board and the U.S. Financial Accounting Standards Board have for years been working on a convergence project to eliminate needless regulatory friction between International Financial Reporting Standards and U.S. Generally Accepted Accounting Principles. And that has made possible the SEC's announcement that we are taking the next steps on our Roadmap to eliminate the reconciliation requirement in the United States, and that we are even considering allowing U.S. issuers to use IFRS....

IFRS promises to integrate our markets. But that promise is jeopardized if IFRS isn't applied faithfully and consistently across jurisdictions. Regulators must beware the impulse to develop nationally-tailored versions of IFRS, and we must cooperate with one another in implementing a set of standards that is faithfully and consistently applied.

Since 2005, the SEC has been following a publicly announced 'Roadmap' that charts a path to when issuers would no longer be required to reconcile their IFRS financials statements to U.S. GAAP. We're well down the path charted in the 'Roadmap', and we're still very much on track to eliminating the reconciliation requirement by 2009.

 

EU single market update on accounting and auditing

12 Oct 2007

The Internal Market and Services Directorate of the European Commission has published a special edition of the newsletter Single Market News reviewing 15 years of the single market in the EU.

One section in this issue is titled Accounting & Auditing Rules Redefined for the Global Marketplace and discusses the 'successful application of IFRSs' in the EU (see page 17).
Click for Newsletter.

 

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