June

IFRS Foundation seeks nominees for four Trustees

13 Jun 2010

The IFRS Foundation (new name as of 1 July 2010 for the IASC Foundation, the IASB's parent body) is seeking candidates to fill vacancies for four Trustees to serve for three-year terms from 1 January 2011 until 31 December 2013. All terms may be renewed once.

Agenda project pages updated

12 Jun 2010

We have updated the following pages on IAS Plus to reflect the discussions and decisions at the special joint IASB-FASB meetings held on 1 June 2010 and 10 June 2010:

Deloitte IFRS newsletters in Chinese

12 Jun 2010

Deloitte China has published the Chinese translations of the following IAS Plus Update newsletters:

Notes from special 10 June 2010 IASB-FASB meeting

11 Jun 2010

The IASB and FASB held a special joint meeting to discuss Insurance Contracts on Thursday 10 June 2010 at the IASB's offices in London.

Following the joint meeting, the IASB held a Board meeting on its own to discuss Joint Ventures. Click to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

EFRAG strategy for 'proactivity'

11 Jun 2010

The European Financial Reporting Advisory Group (EFRAG) has published its Strategy for European Proactive Financial Reporting Activities.

The strategy is intended to enhance EFRAG's role in influencing future standard-setting developments by engaging with European constituents and providing timely and effective input to the early phases of the IASB's work. EFRAG's strategy is 'underpinned by a set of aims that contribute to achieving EFRAG's overall objectives'. EFRAG identifies its four strategic aims as follows:
  • Aim 1: Engage with European constituents to ensure we under stand their issues and how financial reporting affects them;
  • Aim 2: Influence the development of global financial reporting standards;
  • Aim 3: Provide thought leadership in developing the principles and practices that underpin financial reporting; and
  • Aim 4: Promote solutions that improve the quality of information, are practical, and enhance transparency and accountability.
Click to view Strategy for European Proactive Financial Reporting Activities (PDF 1,970k).

 

Spanish newsletter on improvements to IFRSs

10 Jun 2010

We have posted the following Spanish language newsletter from Deloitte (Colombia).

Notes from IPTF meeting with SEC staff

08 Jun 2010

The International Practices Task Force (IPTF) of the AICPA's Center for Audit Quality meets periodically with the staff of the SEC to discuss emerging financial reporting issues relating to SEC rules and regulations.

The IPTF has posted the Final Highlights of the November 24, 2009 Joint Meeting of the IPTF and the SEC Staff (PDF 139k). A number of the topics discussed relate to IFRSs. Here is the complete list:
  1. Issues related to Venezuela
  2. Monitoring inflation in certain countries
  3. SEC reporting implications: A foreign private issuer that uses US GAAP and the reporting of accounting changes that require retrospective application
  4. SEC reporting implication: A foreign private issuer issues a complete set of interim financial statements prepared in accordance with IFRS-IASB
  5. SEC reporting implications: Restatement of previously issued IFRS-IASB financial statements for IFRS 3R purchase price adjustments
  6. Application of ASC 855, Subsequent Events to Financial statements of certain Foreign Private Issuers and certain financial statements filed pursuant to S-X Rule 3-05 and Rule 3-09
  7. SMEs for financial statements of S-X Rule 3-05 and Rule 3-09 of foreign businesses
  8. Selected financial data for IFRS-IASB issuers
  9. Applying the Item 17 price level changes accommodation to highly inflationary economies as defined under MFRS
  10. Foreign private issuers that voluntarily file using domestic forms
  11. Canadian registrants and adoption of IFRS

 

Newsletter on reporting comprehensive income

08 Jun 2010

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB Proposes Changes to the Presentation of Profit or Loss and Other Comprehensive Income.

[Prior to June 2010, these newsletters were titled IAS Plus Update.] The newsletter explains the IASB's 27 May 2010 proposal to amend IAS 1 Presentation of Financial Statements to require:
  • Presentation of 'profit or loss' and 'other comprehensive income' (OCI) as separate components in a single, continuous financial statement; and
  • Separate presentation in OCI of items that will be reclassified to profit or loss ('recycled') in a subsequent period.
FASB has published a similar proposal. Click for the Project Page on IAS Plus.
Click to view IFRS in Focus Newsletter – IASB Proposes Changes to the Presentation of Profit or Loss and Other Comprehensive Income (PDF 68k).

 

Study of 347 accounting frauds in the United States

07 Jun 2010

COSO (the Committee of Sponsoring Organizations of the Treadway Commission) has published a study, Fraudulent Financial Reporting: 1998-2007, that examines 347 alleged accounting fraud cases investigated by the US Securities and Exchange Commission during that ten-year period.

It provides an in-depth analysis of the nature, extent, and characteristics of those accounting frauds and offers insights regarding new and ongoing issues needing to be addressed. Most of the frauds examined occurred before the Sarbanes-Oxley Act went into effect.

Some of the more critical findings of the study are:

  • Financial fraud affects companies of all sizes, with the median company having assets and revenues just under $100 million.
  • The median fraud was $12.1 million. More than 30 of the fraud cases each involved misstatements/misappropriations of $500 million or more.
  • The SEC named the CEO and/or CFO for involvement in 89% of the fraud cases. Within two years of the completion of the SEC investigation, about 20% of CEOs/CFOs had been indicted. Over 60% of those indicted were convicted. Over 80% of the CEOs/CFOs left the company within two years. In 47% of the cases, the SEC barred one or more individuals from serving as an officer or director of a public company. Civil fines were imposed in 65% of the cases, and disgorgements were imposed in 43%.
  • The average fraud period extended 31.4 months (median 24 months).
  • The two most common techniques used to fraudulently misstate the financial statements involved improper revenue recognition (61% of the cases) and asset overstatements primarily by overvaluing existing assets or capitalising expenses (51%). Understating expenses and liabilities occurred in 31% of the cases.
  • Many of the commonly observed board of director and audit committee characteristics such as size, meeting frequency, composition, and experience do not differ meaningfully between fraud and no-fraud companies. Recent corporate governance regulatory efforts appear to have reduced variation in observable board-related governance characteristics.
  • Virtually all of the fraud firms received an unqualified audit opinion on the last set of fraudulently misstated financial statements. However, the unqualified audit report of fraud firms was more likely (56%) to contain additional explanatory language than for no-fraud firms (36%).
  • Twenty-six percent of the firms engaged in fraud changed auditors during the period examined compared to a 12% rate for no-fraud firms.
  • Initial news in the press of an alleged fraud resulted in an average 16.7% abnormal stock price decline for the fraud company in the two days surrounding the announcement.
  • News of an SEC or Department of Justice investigation resulted in an average 7.3% abnormal stock price decline.
  • Companies engaged in fraud often experienced bankruptcy, delisting from a stock exchange, or material asset sales at rates much higher than those experienced by no-fraud firms.
The report of the study may be Downloaded from the COSO Website (PDF 6,199k). Click here for (PDF 139k). The COSO study was conducted by four accounting professors: Mark S Beasley of North Carolina State University, Joseph V Carcello of the University of Tennessee, Dana R Hermanson of Kennesaw State University, and Terry L Neal of the University of Tennessee.

 

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.