In the podcast, Nick Main (Deloitte Global Leader for Sustainability & Climate Change Services) and Valerie Chort (National Leader of Corporate Responsibility and Sustainability, Deloitte & Touche LLP), offer their perspectives on the report, including such topics as some of the primary drivers of business engagement in the sustainability agenda, the progression of standards development in sustainability over the next 5-10 years, and the most significant downsides to not addressing the sustainability challenges, both for governments and for companies.

Click for:

• access to the recorded podcast (link to deloitte.com website)
• Sustainability 2011 — A difficult coming of age (PDF 376k).

The International Auditing and Assurance Standards Board (IAASB) has released a plan for a post-implementation review of the clarified International Standards on Auditing (ISAs).

The post-implementation review is the second phase of the IAASB's efforts to monitor the implementation of these standards, following the release of a progress report in November 2010. The primary objective post-implementation review is to gather information about the use of the clarified ISAs to assist the IAASB to determine what, if any, changes are needed:

• in order to increase the consistency of practitioners' understanding of the ISAs
• for the revised ISAs covered by the review to achieve the IAASB's goals in revising them in an efficient and effective manner.

The review is focused on whether the clarified ISAs are being consistently understood and implemented in a way that achieves the IAASB's goals in revising and redrafting them, rather than revisiting whether the clarified ISAs need to be further enhanced to achieve audit quality (although any such changes identified during the review will be considered by the IAASB).

The IAASB aims to gather information during 2012, summarise the information received in early 2013, and present the findings at the June 2013 IAASB meeting for discussion. This timing will assist the IAASB in determining its priorities for 2014 and its next three year strategic planning cycle (2015—2017).

Input for the purpose of the review is requested by the IAASB no later than 31 October 2012. Click for IAASB press release (link to IFAC website).

First, the Social Business Initiative is intended to help this emerging sector to fulfil its unexploited potential. This is complemented by an ambitious strategy for Corporate Social Responsibility to generate a higher level of trust and consumer confidence and improve companies' contribution to society's well-being. Both initiatives reinforce Commission efforts to engage with the private sector on social and environmental issues, especially relevant in times of public budget constraints.

The Commission is also proposing to improve transparency and promote sustainable business among multinationals. Mining and forestry companies would have to be more open about taxes, royalties and bonuses paid worldwide.

Finally, the Commission is proposing to simplify accounting rules for SMEs, potentially saving them up to 1.7 billion per year. The proposals would also reduce burdensome reporting obligations for listed companies, including SMEs, adding further to cost savings.

The proposals for revising the Accounting Directives and the Transparency Directive will now be passed on to the European Parliament and the EU's Council of Ministers for adoption. The Communication on Social Entrepreneurship forms the starting point for a number of legislative and non-legislative initiatives that are to be rolled out over the next two years. There will be a first opportunity to discuss them with stakeholders at the Conference on Social Economy and Social Business hosted by the Commission on 18 November 2011 in Brussels.

Please click for:

• EC press release (link to EC website) with a summary of the key elements of the package and links to all relevant documents
• our overview of accounting developments in Europe

The proposal builds on the Strategic Direction' published in 2010. The main aspects of the proposal are:

1. Early voluntary application of IFRS full (group 1) or IFRS for SMEs (group 2)
2. Expected timing of convergence with international standards:
   1. 31/12/2011: Proposed standards (in Spanish) published on CPTC website for public consultation (based on the official Spanish translation as at 1 January 2010)
   2. 31/03/2012: Issuance of final standards (IFRSs) by Colombian regulatory authorities
   3. 31/12/2012: Date of transition for Colombian entities in accordance with IFRS 1
   4. 31/12/2013: Financial statements published under current Colombian standards and in accordance with IFRS (pro-forma, without comparatives)
   5. 31/12/2014: First IFRS financial statements published with comparatives, and subject to audit.
3. The proposal paper seeks input on four specific questions (Deloitte translation):

• The Standards and Interpretations listed in the proposal paper have been developed by the IASB for universal application. Do you think that regardless of this fact, one or more standards and interpretations or part of them, contain requirements that would be ineffective or inappropriate if applied in Colombia? Is your answer is yes, please select the aspects or circumstances that make them unsuitable for Colombian entities.
• The CPTC proposes that the Colombian regulatory authorities issue principles, standards, interpretations and guidelines for accounting and financial reporting. Do you consider it necessary to issue interpretations and/or additional guidance above that issued by IASB, or for an understanding the application of an IFRS or IAS? Please specify the standard and the particular issue where there is the need for additional implementation guidance or interpretation.
• Are additional exceptions to those provided in IFRS 1 for the first application of international accounting standards required by Colombian entities? If your answer is yes, please specify the required additional exceptions and explain why the exception is necessary.
• Do you believe any of the standards or interpretations issued by the IASB may be contrary to any provision of law in Colombia? If your answer is yes, please select the aspects or topics that might be contrary to Columbian statutory provisions and provide an alternative proposal (with technical support) as to how they might be rectified.

Comments are due by 31 March 2012.

Click for Propuesta de normas de contabilidad e información financiera para la convergencia hacia Estándares Internacionales (PDF 1,405k, in Spanish).

The proposals result from a project the IESBA agreed to undertake in response to a letter submitted to the IESBA by the International Organization of Securities Commissions (IOSCO) in response to an IESBA Exposure Draft issued in July 2008, which proposed new drafting conventions for the Code of Ethics for Professional Accountants (the Code).

The exposure draft proposes:

• to introduce a modified requirement that a professional accountant take whatever actions that might be available as soon as possible to satisfactorily address the consequences of a breach of a provision of the Code and to determine whether to report the breach to those who may have been affected by the breach
• in relation to independence requirements for audits, to require a firm to determine whether termination of the audit engagement is necessary or whether action can be taken to satisfactorily address the consequences of a breach such that the firm can still issue an audit opinion
• to require documentation of all identified breaches, the actions taken with respect to the breaches, and all matters discussed with those charged with governance and, if applicable, with relevant regulators.

The IESBA proposes that the changes be effective for breaches identified on and after 1 January 2013.

The Consultation Paper is open for public comment until 23 January 2012. Click for IESBA press release (link to IFAC website).

Click for the EFRAG Update (PDF 182k, link to EFRAG website). Links to earlier issues are available here.

Regarding the convergence project, Chairman Seidman commented on the progress made by the FASB and IASB on converged standards on business combinations, stock compensation, nonmonetary exchanges, fair value measurements, and comprehensive income. She noted that the remaining priority issues (revenue recognition, leasing, and financial instruments) will be resolved under the Memorandum of Understanding. She mentions that both the exposure drafts on revenue recognition and leases will be 're-exposed' for quality control purposes which consequentially will add to the timeline. On financial instruments, she says, "impairment is the most important issue that we should be working on in response to the financial crisis . . . we are developing an approach based on expected losses, rather than probable, incurred losses, which will reduce the barriers to timely loss recognition."

In addition, Chairman Seidman addresses the issue of IFRS incorporation in the United States. She comments that the FASB has "supported the goal of developing high-quality, comparable, global accounting standards." She outlines three key points to recognise as standard setters work on comparable global standards. The points are: 1) the United States has a set of high-quality accounting standards; 2) "U.S. investors, preparers, auditors, users of financial statements, and other stakeholders want to have a strong, clear and effective voice in the standard setting process"; 3) a shift to an international standard must maintain or improve upon the U.S. accounting standard.

Seidman also commented on the SEC staff's paper on "condorsement" noting four positive aspects. She believes "condorsement" shows: 1) U.S. support for the development of global accounting standards; 2) a practical approach of retaining the label "U.S. GAAP"; 3) some level of U.S. involvement when creating a new standard; and 4) a gradual approach to dealing with the remaining differences between U.S. GAAP and IFRS.

In conclusion, Seidman commented on progress made to the issue of standard-setting for private companies. She believes the proposed Private Company plan, which creates a new Private Company Council whose role will be to "identify, propose, deliberate, and formally vote on specific exceptions or modifications to U.S. GAAP for private companies," will complement the FASB efforts in addressing private companies' issues. The creation of a "separate standard-setting board for private companies under the auspices of the FAF was one of the recommendations made earlier this year by the Blue-Ribbon Panel on Standard Setting for Private Companies."

Click for the speech transcript (PDF 352k, link to FASB website).

Please click for EFRAG press release on IAS 1 and EFRAG press release on IAS 19 (both links to EFRAG website); links to the endorsement letters are provided in the press releases.

EFRAG has updated its endorsement status update accordingly (PDF 47k, link to EFRAG website).

The Consultation Paper's proposed framework includes information on the scope of the service performance information reported, the public sector entity's objectives, the achievement of those objectives, and a narrative discussion of the achievement of all the objectives. The Consultation Paper also proposes a standardised service performance information terminology and working definitions to enhance users' understanding of service performance information reported as outlined in the proposed framework.

The Consultation Paper is open for public comment until 15 March 2012. Click for IPSASB press release (link to IFAC website).