The report argues that sus­tain­abil­ity needs to be put at the heart of the financial system and that to deliver systemic change, ESG factors and long-term sus­tain­abil­ity risks and op­por­tu­ni­ties will be needed in corporate gov­er­nance, core indices, accounting standards and credit ratings.

On accounting frame­works, the authors note: “While there are numerous ini­tia­tives on sus­tain­abil­ity reporting, the ultimate ambition has to be the con­ver­gence of financial and sus­tain­abil­ity in­for­ma­tion, supported by a more com­pre­hen­sive set of accounting standards. In­te­grated reporting supports this con­ver­gence qual­i­ta­tively through reporting that links sus­tain­abil­ity factors with firms’ strategy. Accounting standards can help advance the quan­ti­ta­tive element.”

The report is aimed at readers in Europe and beyond, who are concerned about issues of sus­tain­abil­ity, financial markets and the wider chal­lenges for society. It is intended to provide the basis for fruitful and con­struc­tive con­sul­ta­tions as the HLEG engages in the next phase of its work. The HLEG welcomes comments, questions and dis­cus­sions during the process of preparing its final report for pub­li­ca­tion in December 2017.

For further information, refer to the press release and the full report on the European Com­mis­sion website.

CETA has attracted much attention, with warnings from environmental NGOs that the deal could lead to a weakening of environmental, health and social protection standards.

The CETA trade deal will remove tariffs on most traded goods and services. It also provides for the mutual recognition of certification for a wide range of products.

In negotiations, the EU secured protection for over 140 European geographical indications for food and drinks sold on the Canadian market. Sustainable development provisions were included to maintain environmental and social standards and ensure that trade and investment enhance both.

Review the article on the EU Business' website.

In addition to being used as a form of payment, digital currency also is held as an asset by businesses, which can sell the currency when its value goes up. The increased presence in the market indicates the need for consistent accounting guidance, the Digital Chamber of Commerce said.

Some financial professionals believe digital currency should be accounted for under Topic 305, Cash and Cash Equivalents; others say Topic 825, Financial Instruments, applies to electronic money; while others consider Topic 350, Intangible Assets, or, Topic 330, Inventory, the more appropriate accounting guidance.

The conflicting views — and lack of authoritative accounting guidance — leads to auditing questions, which can turn off investors, and, in turn, research and development.

This is similar to a position the Australian Accounting Standards Board took in December 2016 when it presented a paper to the IASB’s main advisory panel, the Accounting Standards Advisory Forum (ASAF), suggesting the international board investigate consistent accounting for digital currency.

The paper’s author, Henri Venter, director in Deloitte Australia’s National Accounting Technical Team, said the lack of clear guidance in international accounting standards meant digital currencies were accounted for either under IAS 2, Inventory , or IAS 38, Intangible Assets, but the measurement guidance in neither standard provides sufficient information to analysts and investors about the value of the electronic money.

Review the article on Thomson Reuters' website.

As Corporations Canada points out, Bill C-25 makes three important changes to how corporations are governed and regulated: it gives shareholders the ability to vote against directors, changes how documents for shareholder meetings are to be sent to and accessed by shareholders, and requires certain corporations to report the diversity of their directors and senior management.

The biggest change that Bill C-25 would bring about is the first one, giving shareholders the ability to vote against directors. "Currently, shareholders can either vote for a director or withhold their vote," states an article by PLLR Lawyers. "In situations where only one person is vying to fill a vacancy on the board of directors, just a handful of 'for' votes can get that person elected." If C-25 passes, a majority of "against" votes would result in that individual not getting elected.

Review Bill C-25 on the Parliament of Canada's website and an article on Pryke Lambert Leathley Russell LLP's website.

In the article, the authors mention that the second consultation document is a significant 30-page document that is divided into five segments, each with a series of background comments, suggestions and request for further comments. 

In particular, the Department seeks input for the 2019 update on clarifying the fintech business powers of financial institutions, facilitating fintech collaboration; and streamlining the bank entry and exit framework. The comments regarding earthquake risk are also notable given that a particular focus of comments on the First Consultation Paper was on the risk of a low probability, high severity earthquake and the consideration of what needs to be done for the property and casualty sector to be stable and more resilient.

Review the article on Fasken Martineau's website and the press release and consultation document on the Department of Finance Canada's website.

In a video discussion, FEI Managing Editor Olivia Berkman discusses the evolution of blockchain on financial reporting with Will Bible, Audit & Assurance Partner, Deloitte & Touche LLP and Jake Benson, CEO, of Libra, a New York-based blockchain financial reporting start-up.

They discuss how blockchain is being implemented incrementally in financial reporting and right now it's being used in specific applications for business processes, such trading, consortiam, or supply chain management. But blockchain could really have an impact on every single line item on the balance sheet or income statement, because it is a recordkeeping technology. 

View the video on FEI's website.

They aim to build greater financial system resilience by supporting private and public entities as they design and implement cybersecurity policies and operating frameworks. The G7FE are nonbinding, high-level building blocks that provide the foundation for private and public entities, as they develop their approach to cybersecurity, supported by their risk management and culture.

Review the press release and the report on US Department of the Treasury's website.

The insights, captured in the report Future Trends in Sustainability Reporting, provide practical guidance to reporting organizations working to respond to the risks and opportunities on the path to a sustainable future.

Review the report on the GRI's website.

Executives aren't always willing to admit there is fraud happening on their watch, so they convince themselves, and others, that it isn’t there.

Internal pressure can lead organizations to downplay their vulnerability to fraud, says Mr. Zitting. He also states that "whistleblowers need to keep blowing their whistles, and decision makers should start to take advantage of the advanced data analytics technology at their disposal to determine red flags and uncover fraud data trails".

Review the Q&A on the FEI's website.

The proposed guidance for the first time links key concepts in the IESBA Code of Ethics for Professional Accountants (the Code) and clarifies their application, namely:

• how compliance with the fundamental principles in the Code supports professional skepticism by auditors and assurance practitioners for audit, review, and other assurance engagements; and
• the importance of professional accountants obtaining a sufficient understanding of the facts and circumstances known to them when exercising professional judgment in applying the conceptual framework underpinning the Code.

Comments are requested by July 25, 2017.

Review the press release and Exposure Draft on the IESBA's website.