2021

Independence beyond Rules: Farsighted approaches to global challenges

May 07, 2021

On May 7, 2021, the International Ethics Standards Board for Accountants (IESBA) released a speech by Dr. Stavros Thomadakis given virtually at the British Accounting and Finance Association's Audit and Assurance Conference on the importance of independence.

Review the full speech on the IESBA's website.

IOSCO calls for globally consistent, comparable, and reliable sustainability standards

Feb 24, 2021

On February 24, 2021, the International Organization of Securities Commissions (IOSCO) has released a statement noting the urgent need for global sustainability standards and supporting a Sustainability Standards Board (SSB) under the IFRS Foundation.

The IOSCO Board has reviewed the progress made over the past year since the publication of its report Sustainable Finance and the Role of Securities Regulators and IOSCO in April 2020. IOSCO concludes that there is an urgent need to improve the consistency, comparability, and reliability of sustainability reporting, with an initial focus on climate change-related risks and opportunities, which would subsequently be broadened to other sustainability issues.

The IOSCO Board identified three priority areas for improvement in sustainability-related disclosures by companies and asset managers:

  1. Encouraging globally consistent standards;
  2. promoting comparable metrics and narratives; and
  3. coordinating across approaches.

The IOSCO Board expresses a clear commitment to work with the IFRS Foundation Trustees and other stakeholders to advance these priorities. IOSCO notes that its engagement with the Trustees will focus on the following objectives:

  • Establishing an SSB with a strong governance foundation. IOSCO welcomes the announcement by the Trustees of the IFRS Foundation on February 2, 2021 signaling the next phase of their work towards establishing an SSB under the IFRS Foundation structure as they have received clear feedback on their September 2020 consultation that the IFRS Foundation should play a role in this area. IOSCO looks forward to assessing the final proposals by the Trustees of the IFRS Foundation and to consider the future endorsement of the proposed SSB and its standards similar to its role in the endorsement and oversight of international accounting standard-setting by the IASB.
  • Building on existing efforts. IOSCO encourages the SSB to leverage the content of existing sustainability-related reporting frameworks. IOSCO welcomes the initiative of the alliance of leading sustainability reporting organizations and their prototype for an approach to climate-related disclosures published in December 2020; IOSCO encourages further consideration of this prototype as a potential basis for the SSB to develop climate-related reporting standards.
  • Encouraging a “building blocks” approach. IOSCO encourages a “building blocks” approach to establishing a global sustainability reporting system. This would provide a consistent and comparable baseline of sustainability-related information that is material to enterprise value creation, while also providing flexibility for coordination on reporting requirements that capture wider sustainability impacts. IOSCO aims to support ongoing international coordination and to help encourage global consistency on wider sustainability disclosure requirements. To this end, IOSCO is ready to explore the establishment of a multi-stakeholder expert consultative committee within the IFRS Foundation structure.

In conclusion, IOSCO repeats the statement in its response to the Trustees' consultation that together, the IFRS Foundation’s initiative and the parallel collaborative initiative of an alliance of sustainability reporting organizations can further efforts to facilitate comparable high-quality international standards that provide the content that capital markets need, within a transparent standard-setting architecture with a robust and inclusive governance structure.

Review the full statement on the IOSCO's website.

Larry Fink 2021 Letter to CEOs

Jan 29, 2021

In his annual letter to CEOs, BlackRock’s Larry Fink discusses how the events of 2020 are helping to accelerate an economic transformation.

Managing transfer pricing risks with advance pricing agreements

Jul 08, 2021

On July 8, 2021, Deloitte USA issued a tax@hand article relating to managing transfer pricing risks with advance pricing agreements (APAs).

Transfer pricing enforcement activities are expected to increase throughout the world as countries endeavor to handle the aftermath of the COVID-19 pandemic while continuing to adopt the G20/OECD's base erosion and profit shifting (BEPS) final recommendations, and multinational enterprises (MNEs) revisit their existing structures and transfer pricing policies in light of the evolving tax climate.

Globally, tax authorities are dedicating increased resources to transfer pricing examinations of cross-border transactions, which can lead to double taxation for MNEs. In this enforcement environment, managing transfer pricing risks proactively continues to be one of the focus areas for MNEs that engage in cross-border intercompany transactions.

Many MNEs manage their transfer pricing in a proactive manner through advance pricing agreements (APAs), where APAs often helped them resolve complex issues in a practical manner, giving tax transfer pricing certainty for multiple years at a time. In this current environment, MNEs likely will have increased interest, including those that have not previously considered an APA as a component of their transfer pricing risk management strategy. De­loitte Global has de­vel­oped its high qual­ity e-learn­ing mod­ules to help users de­velop their knowl­edge and ap­pli­ca­tion of the ba­sic prin­ci­ples and con­cepts of IFRS and IAS Stan­dards. Our e-learn­ing on IFRS has been a lead­ing ed­u­ca­tional and train­ing re­source on IFRS since it was ini­tially re­leased in 2004, with a range of cor­po­rate, ed­u­ca­tional and pro­fes­sional or­ga­ni­za­tions us­ing the con­tent as their pri­mary tool for IFRS ed­u­ca­tion.

For further detail read the tax@hand article bulletin on the Deloitte USA website.

Market Trends 2020/21: Cybersecurity-Related Disclosures

Aug 24, 2021

This practice note identifies cybersecurity risk disclosures that offer detailed discussions on the potential reputational, financial, or operational harm resulting from cybersecurity breaches as well as the potential litigation or regulatory costs, policies, and procedures in addressing cybersecurity risks.

This piece concludes with practical advice on how to prepare and enhance the required disclosures on cybersecurity risks and incidents.

Review the article on Mayer Brown LLP's website.

New edition of Reporting Matters highlights key role corporate transparency plays in addressing pressing global challenges

Oct 21, 2021

On October 21, 2021, the World Business Council for Sustainable Development (WBCSD) released the 2021 edition of "Reporting matters". According to a new report, reporting and accountability are more important than ever as businesses strengthen their sustainability commitments through WBCSD’s updated membership conditions.

Spanning 168 leading global companies, this year’s research shows continued progress in corporate sustainability reporting. This year, Reporting Matters presents a focus on the role that corporate reporting plays in shaping and communicating the contribution of businesses in addressing unprecedented challenges in climate change, nature loss, and inequality.

Review the report on the WBCSD's website.

OSFI issues updated requirements for technology and cyber incident reporting and new cyber self-assessment

Aug 13, 2021

On August 13, 2021, the Office of the Superintendent of Financial Institutions (OSFI) released updated requirements governing how federally regulated financial institutions (FRFIs) should disclose and report technology and cyber security incidents to OSFI.

The updated Technology and Cyber Security Incident Reporting Advisory supports a coordinated and integrated response to technology and cyber security incidents when they occur at FRFIs).

Separately, OSFI also released an updated Cyber Security Self-Assessment that helps FRFIs gauge and improve their current state of readiness in the face of emerging and expanding cyber threats.

Review the press release and updated requirements on the OSFI's website.

OSFI launches consultation on climate-related risks in the financial sector

Jan 11, 2021

On January 11, 2021, the Of­fice of the Su­per­in­ten­dent of Fi­nan­cial In­sti­tu­tions (OSFI) launched a three-month consultation with the publication of a discussion paper, “Navigating Uncertainty in Climate Change: Promoting Preparedness and Resilience to Climate-Related Risks”. The paper focuses on risks arising from climate change that can affect the safety and soundness of federally regulated financial institutions (FRFIs) and federally regulated pension plans (FRPPs). Comments are requested by April 12, 2021.

Through this consultation, OSFI is seeking to engage FRFIs, FRPPs and other interested stakeholders in a dialogue on climate-related risks. OSFI is interested in how FRFIs and FRPPs define, identify, measure and build resilience to climate‑related risks. OSFI is also seeking feedback on how it can facilitate FRFIs' and FRPPs' preparedness for, and resilience to, these risks. This input will guide the development of regulatory and supervisory approaches that meet OSFI's mandate of protecting depositors, policyholders and private pension plan beneficiaries while allowing institutions to compete and take risks.

Re­view the consultation material on the OSFI's web­site. 

Public input welcomed on climate change disclosures

Mar 15, 2021

On March 15, 2021, the Securities and Exchange Commission (SEC) issued a statement from Acting SEC Chair, Allison Herren Lee, in which she requests for public input from investors, registrants, and other market participants on climate change disclosure.

She encourages commenters to submit empirical data and other information in support of their comments. Original data from respondents, including academics, data providers, and other organizations, may assist in assessing the materiality of climate-related disclosures, and the costs and benefits of different regulatory approaches to climate disclosure.

Review the statement on the SEC's website.

Remarks by OSFI Superintendent Mr. Jeremy Rudin to the 2021 RBC Capital Markets Canadian Bank CEO Conference

Jan 11, 2021

On January 11, 2021, Superintendent Jeremy Rudin of the Of­fice of the Su­per­in­ten­dent of Fi­nan­cial In­sti­tu­tions (OSFI) spoke at this conference and made his remarks entitled “Passion, Persistence and Effective Regulation and Supervision”.

As part of his remarks, Mr. Rubin stated that Canada’s banking regulator will not yet consider lifting restrictions on banks’ dividends and share buybacks introduced at the start of the pandemic, even though the largest lenders continue to amass growing stockpiles of surplus capital. As parts of the country move into deeper phases of lockdown, he said he is waiting to see “a clear path to a durable recovery” and less “economic uncertainty” before considering any changes.

See a complete copy of Mr. Rubin’s remarks at the conference on the OSFI's web­site. 

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