News

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ThinkTwenty20 releases June 2024 Newsletter

Jun 26, 2024

On June 26, 2024, ThinkTwenty20 released its June 2024 issue, featuring discussions related to AI, Blockchain, IoT, and sustainability strategies.

The June 2024 issue of ThinkTWENTY20 includes an interview with Bob Tapscott discussing his book on integrating AI, Blockchain, and IoT, titled "Trivergence." Additionally, the issue launches a new AI-focused series by Eric Cohen aimed at financial professionals and introduces a book that guides companies on evolving from sustainability reporting to actionable strategies in corporate responsibility.

Access the newsletter on ThinkTwenty20’s website.

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IFAC Publishes New Guide on Sustainability Assurance; Focuses on “What to Expect”

Jun 26, 2024

On June 26, 2024, the International Federation of Accountants (IFAC) published "Sustainability Assurance: What to Expect." This publication aims to guide stakeholders through the evolving landscape of sustainability assurance, urging collaboration and a shared commitment to high-quality standards.

IFAC Chief Executive Officer, Lee White highlighted the crucial role of professional accountants in the global transition towards sustainable business practices, emphasizing their expertise in data analysis and innovation. He noted that sustainability assurance might initially differ from traditional financial reporting, potentially including modified assurance reports to reflect these changes.

As global policymakers and regulators rapidly introduce new requirements for sustainability reporting and assurance, IFAC advocates for a harmonized, global disclosure system and continues to collaborate with international organizations like the IFRS Foundation, ISSB, and IOSCO. Additionally, sample reports are provided within the publication to offer practical insights and guidance for preparers.

Access the publication on the IFAC’s website.

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ISSB concludes agenda consultation by releasing a feedback statement

Jun 24, 2024

On June 24, 2024, the International Sustainability Standards Board (ISSB) announced significant strides in harmonizing sustainability reporting standards during the IFRS Foundation Conference coinciding with London Climate Action Week, emphasizing strategic collaborations and a focused two-year work plan.

ISSB Chair Emmanuel Faber announced a new two-year work plan and a Feedback Statement during the IFRS Foundation Conference coinciding with London Climate Action Week. This initiative seeks to consolidate various frameworks and standards under the ISSB, reducing the complexity and fragmentation of sustainability disclosures. Key relationships have been strengthened with organizations such as the GHG Protocol, CDP, and the Global Reporting Initiative to align and enhance the quality and comparability of sustainability data.

A significant focus of the ISSB's efforts is on harmonizing disclosures related to corporate transition plans and GHG emissions. This includes taking responsibility for the Transition Plan Taskforce's disclosure materials and maintaining alignment with the GHG Protocol standards through strategic partnerships and memorandums of understanding. These efforts aim to provide the market with transparent, consistent, and decision-useful sustainability information, reducing fragmentation and improving transparency.

Overall, the ISSB's work is supported by over 20 jurisdictions worldwide, integrating ISSB standards into their regulatory frameworks to create a global baseline for high-quality sustainability disclosures. This international initiative reflects a shift towards a unified approach to financial and sustainability reporting to meet the evolving needs of investors and stakeholders and support sustainable investment decisions globally.

Access the press release on the IFRS Foundation website.

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Updated IASB and ISSB work plan — Analysis (June 2024)

Jun 24, 2024

Following the IASB's and ISSB's June 2024 meetings, we have analyzed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in May 2024.

Below is an analysis of all changes made to the work plan since our last analysis on May 28, 2024

Standard-setting projects

  • Management commentary — the IASB has decided to finalize the management commentary project by issuing targeted improvements to the practice statement (expected in H1 2025).

Maintenance projects

Research projects

  • Post-implementation review of IFRS 16 — a new entry indicates that a request for information is now expected in H1 2025.

Governance

Developments expected to occur in July 2024

The above is a faithful comparison of the IASB and ISSB work plan on May 28, 2024 and June 24, 2024.

For access to the current work plan at any time, please click here.

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SEC Released Insights from Corp Fin Director Erik Gerding at the April 2024 SEC Speaks Conference

Jun 24, 2024

On June 24, 2024, the Securities and Exchange Commission (SEC) released a statement from the Division of Corporation Finance (Corp Fin) Director Erik Gerding that reflected his opening remarks and the matters discussed on a panel addressing the Corp Fin’s Disclosure Review Program during the April 2024 SEC Speaks Conference in Washington, DC.

Erik Gerding provided updates at the Corp Fin Workshop, focusing on the Division's Disclosure Review Program. He emphasized the program’s role in protecting investors, facilitating capital formation, and maintaining orderly markets, noting that over 70% of the Division's 400+ professionals are dedicated to this task.

In 2024, the SEC's Division of Corporation Finance will emphasize enhanced disclosure requirements, focusing on several key areas. These include compliance with new U.S. GAAP disclosures effective from December 2023, adherence to non-GAAP regulations, and detailed reporting in management's discussion and analysis (MD&A) about critical accounting estimates and supplier finance programs. The Division will continue to prioritize disclosures from China-based companies, particularly concerning the risks from governmental interventions.

Additionally, disclosures related to commercial real estate will be scrutinized for detailed risk reporting and management strategies, especially considering the recent banking industry disruptions. The Division will also focus on the implications of artificial intelligence in business operations, ensuring that companies provide comprehensive, specific disclosures that reflect the actual and potential impacts on their business. Cybersecurity will remain a critical area, with the Division assessing compliance with the newly adopted rules for reporting material cybersecurity incidents and related risk management strategies. Furthermore, implementing other new laws, such as those concerning clawbacks and universal proxies, will also be closely monitored to ensure accurate and timely disclosures that meet the evolving standards set forth by regulatory changes.

Access the speech on the SEC’s website.

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IMF First Deputy Manager Delivers Speech on ‘Navigating Fragmentation, Conflict, and Large Shocks’ at the NBU-NBP Annual Research Conference

Jun 21, 2024

On June 21, 2024, the International Monetary Fund (IMF) First Deputy Managing Director, Gita Gopinath, delivered a speech on ‘Navigating Fragmentation, Conflict, and Large Shocks’ at the NBU-NBP Annual Research Conference; the conference focused on the challenges that large shocks pose for the conduct of monetary policy.

In her speech at the conference, she discussed the substantial ramifications of large geopolitical shocks on monetary policy, emphasizing the need for global economic systems to adapt to a more shock-prone environment. She highlighted how the ongoing geopolitical conflicts have accelerated the fragmentation of the global economy and increased defence spending, influencing national and economic security strategies across nations.

She argues that these changes, while necessary for current geopolitical realities, could lead to a global economy that is more susceptible to shocks, characterized by heightened inflationary pressures and constrained economic growth. The speech delves into the broader economic impacts, particularly the inflationary spikes driven by disruptions in energy and food supplies, and how these have reshaped economic growth, trade relationships, and public finances.

To address these challenges, she emphasizes several adjustments to monetary and fiscal policies to bolster economic resilience against large shocks. These include adopting more flexible monetary policy approaches, allowing central banks to respond dynamically to inflation and stabilize employment. She advocates for strategically using foreign exchange interventions to manage exchange rate volatility. She stresses the importance of aligning fiscal policies with monetary efforts to control demand pressures without inflating prices further. Enhancing financial regulations is crucial, as is implementing structural reforms to improve labour market flexibility and economic diversification. She calls for an integrated policy framework that combines monetary, fiscal, and structural strategies, ensuring a cohesive and robust response to financial shocks. Additionally, adopting a risk management approach in policy settings to prepare for potential worst-case scenarios is vital for maintaining economic stability.

Access the speech on the IMF’s website.

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ISSB publishes June 2024 podcast

Jun 18, 2024

On June 18, 2024, the International Sustainability Standards Board (ISSB) released a podcast hosted by ISSB Chair Emmanuel Faber and Vice-Chair Sue Lloyd discussing the latest developments from the ISSB.

The podcast discusses the following:

Access the press release on the IFRS Foundation website.

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CAQ Publishes Report on Auditing in the Age of Generative AI

Jun 14, 2024

On June 14, 2024, the Center for Audit Quality (CAQ) published a report titled "Auditing in the Age of Generative AI," which delves into the impact of generative artificial intelligence technologies on the financial reporting profession.

Since the release of advanced generative artificial intelligence (genAI)-powered chatbots in November 2022, the interest in genAI technologies has increased notably, especially in the financial reporting sector. A CAQ survey found that one-third of audit partners have seen AI deployment or planning in their industries' financial reporting processes, indicating a significant shift toward using AI to improve accounting practices.

GenAI, a subset of AI, utilizes probabilistic technology to generate content like text and images and is particularly adept at summarizing data and recognizing patterns, which can significantly aid in preparing financial documents and analyses. This publication guides auditors on leveraging genAI to enhance accounting and financial reporting while addressing the new risks it introduces. As genAI reshapes financial reporting, auditors must maintain a critical oversight role, ensuring the reliability and appropriateness of genAI outputs, alongside complying with auditing standards.

Access the report on the CAQ’s website.

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PCAOB Modernizes Its Rules by Strengthening Accountability for Contributing to Firm Violations

Jun 12, 2024

On June 12, 2024, the Public Company Accounting Oversight Board (PCAOB) approved adopting an amendment to PCAOB Rule 3502, previously titled ‘Responsibility Not to Knowingly or Recklessly Contribute to Violations.’ The rule, initially enacted in 2005, governs the liability of an associated person of a registered public accounting firm who contributes to that firm’s violations of the laws, rules, and standards that the PCAOB enforces.

This rule change simplifies the process of sanctioning associated persons by only requiring proof of negligence instead of the higher threshold of recklessness. The decision to modify the rule followed extensive consultations and feedback from various stakeholders, including investors, after a proposal was put forward in September 2023. While the initial proposal was broader, the final rule maintains a more targeted approach, focusing on violations explicitly connected to the firm with which an individual is associated.

The PCAOB's adoption of this rule underscores a commitment to enforcing stricter standards within the auditing community, ensuring that those responsible for significant breaches of audit standards are held appropriately accountable. Pending approval from the U.S. Securities and Exchange Commission (SEC), the new rule will be enforced 60 days after its endorsement, enhancing the regulatory framework governing audit practices and reinforcing investor protection.

Access the amended rule on the PCAOB’s website.

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IPSASB develops climate-related disclosure standard for the public sector

Jun 12, 2024

On June 12, 2024, the International Public Sector Accounting Standards Board (IPSASB) announced that it is currently developing a climate-related disclosure standard for the public sector. This will be the first IPSASB Sustainability Reporting Standard (IPSASB SRS), and a draft for public comment is expected in Q4 2024.

The standard is being developed with the support of the World Bank, an institution dedicated to providing financing, policy advice and technical assistance to governments of developing countries. It is intended to increase transparency and enable governments and other public sector entities to make more informed decisions about their contributions towards addressing the climate emergency, hold them accountable for their interventions, and foster trust in their efforts.

The IPSASB has also published a stakeholder engagement plan outlining how stakeholders can provide feedback about the project through mechanisms that are already a central part of the IPSASB’s due process.

Access the press release on the IPSASB’s website.

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