News

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Global Ethics Board Consults on Professional Skepticism

May 14, 2018

On May 14, 2018, the International Ethics Standards Board for Accountants (IESBA) released its consultation paper, "Professional Skepticism – Meeting Public Expectations". Comments are requested by August 15, 2018.

In response to regulatory and other stakeholder feedback on the topic, the paper explores:

  1. The behavioral characteristics comprised in professional skepticism;
  2. Whether all professional accountants should apply these behavioral characteristics; and
  3. Whether the International Code of Ethics for Professional Accountants (including International Independence Standards) should be further developed to address behaviors associated with the exercise of appropriate professional skepticism.

Through this initiative, the IESBA also aims to reinforce the effective exercise of professional skepticism by auditors.

The consultation paper was developed following close coordination with the International Auditing and Assurance Standards Board (IAASB) and the International Accounting Education Standards Board (IAESB), and with advice from the IESBA Consultative Advisory Group.

Review the press release and consultation paper on the IESBA's website.

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Understanding the GDPR: A Comparison Between the GDPR, PIPEDA and PIPA

May 14, 2018

On May 14, 2018, Bennett Jones released an article to assist Canadian organizations with their potential compliance efforts with respect the European Union’s General Data Protection Regulation (GDPR), which will come into force on May 25, 2018.

The article is intended to provide a non-exhaustive, high-level comparison between: (i) the GDPR; (ii) Canada's Personal Information Protection and Electronic Documents Act (PIPEDA); together with (iii) the Personal Information Protection Acts of Alberta and British Columbia (collectively, the PIPAs).

Review the article on Bennett Jones' website.

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Overview of proposed IAS 8 amendments

May 11, 2018

On May 11, 2018, the International Accounting Standards Board (the Board) published a short overview of the exposure draft "Accounting Policy Changes (Proposed amendments to IAS 8)".

The proposed amendments would introduce a new threshold that requires a company to consider the expected benefits to users of financial statements and the cost to the company of applying accounting policy changes that result from IFRS Interpretation Committee agenda decisions retrospectively.

Review the press release and the overview on the Board's website.

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Insurance contracts transition resource group holds second technical meeting

May 11, 2018

On May 11, 2018, the International Accounting Standards Board (the Board) released the recording of the Transition Resource Group (TRG) for Insurance Contracts' second technical meeting held on May 2, 2018.

The purpose of the TRG is to seek feedback on potential issues related to implementation of IFRS 17, Insurance Contracts. During the meeting, the TRG discussed the following:

  • Combination of insurance contracts
  • Determining the risk adjustment for non-financial risk in a group of entities
  • Cash flows within the contract boundary
  • Boundary of reinsurance contracts held with repricing mechanisms
  • Determining the quantity of benefits for identifying coverage units
  • Implementation challenges outreach report
  • Reporting on other questions submitted

A summary on the meeting and audio recordings of each session are available on the TRG meeting page on the International Accounting Standards Board's website.

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Impact of New Revenue Recognition Rule on the Russell 3000

May 11, 2018

On May 11, 2018, Audit Analytics posted an analysis on how as Russell 3000 public companies with December year-ends implement the new revenue recognition standard, they are beginning to see a pattern – smaller companies provide fewer details and generally are not as prepared as larger companies.

Smaller companies may lack resources to make timely accounting changes, resulting in an implementation lag and significant issues, including restatements and control weaknesses.

Looking at 2,803 Russell 3000 companies that referenced ASC 606 in Q4 financial statements, they considered the following factors when assessing a company’s implementation process:

  • Adoption Method Used
  • Control Weakness
  • Impact Disclosure
  • Revenue streams and specific areas of accounting affected
  • Other impacts
  • Completion stage
  • SEC Comment Letters
  • Outlook

Review the analysis on Audit Analytics' website.

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Can Blockchain Really Change The Financial Suite?

May 09, 2018

On May 9, 2018, Financial Executives International (FEI) published highlights from a report survey issued by Financial Executives Research Foundation (FERF), which looked at the growing promise and practical challenges of applying blockchain solutions to financial reporting and accounting work.

The report, sponsored by Deloitte, interviews industry leaders, academics and practitioners regarding their hopes distributed ledger technology. The paper also includes a survey of of financial leaders regarding the current use of cryptocurrencies like Bitcoin and their plans to adopt blockchain solutions in the future.

Review the highlights from the report's survey on FEI's website.

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Lessons Learned From SEC Comment Letters On the New Revenue Standard

May 06, 2018

On May 6, 2018, the Financial Executives International (FEI) published an article that analyzes eight SEC comment letters that have been issued related to the new revenue standard.

The FASB’s Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, provides a comprehensive revenue recognition model intended to reduce the complexity inherent in today’s guidance by increasing financial statement comparability across companies and industries.

Review the article on FEI's website.

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IFRS 17 Transition and Progress Report Requirements for Federally Regulated Insurers

May 04, 2018

On May 4, 2018, the Office of the Superintendent of Financial Institutions (OSFI) issued an advisory addressing the transition to IFRS 17.

The Insurance Companies Act stipulates in the case of federally regulated insurers (FRIs) that “financial statements shall, except as otherwise specified by the Superintendent, be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants.”

Generally Accepted Accounting Principles for FRIs is effectively International Financial Reporting Standards as issued by the IASB. OSFI may specify additional accounting guidance or disclosure requirements, or require FRIs to use a specific option within an applicable accounting standard. OSFI makes these specifications in situations where there is a prudential need for additional accounting guidance.

To support FRIs in their transition to IFRS 17, OSFI issued an advisory regarding:

  • the option to early adopt IFRS 17;
  • accounting for financial guarantee contracts; and
  • semi-annual progress reporting to OSFI.

Review the press release and the advisory on the OSFI's website.

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Q&A with an expert at the SEC: Scott Bauguess

May 03, 2018

On May 3, 2018, the Securities and Exchange Commission (SEC) released a keynote address given by Scott Bauguess, Deputy Director and Deputy Chief Economist in the SEC’s Division of Economic and Risk Analysis (DERA), where he discussed the role of machine readability in an AI world.

Review the speech on the SEC's website and an interview on Merrill Corporation's website.

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SEC chief accountant warns against mischief in non-GAAP reporting

May 03, 2018

On May 3, 2018, Accounting Today published an article on how Wesley Bricker, the chief accountant at the Securities and Exchange Commission (SEC), cautioned an audience of accountants against any mischief with non-GAAP financial measures.

Mr. Bricker told the attendees at Baruch College’s Financial Reporting Conference in New York: “With non-GAAP and other disclosures, our rules require that companies must have disclosure controls and procedures, which typically would include appropriate governance practices regarding the measures and policies and controls that prevent error, manipulation, or mischief with the numbers, including a policy that addresses how any changes in the non-GAAP measure will be reported and how corrections of errors will be evaluated”.

Review the full article on Accounting Today's website.

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