News

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ISSB issues October 2023 update & podcast

Oct 26, 2023

On October 26, 2023, the International Sustainability Standards Board (ISSB) issued its October update focusing on the preliminary decisions of the ISSB, impacting various projects outlined in their work plan. Additionally, Chair Emmanuel Faber and Vice-Chair Sue Lloyd discussed these developments in the latest episode of the ISSB podcast.

The topics discussed include:

  • recent progress towards jurisdictional adoption of IFRS S1 and IFRS S2,
  • updates on recent progress some of their partners have made,
  • an update on capacity building and translations,
  • recent meetings with key stakeholders,
  • an update from their October board week; and
  • preliminary common themes from feedback to their agenda consultation.

The update and the podcast can be accessed on the IFRS Foundation website.

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IAASB's Global Outreach Unveils Comprehensive FAQs on Materiality in Sustainability Assurance (ISSA 5000)

Oct 25, 2023

On October 25, 2023, the International Auditing and Assurance Standards Board (IAASB) published a comprehensive set of Frequently Asked Questions (FAQs), on materiality matters, to better help stakeholders navigate the recently proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements.

The FAQ compilation addresses a variety of questions, including how the concept of materiality applies to sustainability reporting and assurance; the definition of double materiality; and how an assurance practitioner considers an organization’s “materiality process” during a sustainability assurance engagement, among other questions and answers.

The comment period for proposed ISSA 5000 is open until December 1, 2023. To promote broad and diverse participation in the ongoing public consultation, the IAASB has developed a stakeholder survey, which may be especially useful for stakeholders wishing to share less technical or overall feedback, and a response template.

Access the FAQ on the IAASB website.

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AcSB issues future domestic work plan consultation survey

Oct 23, 2023

On October 23, 2023, the Accounting Standards Board (AcSB) of Canada issued Future Domestic Work Plan Consultation surveys to gather input on potential domestic projects for its 2024-2025 Annual Plan and beyond. Through the survey, the AcSB would like to determine which additional projects to prioritize when residual resources become available.

The survey covers proposed projects under the domestic standards in the CPA Canada Handbook – Accounting:

  • Part II - Accounting Standards for Private Enterprises
  • Part III - Accounting Standards for Not-for-Profit Organizations
  • Part IV - Accounting Standards for Pension Plans

Access the surveys on the FRAS Canada website.

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IESBA staff releases Q&As to support adoption and implementation of International Independence Standard on group audits

Oct 23, 2023

On October 23, 2023, the Staff of the International Ethics Standards Board for Accountants (IESBA) released a questions and answers (Q&A) publication on the pronouncement Revisions to the Code Relating to the Definition of Engagement Team and Group Audits. The revisions to the Code address holistically the various independence considerations in an audit of group financial statements.

The Q&A publication is designed to highlight, illustrate, or explain aspects of the revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement. It will assist firms, national standards setters, and professional accountancy organizations in adopting and/or implementing the revisions. The Q&As will also assist regulators and audit oversight bodies, the corporate governance community, investors, preparers, educational bodies or institutions, and other stakeholders in understanding the revisions to the Code. 

The development of the Q&As has been informed by the IESBA’s extensive discussions and consultations with a wide range of stakeholders and the IESBA’s own deliberations during the development and finalization of the pronouncement.

The pronouncement is coming into effect for audits of financial statements and group financial statements for periods beginning on or after December 15, 2023, with early adoption permitted.

Access the Staff Q&A on the IESBA website.

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WBCSD publishes annual review of sustainability and integrated reports

Oct 20, 2023

On October 20, 2023, the World Business Council for Sustainable Developments (WBCSD) has published its 2023 annual review of its member companies' sustainability and integrated reports.

This year, it is titled "Delivering Impact in a Time of Complexity", marking the eleventh instalment of the ‘Reporting matters’ publication. It introduces an evolved evaluation framework designed to guide companies in an era of rapidly evolving reporting regulations and increased stakeholder expectations.

Access the report on the WBCSD website.

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IASB publishes proposals for amendments under its annual improvements project

Oct 16, 2023

On September 12, 2023, the International Accounting Standards Board (IASB) published an exposure draft IASB/AI/ED/2023/1 'Annual Improvements to IFRS Accounting Standards — Volume 11'. It contains proposed amendments to five standards as result of the IASB's annual improvements project. Comments are requested by December 11, 2023.

The IASB uses the annual improvements process to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

The exposure draft proposes the following amendments:

 Standard

Subject of proposed amendment

IFRS 1 First-time Adoption of International Financial Reporting Standards

Hedge accounting by a first-time adopter. The proposed amendment addresses a potential confusion arising from an inconsistency in wording between paragraph B6 of IFRS 1 and requirements for hedge accounting in IFRS 9 Financial Instruments.

IFRS 7 Financial Instruments: Disclosures

Gain or loss on derecognition. The proposed amendment addresses a potential confusion in paragraph B38 of IFRS 7 arising from an obsolete reference to a paragraph that was deleted from the standard when IFRS 13 Fair Value Measurement was issued.

IFRS 7 Financial Instruments: Disclosures (implementation guidance only)

Disclosure of deferred difference between fair value and transaction price. The proposed amendment addresses an inconsistency between paragraph 28 of IFRS 7 and its accompanying implementation guidance that arose when a consequential amendment resulting from the issuance of IFRS 13 was made to paragraph 28, but not to the corresponding paragraph in the implementation guidance.

IFRS 7 Financial Instruments: Disclosures (implementation guidance only)

Introduction and credit risk disclosures. The proposed amendment addresses a potential confusion in paragraph IG20C in the implementation guidance accompanying IFRS 7 because that paragraph fails to state that the example does not illustrate all the requirements in paragraph 35M of IFRS 7.

IFRS 9 Financial Instruments

Lessee derecognition of lease liabilities. The proposed amendment addresses a potential lack of clarity in the application of the requirements in IFRS 9 to account for an extinguishment of a lessee’s lease liability that arises because paragraph 2.1(b)(ii) of IFRS 9 includes a cross-reference to paragraph 3.3.1, but not also to paragraph 3.3.3 of IFRS 9.

IFRS 9 Financial Instruments

Transaction price. The proposed amendment addresses a potential confusion arising from a reference in Appendix A to IFRS 9 to the definition of ‘transaction price’ in IFRS 15 Revenue from Contracts with Customers while term ‘transaction price’ is used in paragraphs of IFRS 9 with a meaning that is not necessarily consistent with the definition of that term in IFRS 15.

IFRS 10 Consolidated Financial Statements

Determination of a ‘de facto agent’. The proposed amendment addresses a potential confusion arising from an inconsistency between paragraphs B73 and B74 of IFRS 10 related to an investor determining whether another party is acting on its behalf by aligning the language in both paragraphs.

IAS 7 Statement of Cash Flows

Cost method. The proposed amendment addresses a potential confusion in applying paragraph 37 of IAS 7 that arises from the use of the term ‘cost method’ that is no longer defined in IFRS Accounting Standards.

The exposure draft does not contain proposed effective dates for the proposed amendments as the intention is to decide on these after the exposure period. However, early application of the amendments is proposed to be permitted.

Review the press release and the exposure draft on the IFRS Foundation website.

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OSFI Unveils Two Draft Guidelines: Ensuring Integrity and Security in Financial Institutions and Enhancing Operational Resilience and Risk Management

Oct 13, 2023

On October 13, 2023, the Office of the Superintendent of Financial Institutions (OSFI) released two draft guidelines; an Integrity and Security Guideline, which sets expectations for the integrity and security of financial institutions, including protection against foreign interference and, an enhanced Guideline E-21 on Operational Resilience and Operational Risk Management

The draft Integrity and Security Guideline provides clarity on what integrity and security entail for financial institutions, how they relate to one another, and where they are already reflected in our current guidelines. Enhanced Guideline E-21 sets expectations for operational resilience. It modernizes OSFI’s guidance on operational risk management, including new expectations for business continuity management, crisis management, change management, and data risk management.

The two consultations were announced at the same time given that operational resilience and operational risk management contribute to the integrity and security of financial institutions.

The feedback on the Integrity and Security Guideline is expected by November 24, 2023 while feedback on Guideline E-21 is expected by February 5, 2023.

Review the Draft Integrity and Security Guideline and Guideline E-21 on the OSFI website.

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2022 IAASB handbook of international quality management, auditing, review, other assurance, and related services pronouncements

Oct 13, 2023

The IAASB released the 2022 Handbook of International Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements.

The IAASB released the 2022 Handbook of International Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements. The latest edition of the handbook includes:

  • IAASB’s new and revised suite of quality management standards:
  • International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
  • ISQM 2, Engagement Quality Reviews
  • International Standard on Auditing (ISA) 220 (Revised), Quality Management for an Audit of Financial Statements
  • Conforming and Consequential Amendments to Other ISAs Arising from the Quality Management Project
  • Conforming and Consequential Amendments to the IAASB’s Other Standards as a Result of the New and Revised Quality Management Standards
  • International Standard on Related Services (ISRS) 4400 (Revised), Agreed-Upon Procedures Engagements
  • The following standards, which are not yet effective for this version of the handbook, are included in the back of Volume 1:
  • ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)
  • Conforming and Consequential Amendments to Other International Standards arising from ISA 600 (Revised)

Review the three volumes of the report on the IAASB website.

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IAASB improves transparency in auditor’s report on independence to reflect revisions in the IESBA Code of Ethics

Oct 12, 2023

On October 12, 2023, the International Auditing and Assurance Standards Board (IAASB) released amendments aimed at bolstering transparency and providing auditors with a clear mechanism to action changes to the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics.

The updated IESBA Code mandates firms to publicly reveal their application of independence requirements for public interest entities in financial statement audits. The IAASB's revisions establish a concise and practical framework for fulfilling this obligation, facilitating effective communication in the auditor's report and with governance entities.

During the formulation of these changes, the IAASB closely collaborated and coordinated with the IESBA, ensuring alignment between crucial concepts in both organizations' standards to the best possible extent.

Review the amendments on the IAASB website.

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CPAB released 2023 Interim Inspection results in Audit Quality Insights report

Oct 12, 2023

On October 12, 2023, The Canadian Public Accountability Board (CPAB) released its interim public report on its 2023 audit quality assessments. The report provides a snapshot of themes and insights from the 2023 audit quality assessment work to date.

In its preliminary 2023 regulatory assessments, significant findings were identified in seven out of the 53 files inspected at the four largest firms, constituting 13 percent of the total. This marked a slightly higher rate of findings compared to the previous year. The detailed inspection results for other firms, both annually and non-annually inspected, will be incorporated into their comprehensive annual report, which will be released in March 2024.

The interim report shed light on various aspects, including the progress made in implementing the new Canadian quality management standards. It offered insights into their initiatives concerning climate, fraud detection, the integration of artificial intelligence in audits, and public disclosures. Additionally, the report outlined crucial considerations for audit committees as they commenced year-end audit preparations.

Review the report on the CPAB website.

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