While GRI, SASB, CDP and CDSB set the frameworks and standards for sustainability disclosure, including climate-related reporting, along with the TCFD recommendations, the IIRC provides the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals.

These organizations have now declared their intent to provide:

• joint market guidance on how the frameworks and standards can be applied in a complementary and additive way;
• a joint vision of how these elements could complement financial generally accepted accounting principles (financial GAAP) and serve as a natural starting point for progress towards a more coherent, comprehensive corporate reporting system; and
• joint commitment to drive toward this goal, through an ongoing programme of deeper collaboration between them, and a stated willingness to engage closely with other interested stakeholders.

The “big picture” view of the relationship between the standards and frameworks, including their relationship to the IASB and FASB standards, foresees an approach to standard-setting that results in a globally agreed set of sustainability topics and related disclosure requirements under a rigorous and ongoing standard-setting due processes that will result in high-quality global standards.

The comprehensive corporate reporting system the paper envisions would then see three nested sets of reporting:

• Reporting on matters that reflect the organisation’s significant impacts on the economy, environment and people;
• reporting on the sub-set of sustainability topics that are material for enterprise value creation; and
• reporting that is already reflected in the financial accounts.

Reporting already reflected in the annual accounts would continue to be the remit of IASB and FASB and the subset of sustainability topics that are material for enterprise value creation would be covered by CDSB and SASB. Both sets would be connected by an overarching integrated reporting framework. GRI Standards would enable companies to report sustainability information that describes their significant impacts on the economy, environment, or people, and hence their contributions towards sustainable development and could also be used to describe impacts on the company. CDP would fill the crucial role of technology in reporting and enable access for all stakeholders to corporate performance on sustainability topics. The standards rsulting from this comprehensive reporting system would enable companies to collect information about performance on a given sustainability topic once but provide relevant information to different users through appropriate communication channels.

Review the joint press release and statement of intent.

The publication explores where and how an organization should show the impacts of the pandemic and the uncertainties that lie ahead in its integrated report.

Review the FAQ – Reporting in a time of crisis on the IRC's website.

The IRC also offers a dedicated website with publications, resources and examples of COVID-19 reporting in integrated reports.

Audit committee and auditor oversight update

This Update summarizes recent developments relating to public company audit committees and their oversight of financial reporting and of the company’s relationship with its auditor. This update includes: (i) COVID-19 disclosure and financial reporting guidance: Part III, (ii) IIA and IFAC issue an audit committee call to action on COVID-19; (iii) G&A finds that 90 percent of the S&P 500 publish a sustainability report; (iv) Want to improve the reliability of your ESG reporting? The CAQ suggests asking your auditor for help; (v) Protiviti’s annual survey finds rising SOX compliance costs; (vi) Thinking of replacing your auditor’s tax services? Get ready for a higher tax bill – At least temporarily; and (vii) The Audit Blog

Auditing goes remote

The COVID 19 pandemic dramatically altered the day-to-day existence of most companies. Though businesses may have had remote-work contingency plans in place, few could have expected the need to implement these procedures almost overnight. And just as state governments enacted shutdowns requiring all non-essential workers to work remotely, many businesses were working with their auditors to finalize year-end financial statement audits and other attest reporting.

Key considerations for issuers and auditors regarding going-concern analysis

Issuers in the United States and their auditors have related, but distinct, obligations to evaluate on a periodic basis whether there is substantial doubt about the issuer’s ability to continue as a going concern. In normal times, this evaluation, conducted with an appropriate level of diligence, results as to almost all major public companies in the conclusion that there is no substantial doubt about the entity’s ability to meet its obligations in the months to come.

But these are not normal times. As the COVID-19 crisis takes an ever-greater toll on the American economy, and as multiple well-known companies declare bankruptcy, the going-concern assessment has taken on new relevance for issuers, auditors, and others in the financial-reporting community.  As a result, the number of issuer filings that contain a going-concern disclosure appears to have substantially increased. In this piece, we review some of the significant considerations that apply to the going-concern analysis from both the issuer’s and the auditor’s perspectives.

Digital Transformation: Powering the great reset

COVID-19 is a watershed moment for the digital transformation of business. The rules for success have changed and are ever more reliant on harnessing the power of digital models to create new value and experiences. Accelerating digital transformation, with purpose, is essential for companies to survive and thrive in the new normal. Successful leaders will now seize the opportunity to advance a new trajectory for digital transformation that aligns with the changing role of business: to be a powerful enabler of long-term value creation for all its stakeholders.

Boards beware: Increase in cyber attacks reveals new weaknesses

As the pandemic persists, corporate leadership must closely follow cybersecurity risks, vulnerabilities, and threats as bad actors take advantage of increased work-from-home scenarios—in which companies perhaps haven’t fully focused on security. These risks left unchecked have the potential to put company assets and viability in peril.

Reimagining the urban office

The Covid-19 pandemic has abruptly challenged a decade of corporate real estate and workplace design decisions by calling into question the purpose of large centralized office locations. With many organizations maintaining work-from-home policies for the foreseeable future, we argue that now is an optimal time to plan for a post-pandemic workplace strategy by revisiting the conventional wisdom behind the centralized office. A more distributed model throughout cities and geographic regions, we believe, would better support employee performance and organizational resiliency while contributing to the improvement of the urban landscape and local communities.

Don’t let the pandemic sink your company culture

If you are like many of the executives with whom we’ve been talking over the last few months, you and your leadership team invested years cultivating an effective culture — one that is both strategically relevant, because it prioritizes the behaviors essential to the success of your business, and strong, in the sense that employees trust that it is real and value it. Such cultures help companies attract and retain great people and contribute to fantastic bottom-line performance.

Emerging pathways towards a post-COVID-19 reset and recovery

The COVID-19 crisis and the political, economic, and social disruptions it has caused have exposed the inadequacies of our current economic systems. Amid global concern for lives, livelihoods, and the planet, leaders find themselves at a historic crossroads for shaping the recovery and are challenged to reset economies on a new trajectory of more inclusive and sustainable growth. This edition of the World Economic Forum’s Chief Economists Outlook sets out a high-level agenda for a path forward on three key challenges: How can economic policy be retooled to reduce inequality and improve social mobility? What will be the new sources of economic growth? How will success be defined?

Q2 Reporting: How should a U.S. public company quantify the impact of COVID-19?

U.S. public companies are thinking about how to quantify the effects of COVID-19 in their second-quarter public disclosures. Unlike the first quarter, they have now seen three full months of COVID-19 impact, with complex effects that varied within the period and across geographies and segments.  The effects are important for understanding Q2 results, and for anticipating results going forward – which in turn implicates a host of issues, including liquidity, funding, covenant compliance, impairment testing and going concern analysis. So there are good reasons to try to quantify the impact of COVID-19, and the SEC has encouraged “robust disclosure and engagement” in the COVID-19 context, with particular emphasis on the need for forward-looking disclosures.

Fast-track solution for COVID-19 dispute resolution

COVID-19 has made it difficult for many companies to perform some of their contractual obligations, giving rise to a high number of corporate disputes, particularly relating to the application of force majeure and change in law provisions. The volume and similarity of potential claims means traditional dispute resolution methods are too slow, burdensome and costly to expedite swift resolution. With this in mind, we have developed NRF Covid Resolve, a dispute resolution process supported through a single online platform, that aims to achieve an outcome for each dispute within six weeks – or four weeks if arbitration-only.

Review the effective dates for new standards on the AcSB's website.

As part of the Public Company Accounting Oversight Board’s (PCAOB) strategic goal of enhancing transparency and accessibility through proactive stakeholder engagement, the PCAOB has committed to engaging more directly and more often with audit committees.

In an effort to provide transparency into that process and as part of the reporting out of what they heard, PCAOB staff released a new resource for audit committees, Conversations with Audit Committee Chairs: COVID-19 and the Audit.

Review the publication on the PCAOB's website.

The COVID-19 pandemic significantly affected governments, businesses, and the public globally. Government responses and the COVID-19-related financial and economic consequences will need to be considered in financial reporting of public sector organizations.

Review the non-authoritative guidance on the PSAB's website.

The amendments aim to reduce regulatory burden and address certain concerns expressed by stakeholders.

For reporting issuers that are not venture issuers, the amendments will change the criteria for determining whether a completed acquisition is significant, based on three tests set out in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102). The amendments:

• require that at least two of the three existing significance tests in NI 51-102 are triggered (previously, only one test had to be triggered)
• increase the significance threshold in those tests from 20 per cent to 30 per cent.

The amendments are being adopted following an extensive consultation process, including comment letters and other stakeholder feedback, as well as consideration of historical data on past BAR filings and exemptive relief granted to assess the impact of the amendments.

Provided all necessary ministerial approvals are obtained, the amendments are effective on November 18, 2020.

Review the press release on the CSA's website and the amendments on the CSA members’ websites.

Dis­cus­sion points in­cluded:

• Role and Mind­set
• Tax Plan­ning
• IAASB-IESBA Coordination
• Definitions of Listed Entity and Public Interest Entity (PIE)
• Tech­nol­ogy
• eCode Phase 2

Re­view the high­lights and pod­cast on the IESBA's web­site.

The publication, Applying the Code’s Conceptual Framework in COVID-19 Circumstances: Scenarios in Taxation and Valuation Services, provides guidance to professional accountants in applying the conceptual framework in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) during certain circumstances brought on by the COVID-19 pandemic.

The publication uses four hypothetical scenarios covering services or activities relating to taxation and valuation services. Two scenarios include guidance for professional accountants in public practice, and two scenarios are focused on professional accountants in business.

Review the press release on the IESBA's website.

The IASB is seeking feedback on the Discussion Paper Business Combinations—Disclosures, Goodwill and Impairment. The webinar discusses the Board’s preliminary views expressed in the Discussion Paper, which set out to improve the information companies provide to investors, at a reasonable cost, about the acquisitions those companies make. The recording lasts approximately 50 minutes.

Listen to the recording on the IASB's website.