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IFRS Foundation publishes proposed IFRS Taxonomy update

Oct 14, 2019

On October 14, 2019, the IFRS Foundation published "IFRS Taxonomy 2019 — Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)". Comments are requested by December 13, 2019.

The proposed update includes elements to reflect the new disclosure requirements introduced by the amendments to IFRS 9, IAS 39 and IFRS 7, issued by the Board on September 26, 2019.

Review the press release and proposed update on the IASB’s website.

FRC (United Kingdom Financial Reporting Council) Image

FRC publishes thematic review findings of IFRS 9, IFRS 15, and IAS 36 company disclosures

Oct 10, 2019

On October 10, 2019, the UK Financial Reporting Council (FRC) published three thematic reviews to help companies improve the quality of their corporate reporting in relation to IFRS 9 "Financial Instruments", IFRS 15 "Revenue from Contracts with Customers" and the impairment of non-financial assets.

The reports analyze the disclosures in a sample of companies’ reports and provide examples of better practice.

The FRC concluded that IFRS 15 disclosures could be improved especially with respect to

  • improving the descriptions of accounting policies and ensuring that these are tailored to their own particular circumstances; and
  • providing more detailed information about the judgements significantly affecting the amount and timing of revenue.

In connection with IFRS 9 the FRC found that there was still room for companies to improve disclosures by

  • analysing the credit quality of trade receivables by non-banking companies; and
  • providing details of the indicators of a significant increase in credit risk particularly by the smaller banks.

As regards IAS 36 and the impairment of non-financial assets, the FRC encourage companies to pay greater attention to:

  • providing relevant information around significant judgements and key assumptions made in estimating the recoverable amount of assets and cash-generating units;
  • explaining the sensitivity to changes in key assumptions, where reasonably possible changes could give rise to impairment of goodwill or material further adjustments to already-impaired assets. 

Review the following additional information on the FRC's website:


IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

IESBA Meeting Highlights September 16-19, 2019

Oct 08, 2019

On October 8, 2019, the International Ethics Standards Board for Accountants (IESBA) released the highlights of its September 16-19, 2019 meeting.

Discussion points included:

  • Highlights & Key Developments
  • Alignment of Part 4B with ISAE 3000
  • Non-Assurance Services
  • Fees
  • Technology

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

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AASB response – Audits of less complex entities

Oct 04, 2019

On October 4, 2019, the International Auditing and Assurance Standards Board (IAASB) published the Auditing and Assurance Standards Board's (AASB) comment letter responding to the IAASB’s Discussion Paper, Audits of Less Complex Entities: Exploring Possible Options to Address the Challenges of Applying the ISAs.

Overall, the AASB is very supportive of the IAASB’s efforts to obtain a greater understanding of the challenges that practitioners encounter in applying the ISAs in a scalable and proportionate manner.

The challenges in applying the ISAs require a solution that focuses on the complexity of the elements of an entity’s operations and financial statements rather than on the complexity of the entity. Therefore, the AASB believes that the most effective solution is to address within each ISA the ability to scale or modify requirements for the less complex elements of an entity’s operations and financial statements. Also, the solution needs to be practical and achievable in a reasonable timeframe.

However, the AASB does not believe that the development of a separate auditing standard for LCEs based on the ISAs is an appropriate solution.

Review the comment letter on the IAASB’s website.

CPAB - Assurance Image

CPAB releases 2019 fall inspections results

Oct 03, 2019

On October 3, 2019, the Canadian Public Accountability Board (CPAB) released its "Audit Quality Insights Report: 2019 Fall Inspections Results".

CPAB has inspected 66 of 72 audit engagement files that will be reviewed by the end of 2019 across the four firms. To date, we have identified significant findings (deficiencies in the application of generally accepted auditing standards that could result in a restatement of the company’s financials) in 12 of those files. The total number of inspection findings to date is lower than 2018.

Most of these findings required the firm to carry out additional audit procedures to determine the need, if any, to restate the financial statements due to material error. The remaining findings required firms to add evidence to the audit file to show they had obtained sufficient and appropriate audit evidence with respect to a major balance sheet item or transaction stream.

CPAB expects firms to remediate file deficiencies before their reporting issuer’s next quarterly report. Where a restatement is required, the firm works with the reporting issuer and securities legal counsel to issue the restatement as soon as possible. No restatements have been required to date.

Review the report on CPAB's website.

Securities - CSA Image

Canadian securities regulators propose changes to auditor oversight rules

Oct 03, 2019

On October 3, 2019, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 52-108 "Auditor Oversight" (The Notice) intended to provide the Canadian Public Accountability Board (CPAB) with improved ability to perform audit inspections. Under the proposed changes, some reporting issuers and audit firms may be required to take steps to provide CPAB with enhanced access to audit working papers, particularly in foreign jurisdictions. Comments are requested by January 2, 2020.

Under the proposed new securities requirements, reporting issuers will be required to direct audit firms who are not subject to CPAB oversight, but complete a significant portion of audit work for a reporting issuer’s audit, to enter into an agreement with CPAB to access their files and inspect their work if such firms are not prepared to provide access to CPAB voluntarily upon request.

Known as component auditors, these audit firms complete some of the work that forms part of the evidence used to support an audit opinion. To assess whether sufficient audit evidence has been obtained to support an audit opinion, CPAB has determined it must be able to review all substantial audit work.

Review the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website.

PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

"Keep Calm and Carry On": The role of regulators in cybersecurity and resiliency

Oct 03, 2019

On October 3, 2019, the Public Company Accounting Oversight Board (PCAOB) published a speech by Kathleen M. Hamm, PCAOB Board Member, where she shares her views on a topic that intertwines both technology and capital market regulation: cybersecurity, resiliency, and the role of financial regulators.

In her speech, she discusses the following:

  • Nature of cyber threats
  • Framework for effective responses
  • Levers of financial regulators
  • Baseline protections and best practices
  • Response and recovery

Review the full speech on the PCAOB's website.

Securities - CSA Image

Canadian securities regulators release data regarding women on boards and in executive officer positions

Oct 02, 2019

On October 2, 2019, the securities regulatory authorities in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published CSA Multilateral Staff Notice 58-311 "Report on Fifth Staff Review of Disclosure Regarding Women on Boards and in Executive Officer Positions".

Key trends from this year’s review include:

  • The total number of board seats occupied by women increased to 17 per cent in 2019, compared to 11 per cent in 2015.
  • Seventy-three per cent of issuers had at least one woman on their board, an increase from 49 per cent in 2015.
  • When board vacancies were filled, a third of those positions were filled by women.
  • Five per cent of issuers had a female chair of their board.
  • Half of issuers adopted a policy relating to the representation of women on their board, representing a significant increase since 2015.

Review the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website.


Updated IASB work plan — Analysis

Oct 01, 2019

On October 1, 2019, the International Accounting Standards Board (the Board) updated its work plan following its September 2019 meeting.

Below is an analysis of all changes that were made to the work plan since our last analysis on September 3, 2019.

Standard-setting projects

  • No changes

Maintenance projects

Research projects

  • SME Implementation Group draft Q&A — project has disappeared from the work plan
  • Extractive activities — the review of research is now expected in the first half of 2020 (previously fourth quarter of 2019)
  • Goodwill and impairment — a discussion paper is now expected in the first quarter of 2020 (previously fourth quarter of 2019)

Other projects

  • 2020 Agenda Consultation — newly added to the work plan, a request for information is expected in the first half of 2020
  • IFRS Taxonomy Update — Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) — newly added to the work plan, a proposed IFRS Taxonomy Update is expected in October 2019

The revised IASB work plan is available on the Board's website.


IASB Chairman opens WSS meeting

Sep 30, 2019

On September 30, 2019, the International Accounting Standards Board (IASB) released the opening remarks of IASB Chairman Hans Hoogervorst delivered at the World Standard-Setters (WSS) meeting held in London.

The focus of Mr. Hoogervorst's speech was the IASB's work programme for 2020, which will see three exposure drafts, two discussion papers, and three requests for views.

On individual projects, Mr. Hoogervorst spoke about

  • Primary financial statements. The IASB plans to publish an exposure draft at the end of 2019. The IASB is looking at introducing new subtotals in the income statement, is looking at improving discipline around management performance measures, and wants to improve disaggregation.
  • Goodwill and impairment. The IASB plans to publish a discussion paper in February 2020. While the IASB feels that the impairment model is not great, they are not sure whether any of the alternatives are better. By publishing a discussion paper, the IASB is hoping for new evidence and insights.
  • Rate-regulated activities. The IASB will publish an exposure draft in the first half of 2020. The IASB has developed an accounting model that will improve the information to investors about what rights and obligations a company has and is looking for feedback whether they have got the model right.

The IASB is also going to consult on a revised Management Commentary Practice Statement, on proposals on business combinations under common control, on whether the IFRS for SMEs should be updated to reflect changes in full IFRSs, and on the future agenda of the IASB.

Review the full transcript of Mr. Hoogervorst's speech on the IASB's website.

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