News

SEC (US Securities and Exchange Commission) Image

SEC Chair warns about “AI Washing” again

Feb 13, 2024

On February 13, 2024, the Securities and Exchange Commission’s (SEC) Chair Gary Gensler delivered a speech at Yale Law School addressing various aspects of artificial intelligence (AI). He focused mainly on the issue of "AI washing” wherein companies mislead investors about their utilization of AI and associated risks.

Similar to his speech delivered in December 2023, Gensler once again highlighted the SEC's role in ensuring transparency and preventing fraud in AI-related disclosures, emphasizing the need for companies to provide accurate information about their AI usage and associated risks to investors.

Moreover, Gensler discussed the broader implications of AI in finance, highlighting its potential benefits in efficiency and user experience, as well as its challenges such as unexplainable decisions, biases, and inaccuracies. He warned against the systemic risks posed by the widespread adoption of AI models in financial institutions, citing concerns about herding behavior and network interconnectedness. He also stressed about the importance of accountability and responsible governance in deploying AI models, urging companies to implement appropriate safeguards and disclose material risks to investors.

Access Gary Gensler’s speech on the SEC’s website

IAASB - Assurance Image

IAASB proposes strengthening of audit standard related to fraud

Feb 06, 2024

On February 6, 2024, the International Auditing and Assurance Standards Board (IAASB) proposed a significant strengthening of its standard on auditors’ responsibilities relating to fraud.

The proposed revisions define the expectations in relation to fraud, delineate more robust procedures, and increase transparency about the auditors’ responsibilities and fraud-related procedures in the auditor’s report.

Key Changes in the Proposed Revisions include:

  • Clarified auditor responsibilities relating to fraud in an audit.
  • Emphasized professional skepticism to ensure auditors remain alert to possible fraud and exercise professional skepticism throughout an audit.
  • Strengthened identification and assessment of risks of material misstatement due to fraud.
  • Clarified response to fraud or suspected fraud identified during the audit.
  • Increased ongoing communication with management and those charged with governance about fraud.
  • Increased transparency about auditors’ responsibilities and fraud-related procedures in the auditor’s report.
  • Enhanced audit documentation requirements about fraud-related procedures.

Respondents are encouraged to share their insights using the response template by June 5, 2024.

Access the exposure draft and response template on IAASB’s website.

SEC (US Securities and Exchange Commission) Image

SEC Chief Accountant releases statement on Audit Quality

Feb 05, 2024

On February 05, 2024, the Securities and Exchange Commission’s (SEC) Chief Accountant Paul Munter released a statement on how auditors and audit committees must focus on audit quality to protect investors.

Mr. Munter expressed concerns over the Public Company Accounting Oversight Board's (PCAOB) recent inspection findings. He highlighted a troubling increase in deficiencies, particularly regarding insufficient audit evidence, rising from 29% in 2020 to 40% in 2021 inspections. This trend, Mr. Munter emphasized, necessitates renewed commitment from the entire auditing profession to ensure investor protection.

He reminded auditors of their fundamental responsibility to investors, requiring objective judgment, rigorous skepticism, and prioritizing investor interests throughout the audit process. While acknowledging the dedication of most auditors, Mr. Munter stressed the need for renewed focus on delivering high-quality audits in line with the profession's mission.

Access the statement on the SEC’s website

COSO Image

COSO and NACD issues Request for Proposal to develop Corporate Governance Framework

Jan 31, 2024

On January 31, 2024, the Committee of Sponsoring Organizations of the Treadway Commission (COSO), in collaboration with the National Association of Corporate Directors (NACD), issued a Request for Proposal (RFP) to develop a Corporate Governance Framework (CGF).

This framework would be designed to provide principles-based guidance for organizations of all sizes and types, helping them build effective governance practices. Both COSO and NACD recognize the increasing need for strong governance, as it plays a crucial role in shaping ethical business practices, ensuring stakeholder alignment, and driving long-term sustainability.

The CGF is intended to be used by:

  • public companies seeking to self-assess and enhance governance practices, and by start-up businesses desiring to build up their governance practices and processes;
  • private organizations seeking best practices or as part of readiness activities related to initial public offering efforts; and
  • external auditors, internal auditors, rating agencies, investors, listing agencies and/or regulators finding such a framework useful in assessing governance practices at related entities.

Organizations intending to respond to the RFP must provide a Notice of Intent to Respond by February 20, 2024.

Access the press release on the NACD’s website.

IFRS - IASB Image

IASB issues podcast on latest Board developments (January 2024)

Jan 30, 2024

On January 30, 2024, the IASB released a podcast hosted by Executive Technical Director Nili Shah featuring IASB Chair Andreas Barckow and IASB Vice-Chair Linda Mezon-Hutter discussing the deliberations at the January 2024 IASB meeting.

The podcast highlights some of the projects that were discussed during the meeting, including:

  • the post-implementation review of IFRS 15; 
  • power purchase agreements;
  • amendments to IFRS 9 regarding classification and measurement; and
  • proposals for the addendum to the IFRS for SMEs exposure draft.

It also addresses a question from one of the podcast listeners.

The podcast can be accessed here on the IFRS Foundation website

An analysis of changes to the work plan resulting from the IASB discussions can be found here.

ISSB Image

ISSB issues January 2024 podcast

Jan 30, 2024

On January 30, 2024, the IFRS Foundation released a podcast hosted by ISSB Chair Emmanuel Faber and Vice-Chair Sue Lloyd discussing the latest developments from the ISSB.

The podcast looks ahead to the ISSB’s three priorities for 2024:

  • Supporting the implementation of the ISSB Standards;
  • Working with jurisdictions on their adoption roadmaps; and
  • Finalising the ISSB’s two-year work plan.

It also discusses recent progress on technical work, including the discussion at the January 2024 joint IASB-ISSB meeting, for which a dedicated podcast has been released.

Access the press release on the IFRS Foundation website.

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ISSB Image

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

Jan 29, 2024

Following the IASB's and ISSB's January 2024 meetings, we have analysed 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 December 2023.

Below is an analysis of all changes made to the work plan since our last analysis on December 18, 2023

Standard-setting projects

Maintenance projects

  • test
    • test 2
  • Annual Improvements to IFRS Accounting Standards — Feedback discussions on the exposure draft of the following projects will now begin in February 2024 (previously Q1 2024):
    • Cost Method (Amendments to IAS 7)
    • Derecognition of Lease Liabilities (Amendments to IFRS 9)
    • Determination of a ‘De Facto Agent’ (Amendments to IFRS 10)
    • Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7)
    • Gain or Loss on Derecognition (Amendments to IFRS 7)
    • Hedge Accounting by a First-time Adopter (Amendments to IFRS 1)
    • Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7)
    • Transaction Price (Amendments to IFRS 9)
  • International applicability of the SASB standards— This project has been removed from the work plan since final amendments were published on December 19, 2023
  • Updating the 'Subsidiaries without public accountability: Disclosures' standard — An exposure draft is now expected in Q2 2024 (previously H1 2024)

Research projects

Other projects

The above is a faithful comparison of the IASB and ISSB work plan on December 18, 2023 and January 29, 2024.

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

Leaf - sustainability (green) Image

GRI publishes update to its biodiversity standard

Jan 25, 2024

On January 25, 2024, the Global Reporting Initiative (GRI) published ‘GRI 101: Biodiversity 2024’ which replaces ‘GRI 304: Biodiversity 2016’. The updated standard, effective from January 1, 2026, aims to assist entities in disclosing their significant impacts on biodiversity.

The revised GRI biodiversity standard delivers:

  • full transparency throughout the supply chain; 
  • location-specific reporting on impacts; 
  • new disclosures on the direct drivers of biodiversity loss; and 
  • requirements for reporting impacts on society.

It builds on the most important global biodiversity developments, such as the UN Kunming-Montreal Global Biodiversity Framework (GBF), the Science Based Target Network (SBTN) and the Taskforce on Nature-related Financial Disclosures (TNFD).

The GRI cooperated and liaised with the European Financial Reporting Advisory Group (EFRAG), which developed European Sustainability Reporting Standard (ESRS) 4 Biodiversity and ecosystems, and other key organizations in the biodiversity field to support global alignment of the revised standard.

Access the press release on GRI’s website.

IFRS - IASB Image
ISSB Image

IASB and ISSB emphasize connectivity in joint technical meeting

Jan 25, 2024

On January 25, 2024, the IASB and ISSB held their inaugural joint technical meeting in London. The meeting centered around feedback on the ISSB’s priorities for the next two years, focusing on potential projects for integrating financial and sustainability reporting.

The IFRS Foundation issued a special joint podcast episode where IASB Vice-Chair Linda Mezon-Hutter and ISSB Vice-Chair Sue Lloyd shared insights into the discussion.

Key topics included feedback on integration in reporting projects and enhancing connectivity between the two boards. The podcast also discussed the IASB’s management commentary project and the role of the Integrated Reporting Framework.

Access the press release on IFRS Foundation’s website.

Securities - CSA Image

CSA publishes proposed amendments to public crypto asset fund rules

Jan 19, 2024

On January 19, 2023, the Canadian Securities Administrators (CSA) published Notice and Request for Comment on Proposed Amendments to National Instrument 81-102 Investment Funds Pertaining to Crypto Assets. The Notice sets out a series of proposed amendments and changes to reporting issuer investment funds that seek to invest directly or indirectly in crypto assets (public crypto asset funds).

The primary objectives of the proposals are to provide greater regulatory clarity on permitted crypto asset investment activities, to prohibit the use of crypto assets in securities lending and (reverse) repurchase transactions and to confirm custodial expectations.

The most significant updates to the existing public crypto asset fund practices include:

  • explicit limitations on Non-Fungible Tokens ;
  • mandates for investing solely in crypto assets (or derivatives with crypto asset underliers) that are traded on recognized exchanges while continuing to allow purchases on crypto asset trading platforms;
  • requiring crypto custodians to obtain, and deliver to public crypto asset funds, SOC 2 Type 2-like reports

The Notice represents the second phase of the CSA’s ongoing effort to establish a comprehensive regulatory framework for public crypto asset funds in Canada. Following their initial guidance document (CSA Staff Notice 81-336 Guidance on Crypto Asset Investment Funds), these amendments aim to further clarify existing securities regulations and refine expectations for how such funds operate under National Instrument 81-102 Investment Funds.

Access the notice on Ontario Securities Commission’s website.

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