The purpose of the call is to seek the approval of the DPOC for a shortened comment period for the forthcoming exposure draft on the IBOR reform and its effects on financial reporting.

In addition, the DPOC will discuss a question on the review of the due process handbook and education material carried forward from the DPOC meeting in January.

Please click to access the agenda and the papers for the call on the IASB website.

The proposals have been made following a number of high profile corporate failures where the auditor’s report failed to highlight concerns about the prospects of entities which collapsed shortly after. Additionally findings of the FRC Enforcement cases have raised concerns about the quality of audit. The FRC indicates that in proposing these revisions, requirements on UK auditors will be significantly stronger than those required by international standards.

The consultation proposes:

• auditors make greater effort to more robustly challenge management’s assessment of going concern, thoroughly test the adequacy of the supporting evidence, evaluate the risk of management bias, and make greater use of the viability statement;
• improved transparency with a new reporting requirement for the auditor to provide a conclusion on whether management’s assessment is appropriate, and to set out the work they have done in this respect; and
• a stand back requirement to consider all of the evidence obtained, whether corroborative or contradictory, when the auditor draws their conclusions on going concern.

The press release and exposure draft are available on the FRC website. Comments are requested by 5pm on Friday 7 June 2019.

More in­for­ma­tion about the issues is set out below:

Click to access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Committee.

Meeting activities included the following:

• Executive session:
  • Report of the Executive Director — The Trustees received a report from the Executive Director Lee White on activities since the last meeting.
  • Strategy review — The Trustees discussed a global environment scan and considered the key strategic themes that now face the Foundation.
  • Governance issues — The Trustees reviewed and approved the business case for improvements to the Foundation’s business process and technology
  • Operations analysis — The Trustees received presentations on the work plan for the Asia-Oceania Office and on the Foundation’s People Strategy.
  • Future meetings — Trustees confirmed that their next meetings would be in Munich in June 2019, New York in October 2019, and Brussels in early 2020.
  • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Human Capital Committee, the Nominating Committee, and the DPOC. (A report of the DPOC meeting is attached to the meeting summary.)
• IASB Chairman’s report — The Chair of the IASB provided the Trustees with a general update on the IASB’s technical activities, especially on IFRS 17 and possible amendments to the standard, the IBOR reform, accounting for goodwill, and primary financial statements.
• Meetings in Kuala Lumpur — The Trustees met with members of the Asian-Oceanian Standard Setters Group and also discussed the work of the IFRS Foundation Advisory Council with its chair Joanna Perry. They also held a stakeholder dinner which was co-hosted by the Malaysian Accounting Standards Board.

The full report on the IFRS Foundation trustees’ and DPOC meeting is available on the IASB’s website.

The agenda for the meeting is sum­marised below:

For more information, see the agenda on the IASB's website.

The FCA highlights that failure to file interim accounts is the most common situation where dividends are paid out in a manner which infringes relevant company law.

The FCA highlights that in the last few years it has seen resolutions put to shareholders in general meetings seeking to rectify situations where dividends have been paid in such a manner.  These resolutions aim to put the company, its shareholders, directors and former directors in the position they would otherwise have been in had the interim accounts been filed.  When this approach is proposed, the FCA reminds premium listed issuers to also consider how to apply LR 11.

For more information see the FCA Primary Market Bulletin 20 on the FCA website.

Mr Hoogervorst began with a recap of the progress IFRS Standards have made globally with 144 jurisdiction which have adopted IFRS Standards. He mentioned that other jurisdictions, such as China, India, and Indonesia, have substantially converged their national accounting requirements with IFRS Standards and that the United States remains as the only large jurisdiction where adoption has stalled.

Next, he shared feedback on the big four Standards (IFRS 9, IFRS 15, IFRS 16, and IFRS 17) that have been issued and provided examples of how these Standards have benefited financial reporting.

Lastly, Mr Hoogervorst discussed the primary financial statements project, which he considers a ‘game changer’ since it provides an opportunity to improve the communications effectiveness of financial statements. He noted that:

Overall, our decisions thus far will create much more structure in the income statement and will definitely enhance comparability. The improved structure will make it much easier for users to find the components for the analysis that they prefer. The increased transparency around the adjustments that companies make in their non-GAAP measures will provide the investor with a lot of information about the underlying strategy of management.

For more information, see the transcript of the speech on the IASB’s website.

Applying the criteria for evaluating proposed amendments agreed on in October 2018, the staff asks the Board to consider the following recommendations:

The staff notes that after its March 2019 meeting, the Board will have considered all 25 topics identified in October 2018. At its April 2019 meeting, the Board plans to consider the package of amendments tentatively decided by the Board as a whole.

As part of its ongoing efforts to support report preparers as they adopt and advance integrated reporting in their organisation, the International Integrated Reporting Council (IIRC) has published the IIRC Practice Aid designed to help preparers navigate International <IR> Framework requirements. Please click to access the practice aid on the IIRC website.

The Global Reporting Initiative (GRI) and the United Nations Global Compact initiative have announced their continued partnership to develop best practices for corporate reporting on the Sustainable Development Goals (SDGs), empowering businesses to prioritize SDG targets and measure and report on progress. Please see the press release on the GRI website for more information.

The Social & Human Capital Coalition (SHCC) launched the Social & Human Capital Protocol. The protocol provides a consistent process to guide businesses as they assess their relationship with social and human capital. It offers an overarching framework for collaborative action to bring together different approaches for social and human capital measurement and valuation and is designed to be used alongside the Natural Capital Protocol to understand the full spectrum of business interactions with people, society and the environment. Please click for more information on the SHCC website.

The Corporate Governance Council of the Australian Securities Exchange (ASX) has published a revised Australian Corporate Governance Code, which references the role integrated reporting can play in providing investors with a broader range of information to inform their investment decisions. The Code also notes integrated reporting in the context of disclosure on environmental and social risks and how an entity plans to manage such risks. Please click to access the revised code on the ASX website.

The United Nation's Sustainable Stock Exchanges (SSE) initiative notes that the Toronto Stock Exchange (TSX) has become an SSE Partner Exchange. Please see the press release on the SSE website for more information.

The new video runs through a range of information about how to use the ESEF and IFRS taxonomies, map concepts from an issuers’ face financials to the base taxonomy, and the basics of the anchoring rules for extending the taxonomy to take account of company-specific concepts.

Please click to access the thirteeen minute video on YouTube.