This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.


SEC issues final rule on IFRS reconciliation

28 Dec 2007

The US Securities and Exchange Commission has issued its final rule on Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with International Financial Reporting Standards without Reconciliation to US GAAP.

The rule includes amendments to Form 20-F, conforming changes to Regulation S-X, and conforming amendments to other regulations, forms, and rules under US securities laws. The rule notes that the SEC continues to require the reconciliation for a foreign private issuer that files its financial statements with the Commission using a basis of accounting other than IFRS as issued by the IASB, with one exception. The exception relates to foreign private issuers that use the version of IFRSs that includes the European Commission's 'carve-out' for IAS 39. Such issuers will be allowed to use that version in preparing their financial statements for a two-year period as long as a reconciliation to the IASB's version of IFRSs is provided. After the two-year period, those issuers will either have to use the IASB's version of IFRSs or provide a reconciliation to US GAAP. The new rule is effective 4 March 2008. Click to download SEC's Final Rule Release (PDF 690k).


Speeches at AICPA's annual SEC and PCAOB conference

27 Dec 2007

The American Institute of CPAs held its 35th Annual National Conference on Current SEC and PCAOB Developments in Washington on 10-12 December 2007. On 11 December, we posted links to some of the presentations at the conference.

We indicated that we would add to this list as additional presentations are made publicly available, which we have been doing. The SEC continues to release its staff presentations, including four yesterday. We have added these to our List of Presentations.


Statistics database on cross-border securities updated

27 Dec 2007

We have updated our Database of Statistics that, we believe, provide clear evidence of the globalisation of the world's capital markets and of the need for global financial reporting standards.

The latest updates reflect December 2007 or 30 November 2007 data on the number of non-US companies listed on member exchanges of the World Federation of Exchanges and details of cross-border listings on the New York Stock Exchange, NASDAQ, and the London Stock Exchange. There is also some data on cross-border lending and on accounting standards used by companies listed on the Deutsche Börse, as well as foreign companies registered with the US SEC.

2007 IFRS financial statements and checklist in German

26 Dec 2007

Deloitte (Germany) has published the German language versions of Deloitte's 2007 IFRS Model financial Statements (IFRS-Musterkonzernabschluss 2007) and 2007 IFRS Presentation and Disclosure Checklist (IFRS-Checkliste zu Ausweis- und Angabevorschriften 2007).

Five proposed IAASB Standards

25 Dec 2007

The International Auditing and Assurance Standards Board (IAASB) has published for comment three proposed new standards.

Two focus on enhancing the auditor's consideration of controls at service organizations, and the third addresses the communication of deficiencies in internal control to those charged with governance. The IAASB has also invited comment on two exposure drafts of International Standards on Auditing (ISA) that were revised and redrafted in accordance with the new clarity drafting conventions.

Proposed new standards:

  • Proposed ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Third Party Service Organization. Addresses the auditor's responsibilities to obtain audit evidence when an entity uses one or more service organizations. This may include obtaining reports prepared by the auditors of those organizations. Comments due 30 April 2008.
  • Proposed International Standard on Assurance Engagements (ISAE) 3402 Assurance Reports on Controls at a Third Party Service Organization. Complements proposed ISA 402 (Revised and Redrafted) in that reports prepared in accordance with proposed ISAE 3402 will be capable of providing appropriate audit evidence under the proposed ISA. It is intended to ensure that reports issued in one country are likely to meet the requirements of the auditors of user entities in other countries. Comments due 31 May 2008.
  • Proposed ISA 265 Communicating Deficiencies in Internal Control. Deals with the auditor's responsibility to communicate to management and those charged with governance deficiencies in internal control that have been identified by the auditor. Comments due 30 April 2008.
New clarity exposure drafts:
  • ISA 501 (Redrafted) Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures. Comments due 31 March 2008.
  • ISA 520 (Redrafted) Analytical Procedures. Comments due 31 March 2008.
The exposure drafts may be downloaded without charge from Here is the Press Release (PDF 109k).


Commissioner updates EU Parliament on accounting matters

24 Dec 2007

In a presentation to the European Parliament's Economic and Monetary Committee in Brussels, EU Commissioner for Internal Markets and Services Charlie McCreevy updated the committee on four topics – the EU-US regulatory dialogue, financial turmoil, single market, Single European Payments Area (SEPA).

The first topic included an update on accounting matters (below). Click to download Commissioner McCreevy's Presentation (PDF 92k).


On November 15, the US Securities and Exchange Commission took the major decision to allow foreign issuers to file accounts under IFRS without reconciliation to US standards. We have always wanted this. All EU companies listed in the US will benefit. One estimate puts the savings at €2.5bn – and this just for EU companies. This is clear evidence of the benefits of international regulatory dialogues! We must continually make sure that new standards reflect the real needs of stakeholders. We need to continue to press for improvements in the IASB standard setting process. To avoid unwanted or even unexpected consequences. That means more transparency. Better consultations. Impact analysis at an early stage. Thorough field-testing of any new standards. And rigorous management. We need standards only when they are necessary.

We also need to strengthen further the public accountability of the IASB. That is why last month we issued a statement together with the US SEC, the Japanese Financial Services Authority and IOSCO on key issues where action is needed.

Next year it will be the EU's turn to take the decision to accept US GAAP – and other well developed third country GAAPs. We are working hard together with European securities regulators to determine whether those GAAPs are equivalent to IFRS. We will make a serious and balanced decision – taking into account the competitiveness and attractiveness of our capital markets. As regulators we must help financial markets to function as friction-free as possible.


US GAAP XBRL taxonomy is released for comment

22 Dec 2007

XBRL US Inc. has publshed 'Beta release 1.0' of the XBRL US GAAP Taxonomies and Documentation for a four month comment period ending 4 April 2008.

The XBRL US GAAP Taxonomies are collections of financial reporting concepts that companies will use to report their financial statements in XBRL. Each financial reporting concept in the Taxonomy is an element or 'tag'. Elements in the taxonomy cover all US GAAP reporting requirements for both the primary financial statements (for example, the balance sheet) and the notes to the financial statements. Additionally, the Taxonomy provides elements that cover common financial reporting practices. A preparer's guide is available online or for download. Click for More Information on the XBRL US Website.


Heads Up on FASB's proposed definition of equity

22 Dec 2007

We have posted the 21 December 2007 edition of the Heads Up Newsletter from Deloitte & Touche LLP (United States).

On 30 November 2007, the FASB issued for public comment a Preliminary Views document on how to distinguish liabilities from equity. If adopted, these Preliminary Views could radically change how contracts are classified either as liabilities or assets or as equity. Under what FASB calls the basic ownership approach, only the most subordinated class of common stock will qualify as equity. Other contracts currently classified as equity (such as preferred stock and certain option and forward contracts on an entity's own equity) would instead be classified as liabilities (or, in some cases, assets). This Heads Up discusses the FASB's Preliminary Views, their application to some common contracts, and how they compare with current accounting requirements. Interested parties should provide comments to the FASB by 30 May 2008. The IASB expects to issue a Discussion Paper in the first quarter of 2008 inviting comments on FASB's Preliminary Views.
Click to view Heads Up newsletter (PDF 141k).


European Commission proposals on statutory audits

21 Dec 2007

Charlie McCreevy, the EU Commissioner for Internal Market and Services, has released details of Planned Revisions to the Statutory Audit Requirements in the European Union.

The existing Statutory Audit Directive, also known as the 8th Company Law Directive, was adopted in May 2006. It sets out a framework of principles that Member States are required to implement into their national legislation by 29 June 2008. It also envisages that the European Union will continue to focus on some specific policy areas, such as auditor liability, International Standards on Auditing, inspections of audit firms, and relations with third (non-EU) countries.

Commissioner McCreevy announced his plans regarding the 8th Directive in six areas:

  • Auditor liability. Recommendation in first quarter 2008 asking Member States to limit auditor liability. Each Member State would decide the means by which liability is limited – for instance, a liability cap, proportionate liability, or contractual arrangements between the auditor and the audited firm. Liability would not be limited in cases involving wilful misconduct by auditors.
  • Restrictions on ownership of audit firms. Public consultation will be launched in the first quarter of 2008.
  • Audit quality and inspections. Independent inspections of audit firms that audit listed companies are needed. However, before this could be required, more independent inspectors with sufficient expertise are needed. Meanwhile, the EU should give more responsibilities to the public oversight bodies and, for a transitional period, allow professional bodies and practitioners to take part in the inspection process, with a limited role under the supervision of independent inspectors.
  • Implementation of the Statutory Audit Directive. Publish a 'scoreboard' in Spring 2008 showing where Member States stand in implementing the 8th Directive, particularly as regards the establishment of independent public auditor oversight.
  • International Standards on Auditing (ISAs). Article 26 of the Statutory Audit Directive allows the Commission to make ISAs mandatory for the European Union. However, the Commissioner's intention is not to make a decision on ISAs at this stage but to look at this issue again towards the end of 2008 – following completion of the IAASB's Clarity Project and studies that the EU will undertake.
  • Co-operation with 'third countries'. Under the 8th Directive, Member States are required to register all auditors from outside the EU that audit companies listed in EU markets and to subject them to their systems for overseeing domestic audit firms. However, the Directive allows Member States to exempt auditors from non-EU countries whose oversight system is considered equivalent to the EU system. In January 2008, Commissioner McCreevy will propose transitional measures to allow audit firms from such non-EU countries to continue without registration until 1 January 2011. By then, the EU will complete equivalency assessments of these non-EU oversight systems.

Click to view Planned Revisions to the Statutory Audit Requirements (PDF 80k).

Three revised International Standards on Auditing

21 Dec 2007

The International Auditing and Assurance Standards Board (IAASB) has issued three final International Standards on Auditing (ISAs) that reflect its new clarity drafting conventions.

Click for Press Release (PDF 45k), which has summaries of the three new ISAs and also a hyperlink to the IAASB's website where you can download the ISAs without charge. The new ISAs are:
  • ISA 230 (Redrafted) Audit Documentation
  • ISA 260 (Revised and Redrafted) Communication with Those Charged with Governance
  • ISA 720 (Redrafted) The Auditor's Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements
The IAASB has been redrafting all of its existing standards and developing new and revised standards following 'clarity drafting conventions'. The complete set of revised and clarified ISAs will be effective for audits of financial statements for periods beginning on or after 15 December 2009. The IAASB is releasing standards as they are approved to provide standard setters, regulators, and auditors with sufficient time to plan for the adoption and implementation of the standards.


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.