Issue No 37/2006 - ANT37
27 September 2006
HEADLINES
- Early ANT edition this week
- Next AASB meeting
- September AUASB meeting highlights
- IFRIC meeting update - September 2006
- ASIC Chairman inaugural Chairman of IFIAR
- Revised ASIC Policy Statement
- Query of the week - Applicability of "Force of law" Auditing Standards
Welcome to the thirty-seventh edition of Accounting & Auditing News Today for 2006. What follows is a brief update on changes and proposed changes in the financial reporting sphere.
1. Early ANT edition this week
Due to the launch of the new institute website ANT is arriving early this week. Consequently, no Institute website links can be included in this week's edition. The new website, charteredaccountants.com.au, is expected to go live at the end of September.
ANT will return to its normal Friday dispatch on Friday 6 October 2006.
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2. Next AASB Meeting
The next meeting of the AASB will be held on 4-5 October 2006 in Melbourne.
Items to be discussed include:- Conceptual Framework
- Sector Neutrality
- Presentation of Financial Statements
- Superannuation Plans
- Reporting Entity / SME
- Differences Between IFRSs and AIFRSs
- Review of Government Standards
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3. September AUASB meeting highlights
The highlights of the AUASB meeting on 4-5 September 2006 are now available on the AUASB website, http://www.auasb.gov.au. In addition to the withdrawal of the Action Alerts and Guidance Notes mentioned in Ant 34 8/9/06, other items discussed included:- Solicitors' representation letters and the impact of the recent "Westpac" case in relation to matters of legal privilege. The AUASB concluded that given the uncertainty that exists as a result of the decision in this case, it was not feasible to issue any further definitive guidance at this time. However the AUASB considered that auditors were generally able to perform other procedures to gain "sufficient appropriate audit evidence". They will continue to monitor the situation, including investigating the impact that legal professional privilege has on auditors obtaining solicitors letters in other countries.
- A revised draft of the addendum and proforma reports of AGS 1064 Audit of Prudential Requirements of General Insurers was considered and is expected to be approved at the next AUASB meeting in early October. The changes are in response to the revised APRA prudential standards.
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4. IFRIC meeting update - September 2006
IFRIC has now released the detailed meeting update from its meeting on September 7-8 2006.
The update includes details of the discussion and approval of new interpretations on;
- Service Concessions Arrangements (a revised single interpretation covering the proposals contained in IFRIC s D12-D4); and
- D17 - IFRS 2 Group and treasury share transactions.
Further details are available in ANT35: 15 September 2006, and the new Interpretations are to be referred to the IASB for approval.
Other items discussed included real estate sales and recognition of initial fees by fund managers in relation to IAS 18 and the treatment of catalogue and other advertising costs in accordance with IAS 38. The update also contains a list of other items submitted for consideration and the decisions of the agenda committee thereon.
For more details refer to the IASB website http://www.iasb.org.
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5. ASIC Chairman inaugural Chairman of IFIAR
Mr Jeffrey Lucy FCA, Chairman of the Australian Securities and Investments Commission (ASIC), and a past president of the Institute of Chartered Accountants in Australia, has been appointed as the inaugural Chairman of the International Forum of Independent Audit Regulators (IFIAR).
IFIAR has been established to foster the sharing of practical experiences in audit oversight, to help reduce inefficiencies and costs, and to promote best practice in the audit oversight function.
At a Roundtable meeting, the independent audit regulators of the following countries agreed to the creation of the Forum: Australia, Austria, Brazil, Canada, Denmark, France, Germany, Ireland, Italy, Japan, Mexico, The Netherlands, Norway, Singapore, South Africa, Spain, Sweden and the United Kingdom. The United States Public Company Accounting Oversight Board participated in the Roundtable meeting as an observer.
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6. Revised ASIC Policy Statement
ASIC has issued a revised policy statement Policy Statement [PS 51] Applications for Relief. The revised policy sets out how it uses its powers to reduce the burden on business. A product of ASIC's Better Regulation Initiatives, it updates and clarifies previous ASIC policy on how ASIC deals with requests to reduce regulatory burdens, what information applicants need to provide in order for ASIC to make a decision and what factors ASIC will take into account when making a decision.
The policy statement also encourages and provides details on lodging electronic applications, and on how ASIC will endeavour to provide early indications if it has concerns about a particular request.
ASIC also intends to provide further guidance on how to make an application for relief through developing templates. These are anticipated to be developed by 31 December 2006.
A copy of the policy document and the related ASIC media release are available for download at http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/348DA37A69380214CA2571E9001A5A4F?opendocument.
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7. Query of the week - Applicability of "Force of law" Auditing Standards
Q:Do the new "force of law" auditing standards (ASA's) have the force of law on all audit engagements?
A: The newly issued ASAs have the force of law by virtue of the Corporations Act, Section 307A - "the auditor ... must conduct the audit or review in accordance with the auditing standards". For entities that do not come within the scope of the Corporations Act, the applicability of auditing standards to members of the Institute and CPA Australia is set out in APES 410 at http://www.apesb.org.au/APES_410.pdf.
Note that compliance with the auditing standards is also required by section 989CA for full and half year audits of financial services licensees. Section 989CA is basically in the same terms as section 307A which applies for full and half year audits under Chapter 2M.
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Technical Query Service
The Institute's Technical Standards Team responds to inquiries from members on auditing and financial reporting issues. This service provides general assistance and guidance only. Members have the responsibility to apply their own professional judgment. The service can be contacted on (02) 9290 5702.
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