Accounting and Auditing News Today (ANT) Issue No 29 - 27 July 2007

1. AASB differential reporting/SME round table

The Australian Accounting Standards Board (AASB) is seeking input from constituents on the differential reporting proposals and the International Accounting Standards Board's (IASB's) SME exposure draft contained in ITC 12. To gain this feedback it is holding 2 Roundtables in the offices of the Institute of Chartered Accountants in Melbourne and Sydney on 16 and 24 August respectively. The AASB intends to include the results of these forums in its consideration of submissions on ITC 12, due by 1 September 2007. This will enable it to prepare its submission to the IASB, due on 1 October 2007.

To direct the discussions the Board has published a paper identifying the key issues relating to both differential reporting and the IASB exposure draft on which it is seeking feedback. The paper is available here.

Interested members are encouraged to register to attend by contacting Lisa Coutter Lcoutter@aasb.com.au by 6 August 2007. Registration requires name, affiliation, contact details and an indication of whether you want discussion or observer status. There is a limit of one delegate and one observer per organisation.

The sessions will run from 9.30 - 1pm.
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2. AASB issues erratum to AASB 2007-4

Omnibus AASB 2007-4 was issued in April 2007 and made changes to a range of standards to align Australian requirements more closely with those of their IASB equivalents based on proposals in ED 151.

One notable change was the inclusion of the option to use proportional consolidation into AASB 131. Since AASB 2007-4 was issued in April the AASB has identified a number of standards that were affected by the inclusion of this option but which were not amended by AASB 2007-4. These additional consequential changes have been addressed by the issue of a new Erratum.

The Erratum amends the following standards and interpretations:

• AASB 101 Presentation of Financial Statements;
• AASB 107 Cash Flow Statements;
• AASB 121 The Effects of Changes in Foreign Exchange Rates;
• AASB 127 Consolidated and Separate Financial Statements; and
• Interpretation 113 Jointly Controlled Entities - Non-Monetary Contributions by Venturers.

3. AASB meeting agenda - 1-2 August 2007

1. The next AASB meeting will be held in Melbourne on 1-2 August 2007. Issues to be discussed include:

• Insurance contracts
• Differential reporting and SME's (ITC 12)
• Forthcoming AASB interpretations
• Business combinations
• Superannuation consultation paper on consolidation of subsidiaries
• Revisions to AASB 101
• Extractive industries project update*
• Non exchange transactions

4. AUASB meeting agenda - 30-31 July 2007

The next meeting of the Auditing and Assurance Standards Board (AUASB) will be held in Melbourne on 30-31 July 2007. Agenda items include:

• GS 003 Audit Requirements for Australian Financial Services Licensees under The Corporations Act 2001 (Revision of AGS 1068)
• The Auditor's Use of the Actuary's Work in the Audit of a Financial Report
• Compliance Audits
• ASRE 2400 Standard on Review Engagements
• GAAP/GFS
• Framework for Pronouncements
• SME Audits
• Audit Implications of Prudential Reporting Requirements for General Insurers (Revision of AGS 1064)
• Service Organisations
• Investor Directed Portfolio Services (IDPS)
• Formal Withdrawal of AUSs
• ASA Clarity Revisions
• Self Managed Superannuation Fund (SMSF) Audits

5. IASB call for volunteers to field-test SME ED

The IASB has called for SMEs to volunteer to field-test the proposed IFRS for SMEs. Details of what is planned can be found on the IASB website and the closing date for submitting the field test questionnaires is 31 October 2007.
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6. IFRIC Update available

The IFRIC Update which reports on the latest meeting held on July 12 is now available.

The meeting welcomed 4 new members and commenced its deliberations on the accounting treatments for customer contributions (IAS 18) and demergers and other inspecie distributions (IAS 27). IFRIC deferred decisions on several issues relating to IAS 39, particularly in relation to the definition of economic environment when a choice of currency is involved and the application of the fair value option. IFRIC is also considering proposals to suggest to the IASB that amendments be made to IFRS 2 re group cash settled share based payment transactions.

For further details and more information on draft and final items not taken to the agenda click here.
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7. Institute email addresses changing

The Institute's website has been http://www.charteredaccountants.com.au for a few months and our email addresses are now changing to match. Generally email addresses follow the format Firstname.Surname@charteredaccountants.com.au.

The new address for our email members helpline will become technicalsecretary@charteredaccountants.com.au.

Existing email addresses will forward automatically for the time being.
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8. IFAC releases draft management accounting guidance

The Professional Accountants in Business (PAIB) committee of the International Federation of Accountants (IFAC) is seeking comments on a proposed new "Preface to IFAC's International Management Accounting Statements and International Good Practice Guidance" http://www.ifac.org/Guidance/EXD-Details.php?EDID=0082

The Preface sets out the objective, scope and due process of two new types of benchmark guidance:

• International Management Accounting Statements
• International Good Practice Guidance

Comments for the proposed Preface and International Management Accounting Statement are requested by 12 September 2007 through email to edcomments@ifac.org.
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9. IESBA's proposed strategic plan

IESBA's proposed strategic plan The International Ethics Standards Board for Accountants (IESBA), of the International Federation of Accountants (IFAC) is seeking comment on an exposure draft (ED) of its Strategic and Operational Plan for the period 2008-2009 by 31 August 2007. Comments can be submitted to edcomments@ifac.org .

The media release is available at http://www.ifac.org/News/LastestReleases.tmpl?NID=11843601962301443.
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10. Additional international proposals for auditor independence

The IESBA has issued an ED proposing to strengthen three components of the independence requirements contained in the IFAC Code of Ethics for Professional Accountants. The ED contains three areas on which comments are sought:

• Provision of internal audit services to an audit client;
• Independence implications related to the relative size of fees received from one assurance client; and
• Contingent fees for services provided to assurance clients

11. Query of the week - what tech standards can do for you

Q. I've never used the Institute's technical enquiry service before. Can you explain what services you provide?

A. The technical standards team provides a telephone and email enquiry service to assist our members on financial reporting and auditing issues. As the level of member enquiries continues to grow we outline below the nature of the service we are able to provide.

What we can do
This free service aims to assist our members to access the technical resources they need in the areas of financial reporting, auditing and the Corporations Act.

Our consultants are experienced professionals and therefore are able to talk through the requirements of specific standards and point members to the availability of other resources that may assist them to ensure that their professional judgment on a topic is informed.

Where possible members should have discussed their query with senior finance personnel in their organisation and their auditors (if any) prior to contacting our service.

...and what we can't do
The technical enquiry service does not provide opinions on the application of requirements to specific issues that involve professional judgment. Consequently, the staff of our enquiry service cannot make subjective judgments for members on accounting treatments applied to specific facts or act as an arbitrator on any issue (for example, a dispute between a company and its auditor).

Where an opinion is required and members do not already have access to an appropriate member in practice the Institute can provide a list of members willing to provide such services for a fee.

The Institute is a member organisation and as such we will not ordinarily reply to any queries or requests for information from non-members.

Response times
The technical standards team's limited resources are not dedicated to the inquiry service and are also committed to the production of our ANT newsletter, Charter and the technical support of a range of other Institute services and activities. Consequently an instantaneous response to queries is generally not available although we will usually respond to your query within 3 working days.

Contact details
Our service can be contacted by phone on 02 92905702 or by email to technicalsecretary@charteredaccountants.com.au
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12. Training and development at the Institute

Auditor Independence Checklist
http://www.charteredaccountants.com.au/A118399654
As an Auditor are you interested in quickly validating the independence of each and every audit job? Updated with reference to the new components of the Corporations Act the Auditor Independence checklist is one again available to small to medium sized public firms.
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Outlined below are the comment closing dates for all current exposure drafts. Members are encouraged to prepare their own submission on each document and submit them to the Institute no later than one week before the closing date shown.

For more information, refer to the Institute's Technical Standards' exposure drafts web page

Forward all ED submission/comment emails to techsubmissions@icaa.org.au.

31 July 2007
ISA 250 (redrafted) 'The Auditor's Responsibilities Relating to Laws and Regulations in an Audit of Financial Statements'

3 August 2007
Treasury discussion paper - Financial reporting by unlisted companies
(see survey)

10 August 2007
APRA Prudential Standard APS 120 Securitisation

17 August 2007
AASB ED 155 "Financial Reporting by Whole of Governments
Supplement to ED 155

31 August 2007
APES ED 03/07 "Proposed Amendment to Network Firms in Section 290: Independence - Assurance Engagements of APES 110 Code of Ethics for Professional Accountants"

1 September 2007
AASB SME ITC "A Proposed Revised Differential Reporting Regime for Australia and the IASB Exposure Draft of a Proposed IFRS for Small and Medium-sized Entities"

3 September 2007
AASB ED 156 "Proposals Arising from the Short-term Review of the Requirements in AAS 27, 29 and 31"

12 September 2007
PAIB (IFAC) "Preface to IFAC's International Management Accounting Statements and International Good Practice Guidance"

14 September 2007
APES ED 04/07 "Terms of Engagement"

15 September 2007
ISA 200 (revised and redrafted) 'Overall Objective of the Independent Auditor, and the Conduct of an Audit in accordance with International Standards on auditing'
ISA 500 (redrafted) 'Considering the Relevance and Reliability of Audit Evidence'

5 October 2007
IFRIC D21 'Real Estate Sales'

26 October 2007
AASB ITC 13 'Preliminary Views on Insurance Contracts'

31 October 2007
IASB proposed IFRS for SMEs field test questionnaires

16 November 2007
IASB Discussion Paper "Preliminary Views on Insurance Contracts"

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.

Do you know someone interested in receiving ANT?
We welcome new subscriptions. To subscribe, unsubscribe or to update your mailing details, please visit http://www.charteredaccountants.com.au/enewsletters/enewsletters

More information is available at our website.

TECHNICAL/XFILES/ARTICLES/ANT/ANT29_07_07_27.doc. The Technical Standards team comprises, Jeanette Dawes CA, Roslyn Hatton CA, Stephanie Kemp CA, Claire Locke CA, Andrew Stringer; Benjamin Lau and Jane Ma - Technical Standards Assistants.