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Welcome to the thirty-fourth edition of Accounting & Assurance News Today for 2008. What follows is a brief update on
changes and proposed changes in the financial reporting and assurance sphere.
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| Issue 34
| 5 September 2008
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1. Draft submissions on IFAC PAIB International Good Practice Guide Papers
The Institute is preparing submissions on International Good Practice Guide exposure drafts recently issued by the International
Federation of Accountants (IFAC) ‘Professional Accountants in Business’ Committee.
The first is on Costing to Drive Organisational Performance and our main point relates to the need for the paper to guide
the practical application and specifically to enable the reader to choose the most appropriate costing methodology for their
situation as guided by the principles. The paper can be downloaded from the IFAC website.
The second is on Evaluating & Improving Governance in Organisations and our comments relate to the paper’s focus on
governance to create and optimise stakeholder value. However, we feel that governance is really a public interest matter and to
increase accountability and stakeholder confidence. This paper is also available on the IFAC website.
Member feedback is welcome, so please refer to the draft of our comments on the
Institute’s website. Submissions are due by Tuesday 23 September to IFAC.
2. Institute final submissions
The Institute and CPA Australia have prepared joint submissions on the proposed IASB/Financial Accounting Standards Board (FASB)
Conceptual Framework in response to AASB Exposure Draft (ED) 164 An improved Conceptual Framework for Financial Reporting: The
Objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting
Information and Invitation to Comment (ITC) 17 Request for Comment on IASB Discussion Paper Preliminary Views on an
improved Conceptual Framework for Financial Reporting: The Reporting Entity.
These final submissions can be viewed on the
Institute website .
As well, the Institute’s submission to the Senate Economics Committee’s (SEC) inquiry into disclosure regimes for charities and
not-for-profit organisations is now available for download from the. SEC
submissions page (submission 108).
3. Melbourne Corporate Reporting Discussion Group – 25 September 2008
The Institute is hosting the Melbourne Corporate Reporting Discussion Group meeting on Thursday, 25 September 2008 at its
Melbourne office at Level 3, Bourke Place, 600 Bourke Street, Melbourne.
The meeting will be chaired by Lincoln Tong, Group Financial Controller of Austock Group Limited. The guest speakers will be
David Barton, Senior Manager of Sustainability & Climate Change at PwC and Neil Perry, Chairman of Renewtek on the topic of
carbon emissions measurement and reporting implications for businesses.
David will provide the background and the current regulatory position, including the National Greenhouse and Energy Reporting Act
and The Carbon Pollution Reduction Scheme. David will talk about what assurance is required from the point of view of government,
investors and customers. David will also look at what do organisations need to do, including the challenges and the implications
for the accounting industry.
IT professional services firm Renewtek is an early adopter in many of its endeavours, including becoming the first Australian
professional services company to achieve a zero carbon footprint and the only company to have all of its operations carbon
neutral.
Renewtek’s Chairman, Neil Perry, will outline the business strategy to become carbon neutral and the actual process and steps of
achieving this status under the Australian Government’s Greenhouse Friendly program. His presentation will describe the business
processes implemented to capture the carbon information and the abatement program used to offset these emissions. Mr Perry will
also outline the business benefits of achieving ‘carbon neutral’ status.
The lunchtime meeting will begin at 12.30pm in Training Room 1 and conclude at 2:00pm. If you wish to attend this forum, members
can register online by Friday, 19 September
2008. If you have any questions regarding the forum, please email crdg@charteredaccountants.com.au.
4. What’s new in September Charter
This month’s Technical Focus section of Charter includes:
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Our regular roundup of financial reporting and assurance news in ‘The Panel’
- A review of the content of the International Accounting Standard Board’s (IASB) discussion paper on classifying liabilities
and equities, by Mandy Myers of Ernst & Young
- An article on communicating executive remuneration issues within the confines of AASB 2 Share-based payments, by Sarah
Inglis of KPMG
- An article by the Australian Securities and Investment Commission’s (ASIC) Chief Accountant Lee White about what ASIC and
leading audit committee chairs are focusing on in the current market conditions.
Other articles of interest to our audit and accounting readers include:
- From the Hill by Barbara Carne on the makeup of the new Senate and what this means for the Institute’s lobbying
efforts (page 54)
- Networks and Audit Conflicts by Louisa Thomson, which quotes our Head of Audit – Andrew Stringer (pages 52-53)
- Rating the Ratings Agencies by Tony Malkovic, which quotes our Head of Reporting – Kerry Hicks (pages 22-24)
5. IFRS for private entities live webcast
In March this year, the IASB began redeliberating its exposure draft on an International Financial Reporting Standard (IFRS) for Private Entities. Six months on,
Paul Pacter (IASB Director of Standards for Private Entities) will provide an update on the progress of redeliberations and
present an overview of the outstanding issues.
The live Web presentation – to be held on 10 September 2008 (at 10am and 3pm, GMT +1) – will have an accompanying Q&A session
where participants can submit questions online.
Issues that Paul will address include:
- Rationale for having an IFRS for Private Entities
- What the IASB has proposed
- Key issues arising from comment letters and field tests
- Outstanding work
- International Accounting Standards Committee (IASC) Foundation’s role in implementation
Attendance is free, but registration is required. For registration details, see the IASB website.
6. IASB Expert Advisory Panel meeting summaries
As referred to in ANT29/2008, item 8, the IASB in May formed an Expert Advisory Panel in response to the recommendations given
by the Financial Stability Forum. The meeting summaries for the August panel meetings are now available on the IASB
website. There was a particular focus on disclosure issues, especially relating to valuation techniques.
7. IASC Foundation publishes XBRL Taxonomy guide
The International Accounting Standards Committee (IASC) Foundation has released the IFRS Taxonomy Guide 1.00 - All you need to
know about the IFRS Taxonomy as a preparer, supervisor, software developer.
This guide address both the accounting and technological aspects of the IFRS Taxonomy and aims to assist in its implementation,
application and further application.
The IFRS Taxonomy Guide is available for download from the IFRS Taxonomy support materials
website.
Auditing & Assurance News | |
8. AUASB releases standards on review engagements
The Auditing and Assurance Standards Board (AUASB) has released two new standards on review engagements:
- ASRE 2400 Review of a Financial Report Performed by an Assurance Practitioner Who is Not the Auditor of the Entity
- ASRE 2405 Review of Historical Financial Information Other than a Financial Report
With the issuance of the above two standards, the AUASB has completed its revision of the suite of Standards relating to review
engagements of historical financial information.
ASRE 2400 is developed for use by an assurance practitioner who is not the auditor of the entity and is directed towards the
review of a financial report comprising historical financial information. ASRE 2405 addresses the remaining issue of the review
of historical financial information that is not in the form of a financial report prepared in accordance with a financial
reporting framework designed for fair presentation.
The meeting agenda can be downloaded from the AUASB
website.
9. AUASB meeting agenda – 9 September 2008
The next meeting of the AUASB will be held on 9 September 2008 in Melbourne. Items to be discussed include:
- ASAE 3100 Compliance Engagements
- GS 009 Financial and Compliance Audits of Self Managed Superannuation Funds
- AGS 1008 Audit Implications of Prudential Reporting Requirements for Authorised Deposit Taking Institutions
- IAASB matters
- ASA redrafting (clarity project)
- Standard Business Reporting and XBRL
The meeting agenda can be downloaded from the AUASB website.
10. ASIC releases guidance for unlisted mortgage and property schemes
ASIC has released regulatory guides targeted at improving disclosure to retail investors by unlisted mortgage schemes and
property schemes. Companion investor guides have been produced for both sectors to help investors better understand the enhanced
disclosure, which will equip them to make more informed investment decisions.
Accompanying these regulatory guides are:
- A report detailing the submissions received by ASIC on their work in improving disclosure for unlisted property-related
retail investments
- A Regulation Impact Statement demonstrating that the benefits outweigh the costs of compliance in this exercise
For further background information and to download the guides along with the accompanying reports, see the ASIC webpage.
11. ASIC further clarifies guidance for unlisted and unrated debentures
ASIC has also released an updated version of Regulatory Guide 69:
Debentures – improving disclosure for retail investors.
The original guide, which was released in October 2007, outlined a series of benchmarks that debentures should disclose against,
on an “if not, why not” basis. These benchmarks were designed to ensure that retail investors were fully informed of the risks
associated with debentures. Since then, ASIC has consulted various stakeholders to ensure that these benchmarks are understood –
and in the process, they have been able to refine and clarify some parts of the guide.
For further information and to download the guide, see the ASIC website.
12. Government moves towards creeping acquisitions law
Chris Bowen MP, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, has released a discussion paper for
public comment on the best way to proceed with a creeping acquisitions law. ‘Creeping acquisitions’ refer to a series of
acquisitions of smaller competitors which, when considered individually, do not have a significant impact upon competition – but
when taken collectively, can have a significant impact.
The Government’s move is a first step towards legislative reform of this gap in the Trade Practices Act which, at present, is
lacking in its mergers and acquisitions provisions to allow the Australian Competition and Consumer Commission (ACCC) to properly
address incremental acquisitions.
The discussion paper is viewable online on the Treasury website. Submissions are open until Friday 10 October 2008 and can be lodged electronically, by
post, or facsimile.
AASB 7
Q: How do I find out what constitutes a financial asset or a financial liability, for the purposes of AASB 7? The standard
seems to go straight into the disclosure requirements without giving definitions.
A: The definitions of "financial asset" and "financial liability" can be found in AASB 132 Financial Instruments:
Presentation, in paragraph 11. Further commentary is given in the Application Guidance at the back of AASB 132.
For more information on applying AASB 7, go to the Institute website.
Listed below are the notable upcoming open domestic and international accounting and assurance exposure drafts. Members are
encouraged to prepare their own submission on each document and submit them to the Institute (techsubmissions@charteredaccountants.com.au) no later than one
week before the closing date shown.
5 September 2008
IASB Discussion Paper on Financial Instruments with Characteristics of Equity
19 September 2008
IASB Discussion Paper on Reducing Complexity in Reporting Financial Instruments
26 September 2008
IASB Preliminary Views on Amendments to IAS 19 Employee Benefits
29 September 2008
IASB FASB Exposure Draft An improved Conceptual Framework for Financial Reporting: Chapter 1: The Objective of Financial
Reporting and Chapter 2: Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information)
IASB FASB Consultation Paper Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Reporting
Entity
This list does not represent a complete list of the exposure drafts on issue. For all other open exposure drafts, refer to our
dedicated exposure draft website.
Chartered Accountants Technical
Conference
Throughout October in Sydney and Melbourne. Addresses the latest legislation changes and technical details in separate streams
for business and practice. The need–to–know updates that will make a difference to your growth.
Chartered Accountants Audit Essentials
Workshop
Throughout November in Sydney, Parramatta, Melbourne, Adelaide, Perth and Brisbane. Find out which hot spots ASIC will be
targeting, ensure you can address them, and get the latest updates on auditing standards and regulatory requirements.
Chartered Accountants Accounting Update and
Accounting and Audit of Registered Clubs
Throughout November and December in Sydney, Melbourne, Adelaide, Perth and Brisbane. These seminars will bring you up-to-date for
end of year reporting and the intricacies of accounting and auditing for registered clubs.
Please continue to help us to improve the newsletter by sharing your comments on articles featured in this newsletter, or any
financial reporting and auditing issues and experiences that might be of interest to other members. Responses should be emailed
to "Your Input" (techsubmissions@charteredaccountants.com.au) and may be published in future editions of ANT.
We welcome new subscriptions. To subscribe, unsubscribe or to update your mailing details, please visit the newsletters section of the
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queries.
Accounting & Assurance News Today is an initiative of the Reporting and
Assurance Team of the Institute of Chartered Accountants in Australia.
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