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Welcome to the twenty-third 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.
1. Sydney Corporate Reporting Discussion Group - 30 June 2008
As announced in last week’s ANT, the Institute of Chartered Accountants is hosting the next Sydney Corporate Reporting Discussion Group meeting on Monday, 30 June 2008 at its Sydney office at 33 Erskine Street, Sydney.
The guest speaker will be Doug Niven (Deputy Chief Accountant, ASIC) who will speak about what preparers of financial reports need to focus on for 2008.
If you wish to attend this forum and you are a member, please send your name, member number, position and organisation to crdg@charteredaccountants.com.au by Wednesday, 25 June 2008.
2. New edition of Members’ Handbook
The latest update to the Institute’s online Members’ Handbook was released on June 16 2008 and includes new and revised accounting, auditing, professional and ethical standards released up to Tuesday, 6 May 2008.
Members should note that it does not contain AASB 2008-4 Amendments to Australian Accounting Standard - Key Management Personnel Disclosures by Disclosing Entities, issued in June 2008 and operative for years ending on or after 30 June 2008 (refer ANT22/2008). The text of AASB 2008-4 is available from the AASB website.
3. AASB ITC 15 draft available
The Institute together with CPA Australia and the National Institute of Accountants (NIA) is preparing a submission on the Australian Accounting Standards Board’s (AASB) ITC 15 IPSASB ED 34 Social Benefits: Disclosure of Cash Transfers to Individuals or Households and CP Social Benefits: Issues in Recognition and Measurement for the AASB and International Public Sector Accounting Standards Board (IPSASB). Our initial conclusion is not to support the issue of this material as an Australian ED at this stage as the project is not sufficiently developed, but member feedback is welcome.
The draft can be viewed on the Institute’s website.
4. AASB ITC 16 draft available
The Institute together with CPA Australia and the NIA is preparing a submission on the AASB’s ITC 16 IPSASB Consultation Paper Accounting and Financial Reporting for Service Concession Arrangements for the AASB and IPSASB. Our initial conclusion is we agree with the IPSASB proposals and that the work performed by the IPSASB in this area should be used by the AASB, however we are concerned about the absence of the accountability concept in the AASB Framework. Member feedback is welcome.
The draft can be viewed on the Institute’s website.
5. AASB meeting agenda – 25-26 June 2008
The AASB’s agenda for its 25-26 June meeting is now available from the AASB website. Items for discussion include:
- Superannuation plans and ADFs – disclosure principles and definition of accrued benefits
- Social benefits – consider submission to IPSASB
- Service concessions – education session
- Cost of a subsidiary – consider draft standard
- Conceptual framework – consider preface to exposure draft
- Reporting entity – consider preface to discussion paper
- Not for profit departures from IFRS – consider issues paper
- Income tax – education session
- Annual improvements – consider draft standards
- Interpretations – consider recommendations of the super contributions tax panel
- GAAP/GFS entities within the GGS sector
6. AASB issues revised support materials
The AASB has now added the IASB’s 2008 updated support materials to its website. Under the AASB’s agreement with the IASB, support materials are only accessible to users with Australian URLs.
7. IASB Insight published
The International Accounting Standards Board (IASB) has published its Insight newsletter for the first two quarters of 2008. The newsletter contains:
- An update of the Board’s and the Foundation’s activities
- An interview with Sir David Tweedie and John Smith, IASB member, on the role of fair value and where accounting standards fit into the credit crisis
- An interview with Australia’s Jeff Lucy, chair of the Financial Reporting Council in Australia, on the reason for his appointment as a new trustee to the IASC Foundation and Australia’s adoption of IFRS
- An update on the IFRS for SME project including an analysis of key issues arising in comment letters received
Insight can be downloaded from here.
8. Best Practice guidance for shareholder reporting
The G100 group (which represents the chief financial officers of Australia’s largest organisations), in conjunction with Ernst & Young, have released a good practice guide to provide practical assistance to the preparers of shareholder reports.
The guide is based on the outcomes of a working party charged with reviewing the content of the increasing level of information being released to shareholders outside the traditional statutory reporting framework.
The new report, titled Reporting to shareholders - a good practice guide discusses the objectives for this type of reporting and provides guidelines to ensure that these reports better meet the shareholders’ needs for simpler, clearer and more readily understood information about their investments.
The guide highlights material business issues in a manner that is clear and consistent and its principles, while focused on annual reports can be easily applied to interim and other half yearly reports too. Key topics discussed are:
- Company structure and history
- Strategies and key risks faced
- Performance highlights and the KPIs applied to judge such performance and
- Statements by chairpeople and chief executives
More information and a copy of the report is available on the Group of 100 website.
Corporate Governance News | |
9. ASX reviews compliance with Corporate Governance Council’s Principles and Recommendations
The latest review by the Australian Securities Exchange (ASX) of reporting against the ASX Corporate Governance Council’s Principles and Recommendations shows that listed entities, both companies and trusts, continue to improve their corporate governance reporting.
Their full report, detailing overall compliance and comparing to previous results, and reviewing results by individual principle can be found here.
10. Trans Tasman cooperation extended to securities offerings
Businesses will find it easier to raise capital and investors to invest in Australian and New Zealand companies following the signing last week of a new Agreement on the Mutual Recognition of Securities Offerings.
Under the regime, Australian issuers can extend an offer that is being made in Australia to New Zealand investors without being required to comply with most of the substantive requirements of New Zealand's capital raising laws. For more information view the media release.
The Federal government is continuing its work in the mutual recognition of financial securities with the release of a joint Treasury-ASIC consultation paper Cross Border Recognition: Facilitating Access to Overseas Markets and Financial Services.
When completed, it will provide the framework for Australian investors to access more effectively other well regulated capital markets, advisers and products.
For more details view the media release or visit the ASIC website.
Professional & Ethics News | |
11. Are you a network firm?
The Accounting Professional and Ethics Standards Board (APESB) has issued a media release reminding members about the recent changes to the independence requirements affecting members of network firms that come into force on 1 July 2008 (refer ANT49/2007).
It is concerned that some smaller firms will not be aware of the new definition and the impact that it could have on the independence policies and procedures they currently have in place which may need to be updated. Under the new definition an accounting firm is considered to be part of a network when there is a larger structure in place aimed at cooperation and one or more of the following apply:
- Profit or cost sharing
- Share common ownership control or management
- Common quality control processes and procedures
- Common business strategy
- Use of a common brand name or
- Sharing of a significant part of professional resources
For more information view the media release (pdf).
Changes to AASB 124
Q: I have read that that there are changes to AASB 124 for 30 June 2008 year ends. The changes in AASB 2008- 4 affect disclosing entities that are companies that are required to disclose remuneration information about individual key management personnel (KMP) in the remuneration report within the directors' report under section 300A of the Corporations Act 2001 and Regulation 2M.3.03. The AASB 2008-4 changes exempt them from complying with the equivalent KMP disclosures in AASB 124 Related Party Disclosures [paragraphs Aus25.2 to Aus25.7.2]. Does this mean that this information will no longer need to be audited?
A: Although the KMP disclosures are now part of the directors' report, as opposed to a part of the financial report that has been moved to the directors' report for convenience, they still need to be audited. Section 308(3C) of the Corporations Act 2001, inserted in 2007, states ‘If the directors' report for the financial year includes a remuneration report, the auditor must also report to members on whether the auditor is of the opinion that the remuneration report complies with section 300A. If not of that opinion, the auditor's report must say why’.
The Auditing and Assurance Standards Board (AUASB) is currently working on sample wording for this section of the audit report.
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.
30 June 2008
AASB ITC 16 Request for Comment on IPSASB Consultation Paper Accounting and Financial Reporting for Service Concession Arrangements
4 July 2008
APESB ED 03/08 Conformity with Auditing and Assurance Standards
15 July 2008
IPSASB ED 34 Social Benefits: Disclosure of Cash Transfers to Individuals or Households and IPSASB Consultation Paper Social Benefits: Issues in Recognition and Measurement
16 July 2008
APESB ED 02/08 Reporting on Prospective Financial Information Included in a Disclosure Document
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.
CFO of the Future Series
Throughout July, August, September, October, November, December in Sydney and Melbourne.
An invaluable opportunity for current CFOs or aspiring CFOs, to hear the latest, including updates on GST, stamp duties, CGT, property finance and risk management plus much more.
Audit Conference 2008 DVD
Canberra, 3-4 June 2008.
Recorded at the conference in April 2008, view highlight sessions at your convenience, including fraud, audit sampling, quality control, problem audit opinions and more.
Auditor Independence Checklist
Throughout June in Adelaide, Perth and Sydney.
Show ASIC and your clients that you and your firm are sufficiently independent when conducting audits, with this user friendly checklist.
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.
Accounting & Assurance News Today is an initiative of the Reporting and Assurance Team of the Institute of Chartered Accountants in Australia.
Disclaimer
This is an initiative of, and has been prepared by the Reporting and Assurance Team of the Institute of Chartered Accountants in Australia. While every effort has been made to ensure the accuracy of the information contained therein, neither the Institute nor its employees shall be liable on any grounds whatsoever in respect of decisions or actions taken as a result of using this publication. The information provided is a general guide only and should not be used, relied on or treated as a substitute for specific professional advice or referral to the relevant specific standard.
The information is this email is confidential to the named addressee and subject to copyright. No one else may read, print, store, copy, forward or act in reliance on all or any of this email or its attachments. If you are not he intended recipient, any use, reliance upon, disclosure or copying of this email is prohibited and unlawful. If you have received this email in error please notify the sender. The Institute of Chartered Accountants in Australia (ABN 50 084 642 571) does not warrant that this email and any attachments are error or virus free and recommends that all attachments be checked for computer viruses.
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