Issue No 36/2006 - ANT36
22 September 2006
HEADLINES
Welcome to the thirty-sixth 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. Institute's new Head of Audit
ANT welcomes Andrew Stringer who commenced work at the Institute on September 18 as the Institute's new Head of Audit. Andrew's appointment reflects the need for increased resources and representation in the audit area, especially in light of the force of law audit developments and the increasing focus on audit by government, regulators and investors.
Andrew has extensive experience to enable him to fulfill his new position, having been working in the audit field for over 30 years. Most recently he was the National Director Audit Services for Horwath Australia, contributing to that organization's growth and development of audit standards, methodologies and quality control.
Top
2. AASB 1049 and AASB Interpretation 10 released
The Australian Accounting Standards Board (AASB) has now released its 2 new pronouncements approved at the latest AASB meeting held in early September (refer ANT34: 8 September 2006)
The new documents are:- AASB 1049 "Financial Reporting of General Government Sectors by Governments"
- AASB Interpretation 10 "Interim Financial Reporting and Impairment"
The new AASB 1049 applies to annual financial reporting periods beginning on or after 1 July 2008 with early adoption permitted. It specifies the form and content of General Government Sector reports and reduces the number of differences between GAAP and the Government Finance Statistics.
Interpretation 10 applies to annual reporting beginning on or after 1 November 2006 with early adoption permitted. It deals with the recognition of impairment losses on goodwill and other financial assets in interim reporting periods and whether these can be reversed in subsequent reporting periods if circumstances change.
The Interpretation states that an entity shall NOT reverse an impairment losses recognised in a previous interim financial statement in a subsequent interim or annual financial statements.
The new pronouncements are available for download on the AASB website http://www.aasb.com.au.
Top
3. Replacement UIG Panel Members announced
The AASB has announced the 'successful' nominations to the replacement Urgent Issues Group - potential Advisory Panel Members. The 73 names contain a mix of private and public sector preparers, various sized audit firms, and academics. The Institute's Technical Adviser Keith Reilly is one of the 3 Accounting Bodies' Representatives and ASIC is also represented.
As issues are identified, the AASB will appoint individual advisory panels from this list on a topic-by-topic basis. These appointments will be based on the skills and expertise required to deal with particular issues.
The AASB's website includes the current list which is being added to, so if you would like to be considered, send your details to the AASB at http://www.aasb.com.au.
Top
4. AUASB only wants comments on AGS 1050!
In last week's ANT, we published a request from the AUASB for comments on the usefulness of AGSs. The AUASB would like to stress that at the moment, they only require comments on AGS 1050.
Top
5. Next week's ANT delivered on Wednesday
The Institute is currently undertaking a major redevelopment of its website which will be launched in the last week in September. In order to ensure that the despatch of ANT is not disrupted by the changeover process ANT next week will appear in your inbox on Wednesday evening.
More details about the new website "charteredaccountants.com.au" will be contained in ANT over the next 2 weeks.
Top
6. AASB publishes new rejection statement
The AASB has published its latest rejection statement entitled "Leases - Recognition of Contingent Rentals". Rejection statements are published when the AASB determines not to include an item on its interpretations agenda.
The issue under consideration was whether an estimate of contingent rentals payable /receivable under an operating lease should be included in the total lease payment/ income to be recognized on a straight-line basis over the lease term. This issue was referred to IFRIC who conceded that IAS 17 was unclear about the matter but that it had generally not resulted in contingent amounts being included. It has asked the IASB to amend IAS 17 to clarify their intention. The AASB decided at its September meeting to support the IFRIC decision.
The new rejection statement is available on the AASB website http://www.aasb.com.au.
Top
7. Submission on IFRIC D19 lodged
The Institute has lodged with the AASB its submission on the IFRIC interpretation D 19 "IAS 19 - The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements". This interpretation proposed amendments to IAS 19 that require any minimum funding requirements to be taken into account when recognizing an Asset or adjusting a Liability, and that they be accounted for in a like manner to other IAS 19 amounts.
The Institute believes that the proposals in D 19 do not have any Regulatory Issues or Impact on the best interests of the Australian economy, as minimum funding requirements do not apply to Australian Superannuation Funds.
A copy of the Institute submission is available on the submission page on our website
Top
8. NZ Closer Economic Relations Bill - submissions sought
The Parliamentary Secretary to the Treasurer, The Hon Chris Pearce MP recently released the draft Corporations Amendment (NZ Closer Economic Relations) Bill 2006 for public exposure.
This Bill will implement the agreement between the Government of Australia and the Government of New Zealand in relation to mutual recognition of securities offerings, signed earlier this year and will reduce the filing requirements for New Zealand companies doing business in Australia. This will occur by exempting New Zealand companies operating in Australia from lodging the same information with the Australian Securities and Investments Commission that the companies have already lodged with the New Zealand Registrar of companies so preventing unnecessary duplication and cost.
For more details refer the media release at http://parlsec.treasurer.gov.au/cjp/content/pressreleases/2006/032.asp.
Written comments on the draft bill should be received by 13 October 2006. and may be submitted by mail, fax or email to:
Corporations Amendment (NZ Closer Economic Relations) Bill 2006
Corporations and Financial Services Division
The Treasury
Langton Crescent
PARKES ACT 2600
Fax: 02 6263 2770
Email: CorporationsNZCERBill@treasury.gov.au
The Institute is preparing a draft submission which is expected to encourage the federal Government to expand the Bill to accept for lodgement purposes Australian and NZ Financial Reports (Accounts) in both Countries, particularly as NZ is adopting IFRS (International Accounting Standards) from 2007. If you wish to have input to the Institute submission please email techsubmissions@icaa.org.au.
Top
9. Corporations Amendment (Takeovers) Bill - submissions sought
The Bill will amend provisions in Chapter 6 of the Corporations Act 2001 which relate to takeovers and the powers of the Takeovers Panel. Two recent decisions relating to the Takeovers Panel interpreted the limits of the jurisdiction of the Takeovers Panel, as set out in the current legislation. As a result of those cases, concerns were raised that it may be open to read the Panel's powers and jurisdiction in a way that is too narrowly formulated to enable the Panel to perform effectively the role envisaged for it by Parliament. When enacted, the Bill will ensure the Panel can continue to act in an effective, efficient and expeditious manner as the primary forum for resolving disputes during takeover bid periods, relying on the specialist expertise of its members, so that the outcome of any takeover bid can be resolved by the target shareholders on the basis of its commercial merits.
Written comments on the draft Bill should be received by 5 October 2006 and may be submitted by mail, fax or email to:
Corporations Amendment (Takeovers) Bill 2006
Corporations and Financial Services Division
The Treasury
Langton Crescent
PARKES ACT 2600
Fax: 02 6263 2770
Email: corporationstakeoversbill@treasury.gov.au
The draft Corporations Amendment (Takeovers) Bill 2006 and explanatory material is to be found at http://www.treasury.gov.au.
Top
10. Query of the week - Signing audit reports
Q: I am a registered company auditor and hold an Institute practicing certificate. I work for an ASIC approved audit company (AAC), but I am not a director of the company. Can I sign off audit reports in my own name when the clients' work is completed under the banner of the audit company
A: The wording of S324AD allows the audit report issued by an AAC to be signed by either a director of the audit company or the lead or review auditor for the assignment. The ASIC Auditor rotation policy proposal issued April 2006, A5, also states ASIC's view "that any employee of the audit firm or AAC who is a registered company auditor (RCA) may act as the lead auditor". Note, however, that this paper is still only at the policy proposal stage.
This would therefore place the obligation on the AAC to decide who can sign audit reports in its name. In making this decision Professional Indemnity issues will need to be considered. If a member is an employee signing off on the audit report on behalf of the firm when they are not a director, they need to ascertain whether that could leave them personally liable. Members need to confirm (preferably in writing) that the AAC's PI insurance would cover them before issuing a report in both their own and the AAC's name as required by section 324AD. If the alternative approach of relying on the PI held in their own right under their CPP is adopted, written confirmation should be sought from their provider, as they are not, in this instance, the appointed auditor.
The Institute's Quality Review team takes the view that it is possible for a staff member to be the auditor, but subject to their holding a CPP and PI (and being appointed auditor of course, but that is not relevant to this query). Such a member is then subject to review.
Top
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?
Why not forward them this email?
We welcome new subscriptions. Simply email ca_technica@icaa.org.au. In order to create a proper subscription record in our database we require your full name, email address, street address, phone number and ICAA membership number (if applicable).
TECHNICA/XFILES/ARTICLES/ANT/ANT36_06_09_22. The Technical Standards team comprises, Jeanette Dawes CA, Roslyn Hatton CA, Stephanie Kemp CA, Claire Locke CA, Keith Reilly CA; Benjamin Lau, Jane Ma and Yi-Shun Teoh - Standards Assistants.
Disclaimers
This is an initiative of, and has been prepared by the Technical Standards 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. |
|
The Institute’s education and training pathway is the preferred choice for industry professionals.
Considering a career as a Chartered Accountant? Looking for the next step in your professional life?
The Institute is leading the debate in the areas that matter most to business and the accounting profession. 
The Institute produces an invaluable suite of tools, guidance, products and services to help members in their work. 
Print this Article
Email this Article
