Accounting and Auditing News Today (ANT) Issue No 50 - 20 December 2007

Welcome to the fiftieth edition of Accounting & Auditing News Today for 2007. What follows is a brief update on changes and proposed changes in the financial reporting and auditing sphere.

1. Season’s Greetings from Reporting & Assurance

This is the final ANT for 2007.

The Institute and its Reporting & Assurance team would like to thank you for your ongoing support and subscription to ANT throughout the year. We hope you have a happy and restful holiday season and look forward to continuing to keep you up to date with changes in the fields of financial reporting, audit and assurance during 2008. The first issue of ANT in the new year will be dispatched on Friday 18 January 2008.

The Institute will be closed from 3pm 24 December 2007 to 1 January 2008 inclusive. Queries to the Institute's Technical Enquiry Service helpline (both phone and email services) received after 2pm Friday 21 December 2007 will be responded to as soon as possible after Monday 7 January 2007 when our helpline services reopen. For technical assistance during this period please refer to the technical and professional section of our website. Alternatively contact the Institute’s knowledge centre whose services will reopen on 2 January 2008.
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The Australian Accounting Standards Board (AASB) has released five standards and one interpretation.

These new standards follow extensive consultation through ED 156 “Proposals Arising from the Short-term Review of the Requirements in AAS 27, AAS 29 and AAS 31” resulting in the subsequent withdrawal of AASs 27, 29 and 31. The requirements contained in these withdrawn AASs have now been moved substantially unamended into:

• AASB 1004 “Contributions”
• AASB 1050 “Administered Items”
• AASB 1051 “Land Under Roads”
• AASB 1052 “Disaggregated Disclosures”
• AASB 2007-9 “Amendments to Australian Accounting Standards arising from the Review of AAS 27, AAS 29 and AAS 31”
• Interpretation 1038 “Contributions by Owners Made to Wholly-owned Public Sector entities”

The standards/interpretation is available for download from the AASB website.
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The AASB has now issued as Australian ED 160 the IASB’s proposed amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” and IAS 27 “Consolidated and Separate Financial Statements” – “Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate”. This was released by the IASB last week (refer ANT49 – 14 December 2007).

The ED proposes to:

• provide relief from the requirements in IAS 27 to determine the cost of subsidiaries, associates and jointly controlled entities on transition to IFRS
• remove the definition of the cost method from IAS 27 which will then require dividends received from subsidiaries, associates and jointly controlled entities to be recorded as income
• clarify the requirements that apply when an entity restructures and inserts a new parent entity between the operating entity and its shareholders

The Auditing and Assurance Standards Board (AUASB) has released Guidance Statement GS 006 “Electronic Publication of the Auditor’s Report” replacing AGS 1050 “Audit Issues Relating to the Electronic Presentation of Financial Reports”.

GS 006 provides guidance to auditors on matters relating to the electronic publication of the auditor’s report and incorporates changes from the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007.

Guidance Statement GS 006 can be downloaded from the AUASB website. It is effective immediately.
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The Australian Securities and Investments Commission (ASIC) has released a report titled “Overview of decisions on relief applications (June to August 2007)”, which outlines its recent decisions on applications for relief from the corporate finance, financial services and management investment provisions of the Corporations Act between 1 June and 31 August 2007.

The report summarises situations where ASIC has exercised, or abstained from exercising, its powers of exemption from, or modification to, the financial reporting, managed investment, takeovers, fundraising and financial services provisions of the Corporations Act. Also highlighted in the report are instances where ASIC decided to adopt a no-action position regarding specified non-compliance with the provisions. The report features an appendix detailing the relief instruments ASIC executed.

The report can be accessed from the ASIC website.
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The Australian Prudential Regulation Authority has released the prudential standards that give effect to the implementation of the Basel II Framework for authorised deposit-taking institutions in Australia. The standards are accompanied by a response paper detailing issues raised by industry on the final drafts of these standards.

These standards will come into force 1 January 2008. For more information, refer to APRA’s website.
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The International Federation of Accountants’ (IFAC) Small and Medium Practices Committee (SMP) has released an implementation guide aimed at assisting small and medium entities and their auditors in applying International Standards on Auditing (ISAs) to SME audits.

The guide is available at no charge.
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The Transnational Auditors Committee (TAC) is an executive committee of IFAC dedicated to representing and meeting the needs of the members of the Forum of Firms, which perform transnational audits. It undertook a study examining how setting the right tone can positively influence audit quality.

This good practice guidance paper titled “Tone at the Top and Audit Quality”, is based on the current practices of ten TAC members. The paper details its analyses in five areas: strategy, communication, job descriptions, performance appraisals and monitoring.

The guidance paper can be obtained free of charge.
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The Trustees of the IASC Foundation announced the inaugural membership of the XBRL Advisory Council and XBRL Quality Review Team. Both bodies will work to advise and review the future development and adoption of XBRL for IFRS.

The XBRL Advisory Council will meet for the first time in December 2007, and the XBRL Quality Review Team in January 2008.
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Chartered Accountants SMSF Conference
Sydney - Friday, 22 February. As the number of Self Managed Superannuation Funds continue to grow, so do the number of opportunities. Build on your knowledge with exceptional speakers, case studies and examples.

Chartered Accountants Business Forum 2008
Throughout April, May & June in Brisbane, Melbourne, Sydney, Canberra, Adelaide & Perth
What’s your strategy for the year ahead? Join industry leaders and your peers as vital topics are addressed, key technical updates explored, and new ideas and options examined.

New Employees Workshop 2008
Throughout February in Brisbane, Melbourne, Sydney, Parramatta, Newcastle, Tamworth & Albury. Five day workshop.
Give your new employees the practical experience and real-life skills they need to deliver professionally at the New Employees Workshop.

Newcastle Convention 2008
Newcastle - Monday, 10 - Wednesday, 12 March. Concise updates on industry issues to accounting and finance professionals in the Newcastle/ Hunter region to immediately apply in your workplace.

Audit of SMSF DVD
*NEW PRODUCT* If you were unable to attend the recent sell-out workshops in October/November, don’t miss out on this opportunity to view highlights plus added extras at your convenience.

Corporate Accountants Toolkit Series
Access the latest updates in accounting standards and the impact of these changes on financial reporting requirements by purchasing Module 1 and Module 2 of the Corporate Accountants Toolkit.

National Audit Conference 2007 DVD
If you didn't attend the National Audit Conference in June 2007 - don’t miss out on this opportunity to view the conference at your convenience informing you and your colleagues.
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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 website: Financial Reporting EDs and Audit and Assurance EDs

Forward all ED submission/comment emails to techsubmissions@charteredaccountants.com.au.

11 January 2008
IASB ED Proposed Amendments to IAS 39 “Financial Instruments: Recognition and Measurement Exposures Qualifying for Hedge Accounting”
IASB ED 9 Joint Arrangements
IASB ED Proposed Improvements to International Financial Reporting Standards

13 January 2008
AASB ED 160 Proposed amendments to IFRS 1 and IAS 27 – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

18 January 2008
APESB ED 06/07 Proposed amendments to Auditor Independence Requirements in APES 110 “Code of Ethics for Professional Accountants”

15 February 2008
AUASB ED Proposed ASAE 3100 “Compliance Engagements”

26 February 2008
IASB ED Proposed amendments to IFRS 1 and IAS 27 – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

17 March 2008
IASB ED Proposed amendments to IFRS 2 and IFRIC 11

4 April 2008
AUASB ED 07/07 Proposed Standard APES 225 “Business Valuation”

Technical Query Service
The Institute's Reporting and Assurance 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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More information is available at our Institute website: www.charteredaccountants.com.au.

The Reporting and Assurance team comprises, Jeanette Dawes CA, Roslyn Hatton CA, Kerry Hicks CA, Claire Locke CA, Stephanie Kemp CA, Andrew Stringer; Benjamin Lau, Jane Ma and Adrian Tam - Reporting and Assurance Assistants.