Developments in financial reporting

It is getting easier for auditors to access resources that will keep their financial reporting knowledge updated. From 1 January 2023, content from the Financial Reporting Faculty (FRF) will be freely available to all ICAEW members and this article highlights some of the FRF material that auditors may find useful.

There are many areas where FRF articles, guidance, helpsheets, technical releases, webinars and other technical and practical materials may prove valuable for auditors. Resources for preparers and reporters can also enable auditors to stay up to date with recent and forthcoming developments around International Financial Reporting Standards (IFRSs) and UK Financial Reporting Standards (FRSs).

Auditors need knowledge of both auditing standards and accounting standards and ICAEW’s Quality Assurance Department (QAD) sees the latter as an area of weakness during audit quality reviews, particularly in relation to FRS 102. Audit & Beyond highlighted this, and shared some QAD improvement tips for firms.

To assist firms, there is an FRS 102 resource hub.

GAAP guidance

UK GAAP-related outputs from the FRF during 2022 included:

• Going concern considerations – a guide for FRS 102 preparers (published September 2022);
• 2022 UK GAAP Accounts – a factsheet published in August 2022, highlighting new and modified requirements for preparers, and dealing primarily with new UK GAAP requirements that are mandatory for accounting periods beginning on or after 1 January 2022;
• a guide on How to distinguish adjusting from non-adjusting post balance sheet events under UK GAAP (published in May 2022); and
• a technical release TECH 01/22 Disclosure of auditor remuneration, for the audit of accounts and other non-audit services, in accordance with requirements of the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 (Statutory Instrument 2008/489), which was published and updated during 2022.

IFRS intelligence

IFRS-related outputs from the FRF in 2022 included:

• Going concern considerations – a guide for IFRS reporters (published September 2022);
• 2022 IFRS Accounts – a factsheet published in August 2022, highlighting new and modified requirements for preparers and dealing primarily with new IFRS requirements with mandatory application for annual periods beginning on or after 1 January 2022;
• IFRS 17 Insurance contracts for non-insurers – with guidance on assessing whether or to what extent non-insurers will be affected by IFRS 17 (published August 2022); and
• IFRS 9 Financial Instruments – Hedge Accounting – a factsheet focusing on how IFRS 9 affects non-financial sector entities (updated May 2022).

These and other financial reporting factsheets on IFRS, UK GAAP and UK regulations are available on the web.

UK regulation resources

Some auditors may find FRF factsheets, webinars and other outputs on UK regulation particularly useful. During 2022 the faculty has, for example, created guidance on:

• the scope, content and requirements of the strategic report and directors report (and including links to a host of useful documents);
• the strategic report and how to prepare one;
• the Section 172(1) requirements; and
• a webinar ‘Introducing the Climate-related Financial Disclosure Regulations’ effective from 6 April 2022, explaining who’s in scope of the new requirements, what information is required to be disclosed and where to find further guidance.

A hub page on UK regulation for company accounts.

All resources from the Financial Reporting Faculty can be accessed from its hub page.

A wider range of financial reporting resources (including those from the FRF) can be accessed.