Technical news in brief June 2021

ICAEW's Audit and Assurance Faculty brings you the latest technical updates on developments in auditing and assurance, financial reporting and ethics. Please note Only Audit and Assurance Faculty members and Faculties Online subscribers have access to these technical updates.

Videos on transforming audit firm culture

Audit and assurance | 25 June 2021

Following the FRC’s international conference on audit firm culture, each of the daily one-hour sessions have been made available as video recordings on:

Global sustainability assurance study

Audit and assurance | 23 June 2021

A global benchmarking study of large companies has found a lack of standardisation in the evolving area of sustainability practices and assurance. Published by the International Federation of Accountants, The State of Play in Sustainability Assurance provides a comprehensive global picture and contextualises this analysis, with data on how and where sustainability-related information is reported and how this relates to assurance practices.

Webinars on strengthened international independence standards

Ethics | 17 June 2021

Recordings are available from the International Ethics Standards Board for Accountants (IESBA) of events to assist with adoption and implementation of recently released revisions to the non-assurance services (NAS) and fee-related provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards).

In the videos, IESBA representatives explain key provisions that will come into effect in December 2022.

Global public sector shift to accrual accounting

Financial reporting | 16 June 2021

By 2025, governments in 50% of jurisdictions will report on an accrual basis, according to a report released by the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA). The 2021 Index Status Report captures information from 165 jurisdictions and was drawn from the International Public Sector Financial Accountability Index, developed by CIPFA and IFAC, which captures use of public financial reporting bases and frameworks by governments around the world.

Quality management implementation guides

Audit and assurance | 14 June 2021

The International Auditing and Assurance Standards Board (IAASB) has released two guides to support implementation of its suite of quality management standards.

The First-time Implementation Guide for International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements and the First-time Implementation Guide for ISQM 2, Engagement Quality Reviews will help stakeholders understand the standards and implement the requirements.

The IAASB will also issue an implementation guide for the International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements, later in 2021.

FRC amends COVID-19 rent concessions

Financial reporting | 9 June 2021

In response to the continuing impact of the pandemic, the Financial Reporting Council has issued Amendments to FRS 102 and FRS 105 – COVID-19-related rent concessions beyond 30 June 2021. These amendments extend by one year the application of requirements (originally introduced in October 2020) that cover the accounting treatment of temporary rent concessions occurring as a direct consequence of the COVID-19 pandemic.

The amendments apply to rent concessions that reduce only lease payments originally due on or before 30 June 2022, provided the other conditions for applying the requirements are met. The amendments are effective for accounting periods beginning on or after 1 January 2021, with early application permitted.

Webinar on disclosure requirements in IFRS

Financial reporting | 2 June 2021

Following a live International Financial Reporting Standards Foundation webinar on 19 May about the International Accounting Standards Board’s Exposure Draft, Disclosure Requirements in IFRS Standards – A Pilot Approach, a recording and accompanying slide deck are available.

The webinar recording provides an overview of the proposals in the Exposure Draft and a Q&A session at the end of the presentation.

The deadline for comments on the Exposure Draft is 21 October 2021.

IAASB finds support for auditor reporting standards

Audit and assurance | 2 June 2021

The International Auditing and Assurance Standards Board (IAASB) has published a feedback statement, after a public consultation, on the auditor reporting standards it released in 2015, to enhance the communicative value, transparency and relevance of the auditor’s report.

Stakeholders expressed broad support for the standards, and the resulting auditor’s report, and indicated that the standards have met the IAASB’s objectives.

The stakeholder feedback statement summarises key themes and views shared with the IAASB through a survey and roundtable discussion during 2020. Areas of focus for stakeholders included key audit matters, going concern and other information in the auditor’s report.

Webinars on new quality management standards

Audit and assurance | 1 June 2021

The International Auditing and Assurance Standards Board (IAASB) in collaboration with IFAC is hosting a webinar series – during June, July and August – to support implementation of the IAASB’s new International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements.

The four ISQM 1 webinars are entitled:

All You Need to Know about the Firm’s Risk Assessment Process;
Resources: Expectations for Firms and Engagement Partners;
What’s New for Firms’ Monitoring and Remediation Processes; and
Bringing it All Together: Exploring all the Components of a Quality Management System.