The European Commission (EC) has published a new section on its website indicating when the various actions of its corporate reporting ecosystem reform initiative can be expected.
This review follows, notably, the Wirecard case in Germany, which in EC’s view warrants possible tweaks into the EU corporate reporting ecosystem. The main objective is to foster investor protection and capital market integration in Europe, and it would focus on:
The current timeline is the following:
This new stand-alone draft standard responds to demands to have a set of high-quality requirements tailored for the needs of less complex entities (LCEs). It will provide a globally consistent approach at a time where several jurisdictional-specific LCE standards or related initiatives are arising.
The International Auditing and Assurance Standards Board (IAASB) strongly encourages all interested stakeholders to provide their feedback. The consultation is open for comment until 31 January 2022.
In our response, we welcome the IAASB’s ongoing projects on the audits of LCEs, audit evidence, fraud and going concern. These are relevant issues for both auditors and stakeholders.
Acknowledging the resource constraints of the IAASB, we believe the topics identified by the IAASB as potential candidates for future work should be considered in three different categories:
1 – priority areas
2 – candidates for narrow scope maintenance
3 – matters for further exploration
In this report, the International Forum of Independent Audit Regulators (IFIAR) analyses internationally relevant developments in audit markets as reported by its members. Observations are grouped into five policy topics:
Read more for details on key observations, facts and figures
The Financial Reporting Council (FRC) has launched a consultation on proposals to update and strengthen the Audit Firm Governance Code. The Code applies to the Big Four and to other firms auditing FTSE 350 companies. Going forward it will also apply to firms that audit significant numbers of other types of public interest entities (PIEs).
In support of the FRC’s objectives to promote high-quality audit and audit market resilience, the proposals aim to strengthen the Audit Firm Governance Code in key areas of accountability and firm resilience.
The consultation is open for comment until 18 November 2021.
The FRC inspection and supervision results for 2020/2021, covering the seven largest audit firms, show that nearly one third of the inspected audits need improvement.
The FRC CEO notes that while these results show some improvement on last year’s results, this is marginal and significant change still needs to happen to meaningfully improve audit quality.
In addition to the consultation on audit quality indicators (AQIs) (for reference see the previous issue of Audit Update), the Dutch Ministry of Finance issued a second consultation on audit this summer. Its proposals aim to introduce measures to permanently improve the quality of statutory audits. Some of the main proposals are:
The deadline for responses is 16 September 2021.
Read more (in Dutch, the website also includes responses)This curated content was brought to you by Júlia Bodnárová, Accountancy Europe Senior Advisor since 2017. You can send her tips by email and connect with her on LinkedIn.