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Standard setting
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Invitation to comment
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The Institute is seeking comments on the following tentative agenda decisions published by the International Financial Reporting Standard (IFRS) Interpretations Committee by 24 April:
The Institute is also seeking comments on the International Accounting Standards Board (IASB) Exposure Draft Amendments to the Classification and Measurement of Financial Instruments (Proposed amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures) by 12 June.
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Publication: Financial Reporting Considerations for Closing Out 2022
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The Institute has issued the publication Financial Reporting Considerations for Closing Out 2022 which highlights the key topics and reminders that entities should consider in preparing their December 2022 financial statements. The publication discusses new and revised Hong Kong Financial Reporting Standards mandatorily effective from 1 January 2022, agenda decisions issued by the IFRS Interpretations Committee in 2022 that are relevant to Hong Kong entities and the impact on financial reporting brought by the changes in the macroeconomic environment. The considerations highlighted in the publication are also relevant for upcoming interim period-ends and financial year-ends.
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IFRS Interpretations Committee March 2023 Update
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The IFRS Interpretations Committee Update provides a summary of the discussions at its March meeting.
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IASB initiates project to consider climate-related risks in financial statements
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The IASB has added a project to its work plan to explore whether and how companies can provide better information about climate-related risks in their financial statements. In undertaking the project, the IASB will consider the work of the International Sustainability Standards Board (ISSB) to ensure any proposals work well with IFRS Sustainability Disclosure Standards and that any information required by the two boards would be complementary.
The project will research to what extent the educational material published by the IASB in 2020 is helping companies reflect the effects of climate‑related risks in the financial statements, and what actions, if any, the IASB could take to further improve information about these matters.
In this article, Andreas Barckow, IASB Chair, provides further information about the project and explains how it relates to the work of the ISSB.
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IFRS for SMEs Accounting Standard March Update
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The IFRS for SMEs Accounting Standard Update provides a staff summary of news, events and other information about the IFRS for SMEs Accounting Standard. In particular, the IASB is inviting accounting practitioners who are involved in the preparation of SMEs’ financial statements to participate in fieldwork to test the proposed requirements in the Exposure Draft Third Edition of the IFRS for SMEs Accounting Standards. The aim of the field test is to understand whether preparers can make the judgements necessary to apply the proposed revised Section 23 Revenue. The results of the field test will be considered by the IASB as part of its redeliberation process.
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AFRC Audit Fee Report and 2023 Survey Report
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The two new reports on audit fees (Audit Fee Report) and the appointment of auditors in Hong Kong (Survey Report) by the Accounting and Financial Reporting Council (AFRC) calls for auditors, audit committees, listed companies and institutional investors to develop a stronger focus on the setting of audit fees and the appointment of auditors, both of which are crucial in upholding the quality of financial reporting and audit in listed companies.
Audit Committees are urged to develop a robust set of processes and procedures in auditor selection and audit tender by referring to the AFRC’s relevant guidelines, as well as to ensure that audit fees are agreed at a level that allows auditors to devote sufficient time and specialised resources to conduct a quality audit. While those in management and the Board are encouraged not to pressure their auditors to reduce audit fees to a level that may compromise audit quality.
Read the AFRC press release for summaries of key findings for both reports as well as key messages for various stakeholders.
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Invitation to comment
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The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft on Proposed Part 10, Audits of Group Financial Statements of the Proposed ISA for Audits of Financial Statements of Less Complex Entities (ISA for LCE) and proposed conforming amendments by 2 April.
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HKICPA Alerts on auditors-related matters
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The Institute has published the following Alerts which highlight requirements relevant to auditors:
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How CPAs are leveraging technology to improve efficiency
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The article by the Association of International Certified Professional Accountants discusses the benefits of integrating technology and provides examples of how the firms use it in everyday work.
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IAASB March board meeting
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The meeting papers of the IAASB March board meeting are now available.
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Invitation to comment
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The Institute is seeking comments on the International Ethics Standards Board for Accountants (IESBA) Exposure Draft Proposed Revisions to the International Code of Ethics for Professional Accountants (Including the International Independence Standards) addressing Tax Planning and Related Services by 18 April. The proposed revisions respond to public interest concerns about tax avoidance and the role played by consultants, including professional tax advisers, in light of revelations in recent years such as the Paradise and Pandora Papers. The proposals strengthen the ethical expectations for professional accountants in business and in public practice when performing tax planning activities for employing organizations or providing tax planning services to clients.
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Ethics Circular 1 Guidance for Small and Medium Practitioners on the Code
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The Institute has updated the Ethics Circular 1 to highlight matters relating to the application of the Code to the provision of non-assurance services.
The Institute’s E-learning: Revised Non-Assurance Services and Fee-Related Provisions of the Code provides an overview of the revisions and deep dive into areas such as the new self-review threat prohibition for public interest entities audit clients; self-interest threats created by fees paid by an audit client; and strengthened provisions regarding relative size of fees to the firm from a particular audit client.
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IESBA Q&A on revisions to the definitions of listed entity and PIE in the Code
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The Staff of the IESBA released a questions and answers (Q&As) publication on the revisions to the definitions of listed entity and public interest entity (PIE) in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the IESBA Code). The Q&As highlight, illustrate or explain aspects of the PIE revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement. It also assists stakeholders including firms to adopt and/or implement the PIE revisions, and understand the revised PIE definition and related provisions in the IESBA Code.
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IESBA March board meeting
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The meeting papers of the IESBA March board meeting are now available.
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Connectivity―what is it and what does it deliver?
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The benefits of connectivity were an important consideration when the IFRS Foundation created the ISSB to operate alongside the IASB. Stakeholders consistently highlighted the benefits to be gained from having two standard-setting boards within the IFRS Foundation, both focused on providing information to inform investment decisions.
In this article, Andreas Barckow, IASB Chair, and Emmanuel Faber, ISSB Chair, explain what connectivity means, why it matters and what benefits it can deliver.
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ISSB March Podcast & Update
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The ISSB podcast, with its chair and vice-chair highlighting the recent discussions and decisions made at its March meeting, and a summary of the meeting, are now available.
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