Newswire July 2024

AUDIT & ACCOUNTING

FRC restructure creates new Market Intelligence and Digital Reporting Functions 

The FRC has announced that following a strategic review of its economic analysis, data analysis, research and market monitoring functions, existing resources have been reorganised into two newly structured teams to enable delivery of better stakeholder outcomes across the FRC’s remit and regulatory scope. These two new functions are Market Intelligence and Insights led by Laura Warren, and Digital Reporting and Taxonomies led by Phil Fitz-Gerald. The work previously undertaken by FRC Lab on reporting and market insights will be absorbed into these new functions. 

The Market Intelligence & Insights function, will focus on providing more comprehensive, evidence-based analysis and insights across the FRC’s policy development, monitoring and regulatory activities. Separately, the new Digital Reporting & Taxonomies function has been established, reflecting the importance of these rapidly evolving areas. It will focus on building the FRC’s knowledge and capability, improving the quality of digital reporting, and developing tools to support the reporting ecosystem. 

IASB publishes its review of impairment requirements relating to financial instruments 

The IASB has published its Post-implementation Review (PIR) of the impairment requirements in IFRS 9 Financial Instruments—Impairment. 

The IASB comment that the objective of the PIR was to assess whether the effects of applying the impairment requirements are as the IASB intended when it developed these requirements. 

Overall, feedback and research carried out during the PIR show that the impairment requirements in IFRS 9 are working as intended and provide useful information to users of financial instruments. Specifically, the requirements: 

• have led to more timely recognition of credit losses; 

• provide useful information to investors about expected credit losses, although targeted improvements to credit risk disclosures were suggested; and 

• can generally be applied consistently, with some areas requiring further clarification and guidance. 

In response to the feedback, the IASB will explore whether requirements for modification, derecognition and write-off of financial instruments, and the consequential effects on recognition of expected credit losses, can be clarified as part of its project on Amortised Cost Measurement. Furthermore, the IASB has added a new project to its pipeline to investigate targeted improvements to the credit risk disclosure requirements in IFRS 7 Financial Instruments: Disclosures. 

CHARITIES 

Scottish Charities asked to prepare for changes to the Scottish Charity Register 

The Scottish Charity Regulator (OSCR) has stated it will be displaying the accounts for all Scottish charities on the Scottish Charity Register from next year, and has asked for Scottish charities to start considering what it means for them. 

The OSCR comment that the changes reflect the Charities (Regulation and Administration) (Scotland) Act 2023 and aim to enhance transparency, accountability and public trust in Scotland’s charitable sector. Parliament will decide the exact commencement date of this change early next year, but it is expected to be summer 2025. Some parts of the Act, such as OSCR’s increased inquiry powers, are already in place. You can find more information about changes in the Act here. 

ICAEW 

Upcoming changes to PII Regulations: FAQs 

In respect of the New PII Regulations which will come into effect from 1 September 2024, the ICAEW have set out responses to some FAQs below to help members understand the changes and assess whether they will need to make changes to their firm’s professional indemnity insurance. The ICAEW reminds members that PII is compulsory for all ICAEW members who have a practising certificate and are engaged in public practice, regardless of the amount of practice income. 

ICAEW issues Audit News 74 

The latest issue of Audit News, published by the ICAEW, includes details of: 

• changes under the special entrant route for the Audit Qualification; 

• how firms are implementing ISQM 1; and 

• changes to the UK Audit Regulations. 

The ICAEW also provide updates from the Professional Standards Department around CPD, the disciplinary process and more. 

ICAEW issues Statement of Cash Flows: Common Pitfalls and Tips for Reviewers 

The ICAEW’s Corporate Reporting Faculty has published a guide outlining common pitfalls when preparing statements of cashflows which also provides tips for reviewers. 

ACCA 

ACCA publishes June 2024 Quarterly Update 

The ACCA has published its quarterly update which focuses on the root causes identified by firms in relation to the issues raised during their audit monitoring reviews. The ACCA comment that they wanted to provide an update on these root causes and continue to flag, not only the importance of identifying the root causes of the deficiencies but also then taking the necessary steps to rectify these. 

TAXATION

Class 2 NIC processing errors

The ICAEW has published an update on Class 2 NIC processing errors for 2022/23. To read more, please click here.

Rules for reporting salary advances altered

The ICAEW has reported that changes have been made to the rules applying to advances on wages and PAYE RTI reporting. To read more, please click here.