The Institute of Internal Auditors (IIA) has released new Global Internal Audit Standards. Designed to help internal auditors, the revamped standards include strengthened model governance frameworks to improve responsiveness to rapidly changing business environments; guidance helping internal auditors in the public sector and small internal audit functions; a more flexible framework that can adapt to the challenges faced by auditors worldwide; and guidance on cybersecurity. They are effective from January 2025.
The International Federation of Accountants (IFAC) has announced plans to revise its International Education Standards (IES) to increase their focus on sustainability reporting and assurance competence. IFAC will launch a public consultation on proposed revisions to the standards in Q2 2024. ‘It encourages professional accountants to… enhance their sustainability knowledge and expertise,’ said (now former) IFAC CEO Kevin Dancey.
IFAC has, as a result, released a literature review to provide insights on how the global accountancy profession delivers relevant and reliable sustainability reporting. Its Educating Accountants for a Sustainable Future: A Literature Review of Competencies, Educational Strategies, and Challenges for Sustainability Reporting and Assurance review will identify new and existing sustainability-focused competencies.
The International Sustainability Standards Board (ISSB) has published amendments to its Sustainability Accounting Standards Board (SASB) standards focused on specific sectors, to enhance their international applicability. The changes are intended to help preparers apply SASB standards, regardless of jurisdictions and local generally accepted accounting principles (GAAP).
The Global Reporting Initiative (GRI) has released two new sectoral standards, effective from 1 January, for coal and agriculture, aquaculture and fishing. GRI 12 tells coal organisations how to disclose how they address transitioning to a low-carbon economy; and GRI 13 refers to how food organisations report on biodiversity, food security, community engagement, animal welfare, soil health and pesticide use.
The International Auditing and Assurance Standards Board (IAASB) has launched a consultation on proposed changes to its standards to bring them closer to guidance from the International Ethics Standards Board for Accountants (IESBA). They would align definitions and requirements in IAASB standards with new definitions for publicly traded and public interest entities in the IESBA code, for example. They would also heighten expectations regarding audits of public interest entities (PIE).
IESBA has approved its draft Ethics and Independence Standards for Sustainability Reporting and Assurance and a final Ethics Standard for Tax Planning and Related Services. The draft will contain standards for all sustainability assurance practitioners regardless of whether they are professional accountants.
The International Accounting Standards Board (IASB) is considering advice from its SME Implementation Group (SMEIG) to amend its IFRS for SMEs Accounting Standard to ease their operation by smaller businesses. This includes excluding requirements for topics not considered relevant to SMEs. By contrast, the IASB is considering applying full IFRS to supplier finance arrangements and lack of exchangeability issues within its SME standard.
The European Financial Reporting Action Group (EFRAG) called on SMEs and partners to field-test forthcoming drafts on a voluntary sustainability reporting standard for non-listed SMEs (VSME) and European Sustainability Reporting Standards (ESRS) for listed SMEs (ESRS LSME). The drafts were approved in November and December, respectively, and final drafts were released in January 2024. The field test will run in parallel to the public consultation, which is open to all stakeholders for comment until May 2024.
The International Organisation of Securities Commissions (IOSCO) has released recommendations on Accounting for Goodwill, designed to enhance the reliability, faithful representation and transparency of recording and disclosing this key asset. It stresses that goodwill should not be assessed ‘in excess of its recoverable amount, that impairment losses should be recognised in a timely manner, and that disclosures of significant judgements and key assumptions related to the recoverability be transparent’.
IOSCO has also released recommendations to address market integrity and investor protection concerns from decentralised finance (DeFi) systems, recommending greater consistency of regulatory frameworks and oversight in member jurisdictions.
Watch on-demand sessions from ACCA’s virtual conference ‘Accounting for the Future’, including ‘Preparing for sustainability reporting’ and ‘Ethical dilemmas in an era of sustainability reporting’. All the sessions offer free CPD units.
See also ACCA’s latest report Sustainability reporting: the guide to preparation