Each month, this section highlights the latest developments in audit and assurance, financial reporting, ethics and professional standards, corporate social responsibility and corporate governance.
Audit and assurance
IAASB: special purpose financial statements
Reports for special purpose audit engagements can, with appropriate amendments, be issued in the form of the illustrative report contained in International Standard on Auditing (ISA) 700, The Independent Auditors Report on a Complete Set of General Purpose Financial Statements, according to comments released by the International Auditing and Assurance Standards Board (IAASB).
Proposed changes to auditor's report
The Financial Reporting Council (FRC) has requested that the Auditing and Assurance Standards Board (AUASB) consider the inclusion in the auditing standards of a statement of International Financial Reporting Standards (IFRSs) compliance in the auditors report.
CPA Australia is supportive of the intent of the proposed change, but has advocated an alternative approach.
Proposed framework and standard on assurance engagements
On behalf of members, CPA Australia sent a submission to the Auditing and Assurance Standards Board on the proposed framework and standard on assurance engagements. Overall, CPA Australia was supportive of the proposal.
IAASB makes further progress on clarity project
The International Auditing and Assurance Standards Board (IAASB), has approved for public comment three exposure drafts related to the clarity project. These exposure drafts have been redrafted in accordance with the IAASB's new drafting conventions designed to enhance the clarity of its pronouncements.
Differential auditing: stakeholders' insights
A discussion paper on differential auditing has been jointly released by CPA Australia and the other professional accounting bodies
This discussion paper was highlighted in a CPA Update article on 23 May 2007.
Financial reporting
AASB May 2007 meeting key decisions
Key decisions from the Australian Accounting Standards Board meeting held from 23 to 25 May 2007.
More accounting options allowed
In April 2007, the AASB reinstated all options which existed under IFRSs in the Australian equivalents to IFRSs. The additional options will apply to annual reporting periods beginning on or after 1 July 2007. Immediate adoption is allowed but the entity will be required to apply the standard in its entirety.
Proposed amendments to AASB 102 Inventories approved
The Australian Accounting Standards Board (AASB) approved the proposed amendments to AASB 102 Inventories held for distribution by not-for-profit entities at the 23-25 May 2007 board meeting.
In a submission to the AASB issued on 15 May 2007, CPA Australia expressed its support for the proposals, with the exception of the transitional provisions.
These submissions were highlighted in a CPA Update article on 29 May 2007.
Adoption of new not-for-profit accounting definition needed
In a submission to the Australian Accounting Standards Board (AASB), CPA Australia has advocated the adoption of a new accounting definition of a not-for-profit entity, to improve the transparency and quality of financial reporting.
The definition was developed following a research survey undertaken by the Graduate School of Management at the University of Western Australia for CPA Australia.
This submission was highlighted in a CPA Update article on 29 May 2007.
Related party disclosures state-controlled entities and the definition of a related party
A CPA Australia submission issued on 25 May 2007, was sent to the International Accounting Standards Board (IASB) and Australian Accounting Standards Board, on the proposed amendments to IAS 24 Related Party Disclosures: State-controlled Entities and the Definition of a Related Party.
Overall, CPA Australia was supportive of the proposals, but encouraged the standard setters to consider extending the proposed amendments to apply to non-state-controlled entities.
Discussion paper fair value measurements
On 4 May 2007, CPA Australia submitted its response to the IASB discussion paper Fair value measurements. CPA Australias response expressed concerns about requiring fair value to be measured only as an exit price.
Release of APES exposure drafts
The Accounting Professional and Ethical Standards Board (APESB) has released two exposure drafts.
APES 305 Terms of engagement, will help ensure clarity between professional accountants and their clients as to the agreed scope of work to be conducted.
APES 110 Code of ethics for professional accountants, which will introduce more rigorous definition around the term network to give confidence of auditor independence.
Further information
For consideration at the August 2007 APESB meeting
The Accounting Professional & Ethical Standards Board (APESB) will consider a number of proposals at its next meeting, to be held in August 2007.
Corporate governance
No latest developments as at 5 June 2007.
Corporate social responsibility
No latest developments as at 5 June 2007.
