Latest developments in professional accounting and corporate governance October

Australian petroleum resource rent tax
The Australian Accounting Standards Board (AASB) has released a draft interpretation on accounting for Australian petroleum resource rent tax. Members are invited to submit their comments to CPA Australia.

Proposed IFRS for small and medium-sized entities
In a submission to the International Accounting Standards Board (IASB) and the AASB, CPA Australia has commented on the exposure draft of a Proposed IFRS for small and medium-sized entities.

Financial reporting by unlisted public companies
The introduction of a differential reporting regime was supported in a submission to the Department of Treasury on the discussion paper Financial reporting by unlisted public companies.

Key decisions at recent AASB meeting September 2007
The AASB held its board meeting on 5 and 6 September 2007. Matters which were considered included GAAP/GFS harmonisation, insurance contracts, differential reporting, superannuation entities, interpretations, not-for-profit entities, and presentation of financial statements.

The AASBs next meeting will be held jointly with the New Zealand Financial Reporting Standards Board on 3 and 4 October in Sydney. Some of the board meetings papers and the agenda will be made available on the AASB website.

World attention to be drawn to accountants
Recently, CPA Australia and the two other major accounting bodies hosted a board meeting of the International Federation of Accountants (IFAC) in Melbourne.

On Wednesday 12 September the profession discussed with the board issues such as IFRS for SMEs, anti-money laundering and the skills shortage. A presentation made on Thursday 13 September highlighted the role and function of the Financial Reporting Council, AASB and the Accounting Professional and Ethical Standards Board (APESB), as well as the issues around professional standards legislation.

2007 is IFAC's 30^th anniversary year, which is marked by its declaration of December 2 8 as World Accountancy Week.

The week aims to: raise awareness of the role of the international accountancy profession and the contributions it makes to economic development and social well-being worldwide; enhance the attractiveness of the accountancy profession; encourage greater financial and management accountability by governments worldwide; and communicate key initiatives taken by IFAC, its independent standard-setting boards, members, and firms to strengthen the accountancy profession and protect the public interest.

Roundtable on proposed differential reporting notes available
The AASB held two roundtables in Melbourne and Sydney on Thursday 16 August and Friday 24 August. ITC 12 Request for comment on a proposed revised differential reporting regime for Australia and IASB exposure draft of a proposed IFRS for small and medium-sized entities was discussed with various constituents. Notes from the roundtables are available on the AASBs website.

Joint arrangements and hedge accounting
Exposure draft ED 9 Joint arrangements was released by the IASB on Thursday 13 September 2007.

It is proposed to be a replacement standard to IAS 31 Interests in joint ventures and it will also supersede SIC-13 Jointly controlled entities non-monetary contributions by venturers.

The IASB also proposed amendments to IAS 39 Financial instruments: recognition and measurement exposures qualifying for hedge accounting. Comments are also requested by Friday 11 January 2008.

Meeting of the Financial Reporting Council
The 42^nd meeting of the Financial Reporting Council was held on Wednesday 5 September in Melbourne.

Ethics and professional standards

Comment on a new exposure draft
The APESB has released an exposure draft for comment. The proposed standard APES 205 Conformity with accounting standards will supersede APS 1 Conformity with accounting standards and UIG consensus views.

Members are invited to comment on the exposure drafts by emailing CPA Australia.

Forthcoming APESB meeting
The next APESB meeting will be held on Tuesday 13 November. It will be the boards final meeting for the year. The agenda will be available in due course on its website.

Members are able to attend the meeting but must register on the APESB website prior to 13 November.

Audit and assurance

Outcomes of recent AUASB meeting September 2007
The Audit and Assurance Standards Board (AUASB) held its 26^th meeting on Monday 10 September.

The AUASB approved ASRE 2400 Standard on review engagements and a bulletin on small and medium sized entities audits for immediate exposure.

The board also approved a guidance statement on the audit implications of prudential reporting requirements [GS 004 Audit implications of prudential reporting requirements for general insurers (revision of AGS 1064)]. Release of the guidance statement is dependent on the passing of related legislation.

Upcoming IAASB Board meeting: 24 28 September 2007
The IAASB will be meeting between Monday 24 and Friday 28 September in Madrid, Spain.

Reminder from the AUASB
The AUASB has issued a reminder to all auditors that the new Australian auditing standards apply for reporting periods starting on or after 1 July 2006.

Have your say on proposed changes to the standard on review engagements
Members are urged to submit their comments on exposure draft ASRE 2400 Review of financial reports and other historical information, issued by the AUASB.

AUASB bulletin on audits of SMEs
A bulletin on the audits of small and medium sized entities (SMEs) was released by the AUASB in response to issues identified by constituents in the AUASB discussion paper Auditing small and medium sized entities, issued in March 2007.

Corporate governance

Report finds directors' interests cover all
An Australian-first report into how company directors rank employees, shareholders and other stakeholders, shows that Australian directors prioritise shareholders only slightly over employees, distinguishing them from their US counterparts.

John Purcell, CPA Australia policy adviser corporate regulation, says while the research highlights a clear consensus among directors that the law of directors' duties allows consideration of interests other than shareholders, CPA Australia believes that this does not necessarily translate to a positive obligation to consider wider stakeholder interests.

Application of the revised corporate governance principles
The ASX Corporate Governance Councils revised Corporate governance principles and recommendations will be effective from the first financial year commencing on or after 1 January 2008.

While there are no wholesale revisions, it is recommended that practitioners become familiar with the differences between the revised edition and the original version.

Corporate social responsibility

National greenhouse and energy reporting bill
The National Greenhouse and Energy Reporting Bill (2007) has been welcomed by CPA Australia as a vital precursor to the introduction of an emissions trading scheme.

The bill establishes a single, national framework for reporting greenhouse gas emissions, abatement actions and energy consumption and production by corporations from 1 July 2008.

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