IAASA’s Annual Audit Programme and Activity Report
IAASA published its Annual Audit Programme and Activity (AAPA) Report which provides a summary of the activity performed by IAASA during 2021 in its role to oversee the audit profession in Ireland. The AAPA Report provides useful insights into IAASA’s work in overseeing the audit profession in Ireland and will be of valuable use to audit committee members seeking an enhanced understanding of audit and its regulation. IAASA AAPA report can be found here.
IAASA’s quality assurance review of audit firms that audit PIEs
IAASA published its 2021 quality assurance review (QAR) reports for each of the audit firms who audit public interest entities (PIEs). The reports identify findings and recommendations made by IAASA to the audit firms along with the results of the audit firms' inspections. The QAR reports for each of the audit firms can be found here.
IAASA Standards newsletter
IAASA published its first standards newsletter, which provides the latest news and information about IAASA’s auditing and assurance projects. The first edition of the newsletter is available here.
Annual survey of inspection findings
IAASA published the IFIAR’s survey of inspection findings. In general, there is a downward trend in inspection findings of the six largest global audit firms inspections, with the inspection findings generally in the area of auditing accounting estimates, internal control testing, adequacy of financial statement presentation and disclosure, revenue recognition and audit sampling. The IFIAR report can be found here.
Modern slavery reporting practices in the UK
The FRC published its research on modern slavery which identified inadequacies in the quality of many companies' modern slavery reporting and recommended that boardrooms need to do more to eradicate modern slavery. The review suggests that modern slavery considerations are not a mainstream concern for many companies, and they should provide more information on the effectiveness of their policies. The FRC review can be found here.
Audit Firm Governance Code
The FRC published a new Audit Firm Governance Code for the Big Four audit firms, audit firms that audit FTSE-350 companies and those which audit at least 20 PIEs. Those that audit less than 20 PIEs and no FTSE-350 companies are encouraged to adopt the code. The FRC suggest that the new code will strengthen oversight of the UK's largest audit firms and help to ensure that audit quality is prioritised. The FRC code can be found here.
Auditors' climate-related reporting responsibilities
The FRC published Staff Guidance on the auditor's responsibilities with respect to climate-related reporting, including Streamlined Energy and Carbon Reporting (‘SECR’) by companies. The staff guidance note is useful for UK premium listed companies as it explains the auditor's responsibility with respect to their climate-related disclosures. The Staff guidance note can be found here.
Companies (Corporate Enforcement Authority) Act 2021
The Act was signed into law in December 2021 and its primary purpose is to transform the Office of the Director of Corporate Enforcement into a statutory and independent agency. The agency will be known as the Corporate Enforcement Authority (CEA). The commencement order for this act is still outstanding. The Companies (Corporate Enforcement Authority) Act is available here.
Irish Corporate Governance (Gender Balance) Bill 2022
The Bill provides for the regulation of gender balance on the boards and governing councils of corporate bodies and for gender quotas to be introduced at the boardroom level. It will require all corporate bodies to have 33% of each gender on their boards within a year of the commencement of the legislation and 40% within three years. ‘Corporate bodies’ will include: Limited Companies, Designated Activity Companies, PLC’s, Companies Limited by Guarantee, Unlimited Companies, Charities, Collective asset-management vehicles, UCITS and all state-sponsored bodies of Ireland and their prominent subsidiaries, including all statutory corporations. The Bill is available here.
UK FCA – Diversity and inclusion on company boards and executive committees
The FCA have introduced new listing rules for issuers listed on the London stock exchange (LR 9.8.6R(9) and LR 14.3.33R(1)) which will require issuers in scope to include a statement in their annual financial report as to whether they have met specific diversity targets on a comply or explain basis. The rules are effective for financial years beginning on or after 1 April 2022. The FCA policy is available here PS22/3: Diversity and inclusion on company boards and executive management (fca.org.uk)
ESG in 2022
KPMG Ireland Sustainable Future team discuss the emphasis on ESG over the last number of years and how they expect the trend to continue through 2022 and beyond. KPMG Ireland Sustainable Futures team have identified 7 key themes for Irish companies to focus on for the year ahead. Read ESG in 2022 here.
Renewable energy key to Irish climate action
KPMG Ireland Sustainable Future team discuss why renewable energy is the key to ensuring the decarbonisation of the energy and electricity sector in Ireland and how businesses can seek out opportunities to decarbonise and ultimately benefit from lower operating costs. Read the full article here.
CBI – the importance of effective governance, culture and agility in a changing environment
The Central Bank of Ireland (CBI) noted the importance of effective governance, culture, and agility in a changing environment in a speech delivered by the CBI’s Director General for Financial Conduct. Noting the need for regulators and regulated firms to prepare effectively for “predictable surprises”, the CBIs speech focused on: (i) ensuring effective governance through accountability; (ii) the structural changes in the Irish retail banking sector; and (iii) sustainable finance, disclosure, and transparency. Read the speech here.
UCITS side-pocketing arrangements for Russian, Belarusian and Ukrainian assets
The Central Bank has issued a notice of intention to permit, subject to specific conditions, a UCITS to implement a side pocket arrangement only for Russian, Belarusian and Ukrainian assets that are directly and/or indirectly impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia’s invasion of Ukraine. Read the full notice here.
Active Central Bank consultations
There is currently no active Central Bank consultation. The list of closed Central Bank consultations can be accessed here.