As climate-related commitments have become a focus for many stakeholders, many governments and entities around the world are setting their net-zero targets. Therefore, questions have been asked about how they impact financial reporting under Accounting Standards, specifically, if and when they result in the recognition of a liability. Considering that, recently, the IFRS Interpretations Committee has discussed climate-related commitments based on a specific scenario and published an agenda decision in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. This edition of Accounting and Auditing Update (AAU) discusses this topic and highlights the need for companies to carefully evaluate their net-zero commitments to determine the appropriate financial reporting actions based on the example discussed in the agenda decision.
The recent corporate failures throughout the world have highlighted the benefits of clarifying and enhancing the role of auditors in responding to fraud and suspected fraud as a means of enhancing public trust in financial reporting. There has been increased scrutiny throughout the financial reporting system with greater emphasis on auditor’s role. With fraud being the focus, the International Auditing and Assurance Standards Board (IAASB) has initiated revisions to the existing ISA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statement, through an Exposure Draft (ED). The proposals aim to clarify the auditor’s responsibilities about fraud in the financial statement audits, strengthen audit procedures and enhance auditor's report on this matter. The article on this topic provides an overview of the proposals in the exposure draft.
As is the case each month, we have also included a regular round-up of some recent regulatory updates.
We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of AAU.
For more information on this update, please write to aaupdate@kpmg.com.
