Accountants and auditors join forces to promote profession in Uzbekistan

Two Uzbekistan professional bodies, the COA and the NAAAU, together with the ACCA have announced that they are working together to improve accountancy services for the country. 

The memorandum of understanding (MOU) promotes co-operation between the three parties, advances the interests of the members of the three bodies and promotes the accountancy and audit professions in the central Asian country. The MOU – which initially runs for three years – will promote international standards in accounting and auditing. 

ACCA head of Central Asia, Zhanna Iskenova, said, “By sharing its global experience ACCA is looking forward to supporting the COA and the NAAAU achieve their objectives of developing locally recognised national accounting and audit qualifications that meet the highest professional standards and appropriate regulatory requirements.” 

The three bodies will also look at working on capacity building projects. 

COA chair, Nematulla Karimov, said: “The signing of the MOU is the next stage of the integration of the Chamber of Auditors of Uzbekistan into the international community. Thanks to this MOU, we get an excellent opportunity to work in many areas for the development of the profession of accountancy and auditing in our country. At the same time, the professional community and the younger generation are also given the opportunity to confirm their qualifications at the international level. We look forward to working with ACCA and NAAAU to promote our respective qualifications in the Republic.” 

ACCA, the COA and the NAAAU will work towards mutual recognition of each other’s exams in accordance with their respective exemption and accreditation policies. 

NAAAU chief council, Minovar Tulakhodjaeva, concluded: “The memorandum is aimed at solving one of the key areas of our joint work – the implementation of continuous professional development (CPD) initiatives, such as jointly hosting webinars and we look forward to starting those. We will also explore and create new pathways for accountants and auditors of Uzbekistan to obtain an education based on internationally recognised standards and contribute towards their career growth.” 

Chancellor calls for FCA inquiry into debanking

Chancellor Jeremy Hunt has called for an inquiry from the UK’s financial regulator, the Financial Conduct Authority, to urgently investigate whether banks are involved in barring politicians from accounts on a widespread basis, known as the ‘debanking’ of politicians.  The FCA’s CEO, Nikhil Rahti responded stating it was unclear how widespread a practice it was but said the regulator had been looking at the data. 

The Chancellor said that everyone must be able to express their opinion and must also have access to banking, which comes after former UKIP leader, Nigel Farage, had his account shut down by private bank Coutts over his ‘values’, as well as a number of other PEPs (Politically Exposed Persons). 

The FCA is asking banks to provide the number of terminated accounts and reasons for them, as well as information on account applications that are refused, and would provide an update by mid-September, as an increase in account terminations have been evidenced, however, this could relate to anti-money laundering legislation. 

Encompass Corporation co-founder and CEO, Wayne Johnson, commented: “As the Chancellor calls for an urgent investigation into whether banks are going against regulations by ‘debanking’ for unlawful reasons, this underlines that it is more critical now than ever for financial institutions to utilise technology-driven processes to ensure they are acting based on facts, presented by live, authoritative publicly available data. This will ensure they are not only mitigating risk and keeping up with regulatory demands, but are able to do so most efficiently. 

“Banks are navigating an increasingly complex regulatory landscape. Critically, technology exists to establish a customer’s identity, which can provide real-time profiles, generated on demand, to validate and verify a company, while providing a full audit trail. This allows banks to evidence compliance, preserving reputation with a robust Know Your Customer (KYC) process, while also streamlining these processes for optimum business outcomes.”

ACCA comments on interest rate rise

Commenting on the Bank of England’s most recent interest rate rise, ACCA UK head of technical and strategic engagement, Glenn Collins, said: “ACCA members are finding that obtaining sustainable sources of finance are increasingly difficult and time consuming. Many businesses are resorting to non-sustainable sources –  such as expensive overdrafts or even using owners’ credit cards. This will be a concern if it continues, especially given today’s decision by the Bank of England  to raise interest rates. 

“Companies fail because they run out of cash not necessarily because they are unprofitable. Recently company insolvencies jumped to their highest level since January 2019. This just underlines the importance of businesses proactively seeking finance before the crisis hits.” 

ACCA UK chief economist, Jonathan Ashworth, further added: “The Bank of England raised interest rates by a quarter point to 5.25% – the highest since early 2008. There was a three-way split on the Monetary Policy Committee. Six members voted for a quarter point rise, two voted for a half point hike, while one continued to opt for unchanged policy. 

“The committee noted that the current monetary policy stance was restrictive and suggested that future decisions would depend on developments in the data. With inflation still elevated, the labour market tight, and underlying wage growth at record rates, the risk is for further monetary tightening at coming meetings.”

FASB seeks public comment on disclosures proposal

The Financial Accounting Standards Board (FASB) has published a proposed Accounting Standards Update (ASU) intended to provide investors with more decision-useful information about a public business entity’s expenses. Stakeholders are encouraged to review and provide comment on the proposal by 30 October 2023. 

Commenting on this, FASB chair, Rich Jones, said: “Feedback from investors on our 2021 Agenda Consultation provided us with a fresh approach to providing more detailed information about a company’s expenses, which investors have said is critically important to understanding a company’s performance, assessing its prospects for future cash flows, and comparing its performance over time and with that of other companies. 

“As a result, less than 18 months after revising the scope of the project, we’ve issued this proposed standard that would require companies to provide more information about specific expenses in the notes to financial statements.” 

The proposed ASU would require public companies to provide detailed disclosure of specified categories underlying certain expense captions in interim and annual periods. It would provide investors with more detailed information about the types of expenses, including employee compensation, depreciation, amortisation, and costs incurred related to inventory and manufacturing activities in income statement expense captions such as cost of sales; selling, general and administrative; and research and development. 
 
The amendments in the proposed ASU do not change or remove existing expense disclosure requirements and do not change requirements for presentation of expenses on the face of the income statement. They would require public companies to include certain existing disclosures in the same tabular format disclosure as the other disaggregation requirements set forth in the proposed ASU.

IESBA publishes interactive 2022 annual report 

The International Ethics Standards Board for Accountants (IESBA) has released its 2022 Annual Report, ‘Reinforcing Ethics and the Public Interest in a Rapidly Evolving World.

The digitally interactive report looks back at 2022 through the eyes of the international ethics standard-setting board, complete with detailed reports on the Board’s projects alongside reflective remarks from its leaders. 

The report showcases a board in transition, completing long-running projects aimed at further strengthening the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code), addressing the ethical implications of rapid technological advances, and moving fast to develop the necessary ethics and independence standards for sustainability reporting and assurance, always working to serve the public interest. 

Commenting on this, IESBA chair, Gabriela Figueiredo Dias, said: “IESBA’s work in 2022 will ultimately strengthen the public’s trust in the professional accountant, corporate reporting and businesses more generally at a time of rapid change and complexity. 

“Collectively, we’ve ensured the necessary strategic adjustments to better serve the public interest in a context of complex developments that we face today, like sustainability and technology, through our actions to enhance our global ethics and independence standards, thereby raising the bar for ethical conduct and practice for all professional accountants and other service providers that may want to use our standards.” 

Beyond the updates on IESBA projects, the 2022 IESBA Report features an overview of the Board’s extensive stakeholder outreach efforts and information about its efforts to promote global adoption and effective implementation of the Code. The Report also includes a message from the IESBA’s consultative advisory group (CAG) chair, Gaylen Hansen.

AICPA & CIMA launch new climate resilience accounting resource

AICPA & CIMA, together as the Association of International Certified Professional Accountants, have launched Accounting for Climate Resilience – a new online educational brief designed to help finance professionals build their sustainability literacy so they can lead and support the journeys of their organisations, firms, and clients as they adapt business models and operations in response to increasing climate-related risks. The resource’s launch highlights the important role professional accountants have to play in this context. 

Accounting for Climate Resilience is the last in a series of four interactive “Accounting for” briefs focused on sustainability and business. The series is part of AICPA & CIMA’s continued commitment to provide all accounting and finance professionals with the resources, tools, and skills they need to support the transition to more responsible business practices, and place long-term value creation at the heart of corporate activities and reporting. 

AICPA & CIMA associate technical director, Martin Farrar, said: “Finance professionals are at the heart of business and therefore are well-placed to help create resilient business models and implement strategies for organisational sustainability in a changing world. They have connections within the business and can join the dots with stakeholders outside the business to start conversations about what resilience looks like in relation to the risks posed by the climate emergency.” 

AICPA & CIMA global head of ESG, Jeremy Osborn, concluded: “With their skills and knowledge, finance professionals can provide insights into organisational governance, strategy, risk management, and performance to support sustainable decision-making built on sound business analysis and assurance of both financial and non-financial information, including sustainability-related data. They are ideally placed to support climate scenario development and build this into organisational adaptation plans.”

ISSB consults on proposed digital taxonomy

A common digital taxonomy is necessary to facilitate structured digital reporting of sustainability-related financial information prepared applying the ISSB Standards, which will improve the global accessibility and comparability of sustainability information for investors.  

The ISSB has been working on its digital taxonomy in tandem with the development of IFRS S1 and IFRS S2 to facilitate digital consumption of sustainability-related financial disclosures when its Standards are first applied.  

The ISSB is seeking feedback on the proposals over a 60-day consultation period closing on 26 September 2023. The ISSB will review feedback on the proposals in the second half of 2023 and aims to issue the final digital taxonomy early in 2024, subject to the feedback received.  

Commenting on this, ISSB chair, Emmanuel Faber, said: “Investors increasingly consume information digitally, therefore it’s important that we facilitate digital consumption of sustainability-related financial information.  

“Our proposed digital taxonomy is designed to make it easier for investors to extract, compare and analyse the information companies provide.”  

The IFRS Sustainability Disclosure Taxonomy will play the same role as the IFRS Accounting Taxonomy in enabling digital tagging of information required by the IFRS Standards. These taxonomies differ from taxonomies established by jurisdictions to classify economic activities as environmentally sustainable.  

The ISSB is engaging with stakeholders to explore ways the IFRS Sustainability Disclosure Taxonomy could be used to enhance interoperability with other sustainability-related requirements.

Data chief set to leave PCAOB

The Public Company Accounting Oversight Board (PCAOB) has announced that chief Information and data officer, Eric Hagopian, will leave the PCAOB after more than four years of service.

PCAOB Office of Data, Security, and Technology deputy director of architecture and engineering, Evan Lee, has been named acting chief information officer effective upon Hagopian’s departure. 

Hagopian joined the PCAOB in February 2019 and was later named the PCAOB’s first chief information and data officer in June 2019. During his tenure, the PCAOB made crucial technological advances through the adoption of new collaboration tools, stronger analytical capabilities, better mobility and networking, and enhanced security. These capabilities proved instrumental in helping the PCAOB address challenges related to recent developments, such as the COVID-19 pandemic and the PCAOB’s first-ever inspections of registered public accounting firms headquartered in mainland China and Hong Kong

Commenting on this, PCAOB chair, Erica Williams, said: “In his time with us, Eric has always brought a tremendous spirit of technological innovation and leadership, and we thank him for his service. 

“We are fortunate to have someone with Evan’s experience and expertise step into this important role.” 

Commenting on his departure, Hagopian said: “It has been an honor to advance the use of data, develop systems, and modernise technology that helped the PCAOB effectively carry out its investor-protection mission”