In brief

The UK Endorsement Board (UKEB) has published its 2022/23 Regulatory Strategy for consultation. The UKEB’s work is focused on influencing the development and adoption of high-quality financial reporting standards that promote the UK public good by ensuring transparency and comparability of financial information, and the smooth functioning of capital markets.

The financial year 2022/23 will see the UKEB maintaining its focus on those aspects of the IASB agenda that are of highest priority to UK stakeholders whilst continuing to establish the processes needed to reinforce its ability to achieve its strategic objectives and deliver on its statutory functions.

UKEB Chair, Pauline Wallace, said: “2021 was a momentous inaugural year for the UKEB with the recruitment of the secretariat and the appointment of the Board, culminating in the delegation of our statutory responsibilities in May. Since then we have achieved a significant amount , including the publication of our first major Draft Endorsement Criteria Assessment on IFRS 17 ‘Insurance Contracts’, the development of a draft Due Process Handbook, which will be published for consultation shortly, and the establishment of our influencing and thought leadership strategies.

There is still much to do, but we have put in place solid foundations that we can build on and we look forward to continuing to ensure that the UK is seen as a thought leader and key influencer in international financial reporting.”

The 2022/23 Regulatory Strategy consultation will run until 1 March 2022. Respondents should submit their comments to UKEndorsementBoard@endorsement-board.uk by that date.

For operational reasons, the UKEB’s 2022/23 budget is incorporated within the FRC 3-Year Plan, which is being published for consultation at the same time.

A memorandum of understanding (MOU) renewal has been signed between ACCA (the Association of Chartered Certified Accountants) and The IIA (the Institute of Internal Auditors).

The three-year agreement will further strengthen and extend the current cooperation agreement and allows both bodies to continue to work closely together to advance their respective professions.

The MOU was signed by ACCA’s chief executive Helen Brand OBE and The IIA president and chief executive Anthony Pugliese, CIA, CPA, CGMA, CITP. Under the terms of the agreement, ACCA and The IIA will focus on advancing the careers of members, enhancing governance practices and serving the public interest.

Anthony Pugliese, president and chief executive officer of The IIA, said: ‘This MOU builds on an already strong working relationship with ACCA. We look forward to our ongoing collaboration together. Internal audit plays a vital role in providing the independent, internal assurance that supports all types of external disclosures, so our global organisations represent complementary functions in many areas.’

The organisations will cooperate on research and thought leadership on topics such as diversity, governance, cybersecurity and ESG (environmental, social and governance). Both organisations are collaborating on a Professional Insights report to be released in 2022.

Professional chartered accountancy bodies, ICAEW and CIPFA, have announced that they are in talks to explore the potential of closer working.

The vision driving the discussions would see ICAEW and CIPFA combining their strengths and resources to better equip them to serve the public interest across all areas of economic activity, including the enterprise, public and third sectors.

In a joint statement, the ICAEW’s Chief Executive Michael Izza and CIPFA’s chief executive Rob Whiteman said:

“We believe there is significant strategic benefit in our two bodies working more closely in the future and our discussions will examine ways of achieving that.”

ICAEW and CIPFA will now conduct further discussions with the aim of bringing forward proposals in 2022.

Any outcome to these discussions will be subject to approval within the Institutes, as appropriate and necessary under their respective governance requirements, and by key external stakeholders including the UK Government, the Privy Council and other regulators.

The Institute of Chartered Accountants in England and Wales (ICAEW) regulatory board has appointed Philip Nicol-Gent as its new chair.

The ICAEW Regulatory Board (IRB) is an independent board responsible for oversight of the regulatory and disciplinary work undertaken by ICAEW’s Professional Standards Department, to ensure it is carried out in the public interest.

Nicol-Gent will begin his role with immediate effect following the resignation of Jenny Watson CBE, who has stepped down for unforeseen personal reasons after just two months in post.

The appointment of Nicol-Gent was approved by the Regulatory and Conduct Appointments Committee.

Commenting on his appointment, Nicol-Gent said: "I am looking forward to my time as Chair of the IRB. The public interest has been at the heart of the Board's deliberations. As changes across the accountancy sector unfold over the coming months, we will make sure the IRB plays a central role and ensures that the public interest is reflected in that work.”

Outgoing chair of the IRB Jenny Watson said: “I’m sorry to have had to stand aside from this role but delighted to hear that the Regulatory and Conduct Appointments Committee has asked Philip to succeed me. I know he will do an excellent job and I send him and the IRB my good wishes for the future.”

The Office for Standards in Education, Children’s Services and Skills (Ofsted) awarded CIPFA a “Good” rating for the apprenticeships it provides. The rating follows CIPFA’s first full inspection by Ofsted in November 2021.

Ofsted’s report highlighted many of CIPFA’s “very strong commitment to responsible stewardship of public money” which reinforces CIPFA’s belief that good public financial management is key to changing people's lives for the better.
The inspectors also noted that there was a sense of pride among students and employers in being associated with CIPFA, and how the relationship between the three parties was very effective.

The report said: “Work-based learning coaches provide good support to apprentices to help pace them through their studies. Coaches liaise effectively with employers to make sure that over the course of the programme, apprentices gain broad and relevant experience, linked to what they learn.”

Sarah Shreeves, Head of Training Services at CIPFA, said: “We are thrilled with this rating, as it should give employers the confidence that CIPFA provides a high-quality learning environment. Our focus on building good relationships with employers and students has always been important, and we’re delighted this has been recognised by Ofsted.”

Drew Cullen, Policy and Membership Director at CIPFA, said: “This is a tremendous endorsement that shows CIPFA delivers genuine impact for students and their employers. This result is a testament to the commitment and expertise of everyone in our team – from apprentice support staff through to trainers, the leadership team and work based learning coaches.”

Erica William has been sworn in as the chair of the US’ Public Accounting Oversight Board (PCAOB). The US’ Securities and Exchange Commission (SEC) conducted the swearing-in ceremony virtually.

Appointed by the SEC on November 8, 2021, Williams’ initial term will run through October 24, 2024.

Williams joins the PCAOB from Kirkland & Ellis LLP, where she was a litigation partner. She previously served as a special assistant and associate counsel to President Barack Obama, advising the president and his senior advisors on legal and constitutional issues involving economic policy, financial regulation and reform, financial technology, trade, intellectual property, and data protection and privacy.

Commenting on her appointment, Williams said: “In our dynamic and evolving capital markets, the PCAOB’s mission to protect investors and further the public interest is extremely important. I am honored to take up this mission and to lead this organization’s dedicated, talented staff. Together, we have an extraordinary opportunity to build trust through robust oversight and engagement.

Andrew Harding, FCMA, CGMA,Chief Executive, The Association of International Certified Professional Accountants, representing AICPA & CIMA comments:

‘’We welcome the publication of the Integrated Thinking Principles Prototype by the Value Reporting Foundation. We are particularly pleased to see that the business model framework concept is at the heart of the Principles, especially considering the growing focus on ESG and sustainability in corporate decision-making and reporting. Now more than ever, it is essential that accounting and finance professionals work in an integrated manner, and support their organisations in rethinking how they create value for all stakeholders. The Integrated Thinking Principles will help organisations reach this goal and will be a good complement our soon-to-be-published updated Global Management Accounting Principles, enabling corporate reporting to stay fit for purpose.”

The trustees of the IFRS Foundation have appointed Emmanuel Faber to serve as the inaugural chair of the International Sustainability Standards Board (ISSB), effective 1 January 2022.

The appointment follows the announcement at COP26 in November about the creation of the ISSB; the consolidation of the Climate Disclosure Standards Board and the Value Reporting Foundation (which houses the Integrated Reporting Framework and the SASB Standards) into the IFRS Foundation; and the publication of prototype general disclosures and climate disclosure requirements developed by the Technical Readiness Working Group.

The ISSB will work in close cooperation with the International Accounting Standards Board (IASB) to ensure connectivity and compatibility between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards.

IFRS Foundation Trustees chair Erkki Liikanen said: Emmanuel Faber has been a long-term proponent of companies factoring sustainability matters into their strategy and in their reporting to the markets. His global leadership skills and drive make him the ideal inaugural ISSB Chair to lead the development of standards to meet investors’ demand for information about climate and other sustainability matters.

Faber said: Investors are demanding high quality, globally comparable sustainability information on which to make informed investment decisions. The ISSB represents a once-in-a-generation opportunity to fulfil that need in a fast-changing world, where climate in particular will drive major shifts in the coming years.

We should move diligently and build on the great momentum resulting from the formation of the ISSB at COP26. I’m excited about the opportunity to work with stakeholders across the world in developing ESG standards that inform global capital allocations, market prices and cost of capital, working alongside the IASB.

The appointment of Faber, which is for an initial three-year term, is supported by the IFRS Foundation Monitoring Board, which oversees various aspects of the governance of the IFRS Foundation.

Zena Hanks, partner in the Private Wealth team at Saffery Champness, comments on the state of affairs:

“HMRC have done the decent thing and recognised that the continued pandemic disruption is affecting many individuals’ ability to get their returns completed on time. It’s better late than never but, like last year, HMRC have cut it close to the wire meaning it will be of little help to many, but welcomed by those that are yet to file their annual self assessment tax return. More than half have already filed, while those taking advantage of the extension will still face interest charges. Just be aware that filing your tax return late does extend the window within which HMRC can open an enquiry.”

“Up until very recently HMRC was still saying it had no plans to grant taxpayers an extension for this year’s Self Assessment returns, but it seems the mounting pressures and disruption caused by the surge in Omicron cases seems to have finally hit home.”

ClientEarth lawyers have warned the world’s Big Four audit firms that they are failing to fulfil audit standards and their core legal duties by not considering climate risk, threatening the integrity of the market and leaving them open to legal challenge.

In letters to PwC, KPMG, Deloitte and EY, the lawyers stress that there is little evidence that any of the firms are taking climate risk into account when reviewing company financial statements, despite existing requirements to do so.

Analysis of the 2020 financial statements and audit reports of more than 100 carbon-intensive companies by Carbon Tracker and the Carbon Accounting Project found that 80% of auditors provided no clear indication of whether, or how, they had considered material climate-related matters.

ClientEarth lawyers are now putting the Big Four on notice, warning that their insufficient audit practices put them at risk of breaching legal requirements and investor expectations and are starkly at odds with their own public climate commitments.