AUDIT & ACCOUNTING
FRC publishes latest accountancy and audit facts and trends report
The FRC has published the 21st edition of its Key Facts and Trends (KFAT) report, providing the latest statistical information and trends on the UK accountancy and audit profession. This year's report highlights continued growth in accountancy membership, with nearly 400,000 members now in the UK and Republic of Ireland, up 2.1% on the previous year. However, the number of accountancy students fell by 3.5% in 2022 to just over 155,000.
FRC consults on revisions to Ethical Standard for Auditors
The FRC has issued a consultation on revisions to the FRC’s Ethical Standard. The proposed revisions include withdrawal of the Other Entities of Public Interest (OEPI) category, enhanced prohibitions where an audit firm’s independence could be threatened and other changes to reflect relevant findings from audit inspections and enforcement cases. The changes are also designed to ensure that the UK standard is no less stringent that the international (IESBA) code.
Draft Statement of Recommended Practice Accounting by Limited Liability Partnerships
The draft LLPs SORP has been updated in response to stakeholder feedback received as part of the 2021 LLPs SORP consultation. On consideration of the feedback, the LLPs SORP Steering Group is proposing to add guidance for the following areas; Amounts payable to former members, sharing of group profits – interests in subsidiaries and Automatic division of profits to members who do not provide any services to the LLP. It is proposed that the updated SORP would be effective for periods commencing on or after 1 January 2024.
FRC welcomes new corporate reporting requirements
The FRC welcomes the publication of a draft statutory instrument on corporate reporting, which strengthens reporting requirements. The new requirements will apply to very large companies (with at least 750 employees and an annual turnover of £750 million or more) and introduce:
- an annual Resilience Statement, setting out how a company is managing risk and building or maintaining resilience over the short, medium, and long term
- a triennial Audit and Assurance Policy Statement, explaining how the company proposes to assure non-financial reporting over the following three years as well as an annual update on the implementation of the policy;
- an annual statement about distributable profits and the company’s policy on distributions; and
- an annual statement on steps taken to prevent and detect material fraud.
Implementation is subject to parliamentary approval and not expected until 2025.
FRC thematic review examines quality of climate-related metrics and targets disclosures
The FRC has published a thematic review, assessing the quality and maturity of climate-related metrics and targets disclosures. The review analysed TCFD disclosures from 20 companies' 2022 annual reports across four sectors: materials and buildings, energy, banks, and asset managers. It identified areas of better reporting practice as well as opportunities for improvement.
UK Sustainability Disclosure TAC issues call for evidence
The FRC, in its role as The Secretariat to the UK Sustainability Disclosure Technical Advisory Committee, has issued a call for evidence to inform the proposed endorsement of the IFRS Sustainability Disclosure Standards in the UK. The International Sustainability Standards Board (ISSB) published IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures in June 2023.
IAASB launches consultation on proposed global sustainability standard
The International Auditing and Assurance Standards Board (IAASB) issued its proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. The proposed ISSA 5000 is a principles-based, overarching standard suitable for both limited and reasonable assurance engagements on sustainability information reported across any sustainability topic.
Seven situations that require a practising certificate
The ICAEW has issued guidance on seven situations where a practicing certificate will be required under new guidance applying from 1 January 2024 but where accountants might not think that this is the case.
IAEW CRF issues new factsheet on 2023 GAAP Accounts
The Corporate Reporting Faculty has issued a new helpsheet - 2023 GAAP Accounts. The factsheet deals primarily with requirements that are mandatory for accounting periods beginning on or after 1 January 2023.
At the same time the Faculty has also issued an updated version of its helpsheet 2022 GAAP Accounts. This updated factsheet highlights new and modified requirements and includes practical tips on the implications of the changes.
HMRC’s approach to Research and Development tax reliefs
HMRC has published details on their compliance approach to Research and Development tax reliefs. To read more, please click here.
HMRC guidance on changes to reporting income from self employment and partnerships
HMRC has published a new guidance page on how to report profit on the return for 2023/24 if the self-employed or partnership business accounting year does not end on or between 31 March to 5 April. To read more, please click here.
On 29 August 2023 HMRC will be launching an online form for submitting requests for details about overlap relief. This will provide an easier way for businesses and agents to submit requests and make sure that these are dealt with separately from general post. To read more, please click here.