Newswire November 2022

AUDIT & ACCOUNTING

Amendments to FRS100

The FRC has published a revised version of FRS100 to update the guidance it includes on the interpretation of equivalence, reflecting changes to company law and decisions on equivalence following the UK’s exit from the European Union. This revised guidance is effective immediately, and may prove useful for companies considering whether they can take advantage of reporting exemptions arising from having a parent company located overseas.

FRC sets out principles for public interest test

The FRC has published a set of principles that it will use to assess whether the public interest is best served by carrying out regulatory, supervisory and enforcement work that is outside of its primary regulatory perimeter as it transitions to the Audit, Reporting and Governance Authority (ARGA).

FRC report finds improvements in Corporate Governance reporting but many still falling short

The FRC has published its Annual Review of Corporate Governance Reporting which found an improvement in the quality of reporting against the UK Corporate Governance Code. FRC has seen year-on-year improvements in reporting, and importantly more companies are disclosing the areas within the Code that they have chosen to explain rather than comply. However, the report also found that too few companies are providing meaningful explanations.

FRC publishes Annual Review of Corporate Reporting

The FRC’s has published its Annual Review of Corporate Reporting for which it performed 252 reviews of companies’ accounts. While the overall quality of corporate reporting within the FTSE 350 had been maintained, 27 companies were required to restate aspects of their accounts. The FRC was disappointed to find errors in cash flow statements, an area where both companies and their auditors must improve. The review also identified scope for improvement in reporting on financial instruments and deferred tax assets.

Latest edition of Audit News now available

The ICAEW has published the latest edition of Audit News (No. 72 – November 2022) which includes guidance on a number of topical areas including quality management in audit firms and the new registration requirements for PIE audits.

CHARITIES

Update on investment guidance following Butler-Sloss case

Commenting on the decision the Charity Commission for England & Wales have stated that the judgment offers welcome clarification of how existing legal principles should be interpreted by trustees in a modern context, but that it does not fundamentally alter those principles. They go on to confirm that charities can continue to rely on the legal position in their published guidance Charities and investment matters: a guide for trustees (CC14) when making investment decisions.

ANTI-MONEY LAUNDERING

Economic Crime and Corporate Transparency Bill 2022: Factsheets

The Government have published a number of factsheets giving details of the different measures contained in the Economic Crime and Corporate Transparency Bill. These include:

• Economic Crime and Corporate Transparency Bill overarching
• The role and powers of the Registrar of Companies
• Identity verification and authorised corporate service providers

It also includes factsheets on plans to change financial reporting requirements, removing some of the exemptions available to small and micro entities when filing their accounts.

Amendment to Schedule of high-risk third countries

The Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 3) Regulations 2022 were made on 14 November and came into force the following day. They amend Schedule 3ZA to the Money Laundering Regulations 2017 to remove Nicaragua and Pakistan and to add the Democratic Republic of Congo, Mozambique and Tanzania.

Further changes to the sanctions against Russia

The Russia (Sanctions) (EU Exit) (Amendment) (No. 15) Regulations 2022 were laid before parliament on 28th October and largely came into force the following day. The Regulations extend the sanctions against Russia in a number of areas including make loans available to Russian owned companies and the supply of goods or services critical to the Russian economy.

Businesses not complying with money laundering regulations

HMRC have published details of all businesses they regulate which have not complied with the Money Laundering Regulations for the 2021-22 year. The information published includes the business name, a description of the breach and specific regulations involved and the penalty amount.

OFSI issue general licence to permit the payment of legal fees to designated persons

Due to the increasing number of businesses and individuals being designated as part of the sanctions against Russia and Belarus, and a corresponding increase in the number of requests for a licence from OFSI for the payment of legal fees, OFSI has issued a general licence  on 28 October 2022 to permit the payment of legal fees owed by individuals and entities designated under either of these regimes.

Pension Schemes Newsletter 144

HMRC have issued a new newsletter which includes details of requesting a refund from Pension Schemes Services. 

Agent Update 102

HMRC have issued a new update which contains articles on a variety of topics including preparing for the new tax year basis - Income Tax Self Assessment.