aia_nov06
TRANSCRIPT
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An Overview of IAASA
Presentation to AIA Members
Westbury Hotel, Dublin
21st November, 200
IAASAMi!"ael #avana$", Hea% of &inan!ial 'e(ortin$ Su(ervision
)ileen *ownsen%, Pro+e!t Mana$er
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Presentation Overview
- A .rief History an% t"e 200 A!t
- IAASA .oar% an% #ey Staff
- IAASA &un!tions an% &un%in$
- Su(ervision of t"e Pres!ribe% A!!ountan!y .o%ies
- &inan!ial 'e(ortin$ Su(ervision
- *"e &uture of finan!ial re(ortin$ in Irelan%
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A .rief History
- 'eview rou( on Au%itin$ 2000 3 *erms of referen!e in!lu%e% ane4amination of
5 w"et"er self re$ulation of t"e a!!ountan!y (rofession was wor6in$effe!tively an% !onsistently7
5 au%itor in%e(en%en!e7 an%
5 role of t"e au%itor in ensurin$ !om(anies8 !om(lian!e wit" law an%re$ulations
- 'A re!ommen%ations in!lu%e%
5 establis"ment of an Oversi$"t bo%y7
5 &inan!ial re(ortin$ review fun!tion7 an%
5 re9uirement for Dire!tors8 :om(lian!e Statements;
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*"e 200 A!t
- 'A8s re!ommen%ations $iven t"e for!e of law by t"e :om(aniesAu%itin$ an% A!!ountin$ A!t, 200;
- *"e 200 A!t %eals (rin!i(ally wit"=
5 t"e establis"ment of IAASA7 an%
5 >Other Measures to Strengthen the Regulation of Auditors8, in!lu%in$=
- statutory ba!6in$ for a!!ountin$ stan%ar%s7
- au%it !ommittees7- %is!losure of a!!ountin$ (oli!ies7
- %is!losure of au%itors8 remuneration analyse% by au%it, au%it relate% an% non3au%it7 an%
- Dire!tors8 :om(lian!e Statements;
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IAASA .oar%- :om(any ?t%; by $uarantee 3 .oar% !om(rises 1< %ire!tors, nominate% t"us=
5 2 in!lu%in$ t"e :"air(erson nominate% by t"e Minister7
5 nominate% +ointly by t"e (res!ribe% a!!ountan!y bo%ies7
5 @ nominate% by t"e followin$ bo%ies 1 ea!"=
- I.): I:*
- IAIM IS)
- Pensions .oar% I&S'A
- 'evenue D:)
- ?aw So!iety
5 :"ief )4e!utive
- A ma4imum of < of t"e 1< %ire!tors may be members of (res!ribe%a!!ountan!y bo%ies;
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IAASA3 6ey staff
- Chief Executive 5 Ian Drennan
- Head of Financial Reporting Supervision 5 Mi!"ael #avana$"
- Head of Regulatory & Monitoring Supervision 5 Helen Hall
- Secretary & Head of Legal Services 5 Cane Mee"an
- Project anager 5 )ileen *ownsen%
- Project anager 5 .ri%$et 'yan
- Finance & !dinistration anager 5 &er$al O8.riain
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Statutory 'emit S
1; *o su(ervise "ow t"e (res!ribe% a!!ountan!y bo%ies re$ulate an%monitor t"eir members7
2; *o (romote a%"eren!e to "i$" (rofessional stan%ar%s in t"e au%itin$
E a!!ountan!y (rofession7; *o monitor w"et"er t"e a!!ounts of !ertain !lasses of !om(anies
an% ot"er un%erta6in$s !om(ly wit" t"e :om(anies A!ts an%, w"erea((li!able, Arti!le / of t"e IAS 'e$ulation Freferen!e to I&'Sinserte% by S;I; No; 11 of 200
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&un!tions- *"e Aut"ority8s (rin!i(al fun!tions in!lu%e=
5 Promotin$ a%"eren!e to t"e "i$"est stan%ar%s in t"e (rofession7
5 :onsi%erin$ a((li!ations for re!o$nition for au%it (ur(oses7
5 Su(ervisin$ t"e manner in w"i!" t"e a!!ountan!y bo%ies monitor in!lu%in$ wor69uality an% re$ulate in!lu%in$ investi$ation an% %is!i(linary fun!tions t"eirmembers7
5 W"ere %eeme% a((ro(riate, !on%u!tin$ investi$ations into bo%ies an%or members;
5 :o3o(eratin$ in t"e %evelo(ment of au%itin$ an% et"i!al stan%ar%s;
5 'eviewin$ t"e finan!ial statements of !ertain !om(anies an% ot"er un%erta6in$s7
5 :o3o(eratin$ in t"e %evelo(ment of a!!ountin$ stan%ar%s an% (ra!ti!e notes;
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&un%in$
*wo as(e!ts to fun%in$ 5
Day to %ay o(eration of IAASA
3 /0 )4!"e9uer
3 0 Pres!ribe% a!!ountan!y bo%ies
'eserve &un%
3 20 )4!"e9uer
3 0 Pres!ribe% a!!ountan!y bo%ies
3
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)4!"e9uer E Pres!ribe% .o%ies
:ontribution 3 200- *otal bu%$et 5 200= J2;2@Bm, (rovi%e% t"us=
5 )4!"e9uer @1@,000
5 I:AI B
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies
- Prin!i(al ob+e!t=
1a 3 K to su(ervise "ow t"e (res!ribe%a!!ountan!y bo%ies re$ulate an% monitor t"eir
membersL
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies
- IAASA as >Su(ervisor8 rat"er t"an
>'e$ulator8
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies
- @ Pres!ribe% .o%ies
5 'e!o$nise% .o%ies
- A::A, I:A)W, I:AI, I:AS, I:PAI, IIPA
5 Pres!ribe% .o%ies
- AIA, :IMA, :IP&A
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies- !pproval Function
5 rant re!o$nition
5 Atta!" !on%itions to re!o$nition
5 A((rove t"e !onstitution E bye3laws,
investi$ation E %is!i(linary (ro!e%ures E
stan%ar%s, E also any amen%ments
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies- Supervisory Function
5 su(ervise "ow ea!" re!o$nise% bo%y monitors its
members 5 su(ervise t"e investi$ation E %is!i(linary (ro!e%ures
of ea!" (res!ribe% a!!ountan!y bo%y
5 re9uire e4(lanations about t"e (erforman!e ofre$ulatory an% monitorin$ %uties
5 !on%u!t section 25 reviews of members of re!o$nise%a!!ountan!y bo%ies, if %eeme% a((ro(riate
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%ies
- "nvestigation#Enforceent Function 5 !on%u!t en9uiries into !om(lian!e wit"
a((rove% IED (ro!e%ures S; 2
5 un%erta6e investi$ations into (ossible brea!"esof a!!ountan!y bo%y stan%ar%s by a member S;2/
5 im(ose san!tions on a bo%ymember
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%iesPrescri$ed %ody Revies
- n%erta6in$ %etaile% reviews of ea!" (res!ribe% bo%y
- )m("asis of reviews is on see6in$ to ensure a%"eren!e to
a !ommon "i$" stan%ar% of re$ulatory a!tivity from w"i!"
t"e (ubli! !an %erive !omfort
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%iesPrescri$ed %ody Revies 'cont()
- &in%in$s are !onfi%ential
- &in%in$s of reviews an% !om(laints re!eive% willim(a!t on=
5 *"e Aut"ority8s ris6 assessment E sele!tion
met"o%olo$ies 5 t"e s!o(e an% fre9uen!y of future reviews
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Su(ervision of t"e Pres!ribe%
A!!ountan!y .o%iesPrescri$ed %ody Revies 'cont()
- Initial reviews "ave / main areas of fo!us=
1; $overnan!e an% its im(a!t on t"e re$ulationof members7
2; systems for monitorin$ members7
; !om(laints "an%lin$, investi$ative,%is!i(linary an% a((eals (ro!e%ures7 an%
/; li!ensin$ E re$istration of members;
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1; overnan!e an% its Im(a!t on t"e
'e$ulation of Members- ain an un%erstan%in$ of t"e :or(orate overnan!e of t"e
bo%y, in!lu%in$ its=
5 or$anisational stru!ture
5 lin6 between t"e $overnin$ bo%y E :ommittees7
5 :ommittees8 wor6in$ met"o%s E (ro!e%ures7
5 lin6 between t"e :ommittees an% t"e uality Assuran!e
an% Se!retariat fun!tions;
- 'eviews of :ommittees8 minutes an% atten%an!e at meetin$sas observers;
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2; System for Monitorin$ Members
5 assessment of t"e resour!in$ of t"e monitorin$
fun!tion, bot" "uman an% finan!ial7
5 >s"a%owin$8 of bo%ies8 ins(e!tion staff on
sele!te% visits7 an%
5 members8 !om(lian!e wit" ot"er obli$ations
e;$; PII, :PD;
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/; ?i!ensin$ an% 'e$istration
- ain an un%erstan%in$ of t"e (ro!e%ures for=
5 issuan!e, renewal, sus(ension an% revo!ation ofli!ensesaut"orisations
to allow membersmember firms to en$a$e in
(ubli! (ra!ti!e an% to (rovi%e an au%it servi!e;
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&urt"er Develo(ments
- *"e revise% ) t" :om(any ?aw Dire!tive
5 *rans(osition into %omesti! le$islation by mi%200
5 All member states s"oul% establis" (ubli!oversi$"t systems
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Ot"er Wor6 On$oin$
- AP.
- )AO.
-I&IA'
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Ot"er Wor6 On$oin$
- A((rovals for amen%ments to
:onstitution.ye3laws et!;
- :om(laints)n9uiries
- Annual 'e(orts to t"e Aut"ority
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&inan!ial 'e(ortin$ Su(ervision
&un!tion
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Prin!i(al &un!tions of &inan!ial
'e(ortin$ Su(ervision nit- *o monitor w"et"er t"e a!!ounts of !ertain !lasses of !om(anies an% ot"er
un%erta6in$s !om(ly wit" t"e :om(anies A!ts an% IAS 'e$ulation
- :o3o(eratin$ in t"e %evelo(ment of a!!ountin$ stan%ar%s an% (ra!ti!e notes
- Assistin$ t"e .oar% to %is!"ar$e its fun!tions as an a%visor to t"e Minister ona!!ountin$ relate% matters
- ?iaisin$ wit" ot"er !ountries8 finan!ial re(ortin$ monitorin$ bo%ies
- Develo(in$ (oli!y re$ar%in$ t"e im(osition of levies on t"e Aut"ority8s
finan!ial statement su(ervision !onstituen!y
- I%entifyin$, an% maintainin$ un%er review, t"e !om(osition of t"e Aut"ority8sfinan!ial statement review !onstituen!y
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Monitoring hether the financial
stateents of certain copanies coply
ith the Copanies !cts
- Se!tion 2 of t"e 200 A!t
- *"e IAS 'e$ulation
- *"e *rans(aren!y Dire!tive
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:om(lian!e wit" t"e :om(anies
A!ts an% t"e IAS 'e$ulation:om(lian!e wit" :om(anies A!ts in!lu%es 3
5 (res!ribe% formats7
5 statutory %is!losure re9uirements7
5 a%"eren!e to >a((li!able a!!ountin$ stan%ar%s8
5(rimarily IAS. an% AS. stan%ar%s
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Section *+ of the *,,- !ct
- *"e finan!ial re(ortin$ su(ervision !onstituen!y !om(rises=
5 all (l!s w"et"er liste% or not7
5 all subsi%iary un%erta6in$s of (l!s7
5 all (rivate !om(anies limite% by s"ares t"at, in bot" in t"e relevant finan!ial year
an% t"e imme%iately (re!e%in$ finan!ial year, satisfy t"e followin$ !riteria=
- balan!e s"eet total e4!ee%s J2
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'elevant )4em(tions
- A!t (rovi%es (otential e4em(tions for=
- !ertain entities alrea%y sub+e!t to, w"at in t"e Minister8s o(inion,
is an a((ro(riate level of su(ervisionre$ulation
3 mi$"t, for e4am(le, in!lu%e Part III !om(anies an% :I*S
- S110 *:A 8@B entities se!uritisation ve"i!les;
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IAS 'e$ulation
- iven effe!t to in Irelan% by SI 11 of 200
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*rans(aren!y Dire!tive
- Arti!le 2//" of t"e *rans(aren!y Dire!tive
K*DL=
* +..to e,amine that information referred to in this -irective is dra%n up in accordance %ith the relevant
reporting frame%ork and take appropriate measures in
case of discovered infringements.
- Dire!tive %eals wit" Interim &inan!ial Statements w"i!"
are not wit"in t"e s!o(e of Se!tion 2;
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Met"o%olo$y for sele!tion of
entity for review
- S2 IAS 'e$ulation *rans(aren!y Dire!tive su$$ests a
(roa!tive rat"er t"an rea!tive a((roa!" to monitorin$
- Met"o%olo$y for ris6 assessment an% sele!tion of entities
finan!ial statements for review "as been %evelo(e%
- Mi4e% mo%el a((roa!" (ro(ose%
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Met"o%olo$y for sele!tion of entity
for review- :riteria for sele!tion will in!lu%e
5 'is6 of material misstatement in t"e finan!ial
statements
5 Potential im(a!t on users of finan!ial statements in t"e
event of material misstatement
5 Su((lemente% wit" ran%om sele!tion of &S for review
5 :om(laint from (ubli! may also tri$$er a review
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Met"o%olo$y for sele!tion of entity
for review- 'is6 of material misstatement in t"e finan!ial statements 5
fa!tors in!lu%e=
3 finan!ial stru!ture an% business tren%s,3 finan!ial (osition an% ratios,
3 in%ustry s(e!ifi! issues,
3 !or(orate $overnan!e issues an% internal !ontrol environment,
3 relate% (arty transa!tions,
3 in!i%en!e of business !ombinations an% %is(osals,
3 au%it 9ualifi!ations an% relate% issues,
3 a%ministrative, !ourt an% re$ulatory a!tions,
3 t"ir% (arty si$nals e;$; !om(laints re!eive% by t"e Aut"ority, (ress
re(orta$e et!;
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Met"o%olo$y for sele!tion of entity
for review- Potential im(a!t on users users in!lu%e=
3 (resent an% (otential investors7
3 s"are"ol%ers73 em(loyees7
3 len%ers7
3 su((liers an% ot"er tra%e !re%itors7
3 !ustomers7
3 t"e 'evenue :ommissioners7
3 re$ulatory aut"orities7
3 t"e $eneral (ubli!
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Met"o%olo$y for sele!tion of entity
for review- Potential im(a!t on users 5 fa!tors in!lu%e=
3 Number, an% nature of, retail investors
3 Sie of un%erta6in$ in!lu%in$ number of em(loyees,3 Publi! (rofile,
3 In%ustry (rofile,
3 W"et"er t"e s"ares or ot"er se!urities of t"e un%erta6in$ are tra%e%on a (ubli! sto!6 e4!"an$e; &or t"ose
un%erta6in$s t"at "ave se!urities tra%e% on a (ubli! sto!6 e4!"an$e t"e
followin$ will be !onsi%ere% 3 5 S"are tra%in$ a!tivity an% volatility in sto!6 (ri!e,
5 Mar6et !a(italisation,
5 Number of investors,
5 Nature of se!urity tra%e%
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S2 enfor!ement re$ime- In !ir!umstan!es w"ere t"ere is, or may be, an issue re$ar%in$ a set of
finan!ial statements8 !om(lian!e wit" t"e :om(anies A!ts or t"e IAS'e$ulation, an% t"ose finan!ial statements "ave been=
5 %isseminate% to members in a%van!e of t"e AM7 or
5 lai% before t"e AM7 or
5 %elivere% to t"e 'e$istrar
t"e Aut"ority may $ive noti!e to t"e %ire!tors of t"e entity !on!erne%;
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S2 enfor!ement re$ime
- *"e aforementione% noti!e must s(e!ify=
5 t"e matters in res(e!t of w"i!" it a((ears to t"e Aut"ority t"at a
9uestion of non3!om(lian!e arises7 an%
5 a (erio% of not less t"an 0 %ays in w"i!" t"e %ire!tors are
re9uire% to furnis" t"e Aut"ority wit" an e4(lanation of t"e
finan!ial statements or (re(are revise% finan!ial statements;
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S2 enfor!ement re$ime
- In t"e event t"at, at t"e en% of t"e s(e!ifie% (erio%, t"e %ire!tors "ave
neit"er, in t"e Aut"ority8s o(inion=
5 $iven a satisfa!tory e4(lanation
5 nor revise% t"e finan!ial statements,
- t"e Aut"ority may a((ly to t"e Hi$" :ourt for a %e!laration of non3
!om(lian!e an% asso!iate% or%ers;
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S2 enfor!ement re$ime
- If, "avin$ !onsi%ere% t"e matter, t"e Hi$" :ourt is satisfie% t"at aninstan!e of non3!om(lian!e e4ists, t"e :ourt may ma6e a %e!larationto t"at effe!t an% may or%er t"e followin$=
5 t"e revision of t"e finan!ial statements an%or %ire!tors8 re(ort7
5 t"e re3au%it of t"e finan!ial statements7
5 t"at t"e %ire!tors ta6e s(e!ifie% ste(s to brin$ t"e :ourt or%er to t"e noti!eof (ersons li6ely to rely on t"e finan!ial statements7
5 t"at t"e Aut"ority8s, an% re(ortin$ entity8s, !osts be awar%e% a$ainst t"e%ire!tors in t"at !onte4t, every (erson w"o was a %ire!tor at t"e time t"efinan!ial statements were a((rove% is !onsi%ere% to "ave been a (arty tot"at a((roval unless s"e !an s"ow t"at t"ey too6 all reasonable ste(s to (revent a((roval se!tion 2@;
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S2 enfor!ement re$ime
- In t"e event of an a((li!ation bein$ ma%e to t"e Hi$" :ourt, t"e
Aut"ority is re9uire% to furnis" t"e :'O wit"=
5 noti!e of t"e a((li!ation7 an%
5 a $eneral statement of t"e matters at issue;
- On t"e !on!lusion of (ro!ee%in$s, t"e Aut"ority is re9uire% to furnis"
t"e :'O wit"=
5 a !o(y of t"e :ourt Or%er7 or
5 noti!e t"at t"e a((li!ation "as faile% or "as been wit"%rawn;
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Liaising ith other countries. financial
reporting onitoring $odies
- IAASA an a!tive (arti!i(ant in )):S )uro(ean )nfor!ement :o3or%ination Sessions 5 sub !ommittee of :)S' 5 mont"ly meetin$s
- )):S 5 &orum for %is!ussin$ an% !o3or%inatin$ Kenfor!ementL%e!isions in )))A
- A %atabase of I&'S enfor!ement %e!isions in t"e )))A "as beenestablis"e% 5 not (re!e%ents but li6ely to be (ersuasive referen!e (oint
- Has been Iris" )):S !ase w"i!" was brou$"t to ) 'oun%table on:onsistent A((li!ation of I&'S
- :)S')):S liasin$ wit" IAS. an% S): on various matters of mutualinterest
- )):S 3 very im(ortant (art of S): an% ) Kroa% ma(L
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/ther financial reporting functions
- Assistin$ t"e .oar% to %is!"ar$e its fun!tions as an a%visorto t"e Minister on a!!ountin$ relate% matters
3 A%vi!e on various matters as "ave arisen
3 Member of :?' an% a%vi!e on (art A of fort"!omin$
:onsoli%ation .ill %ealin$ wit" a!!ountin$ an% au%itin$- :o3o(eratin$ in t"e %evelo(ment of a!!ountin$ stan%ar%s
an% (ra!ti!e notes
3 Iris" Observer at AS. .oar% 5 twi!e mont"ly meetin$s
3 ?iaison wit" IAS.
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Main players involved in
deterining the future of financial
reporting in "reland
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Financial Reporting Revie 4nit
of "!!S!- Prin!i(al fun!tions in!lu%e 5 3 Monitorin$ w"et"er t"e a!!ounts of !ertain !lasses of !om(anies an%
ot"er un%erta6in$s !om(ly wit" t"e :om(anies A!ts7
3 :o3o(eratin$ in t"e %evelo(ment of a!!ountin$ stan%ar%s an% (ra!ti!e
notes7
3 Assistin$ t"e .oar% of IAASA to %is!"ar$e its fun!tions as a%visor to
t"e Minister on a!!ountin$ an% relate% matters7
3 ?iaisin$ wit" ot"er !ountries8 finan!ial re(ortin$ monitorin$ bo%iesan% %evelo(in$ !onta!ts wit" t"ose bo%ies;
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1
5epartent of Enterprise 0rade and
Eployent '5E0E)
andthe European 4nion 'E4)
arious laws relatin$ to a!!ountin$ stan%ar%s
in!lu%in$ (res!ribin$ w"i!" a!!ountin$ stan%ar%ss"oul% be use% by t"e %ifferent !ate$ories of
!om(anies, t"e format of t"ose a!!ounts, an% ot"er
a!!ountin$ relate% ) re$ulations t"at are
trans(ose% into Iris" law by t"e D)*);
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Influen!e of I&'S on #Iris"
AAP
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Main differences $eteen "FRS and
47#"rish 8!!P- Has $een recent convergence to "FRS $y !S% in soe areas2 nota$ly 6
5 &inan!ial instruments
5 S"are3base% (ayments
5 &orei$n !urren!y
- Saple of differences outstanding
5 ?ayout of P? T .S
5 .usiness !ombinations
5 Deferre% ta4
5 Investment (ro(erties
5 A$ri!ulture 5 Pension Obli$ations
5 :as" flow statement man%atory
5 ; an% many more
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<
/ther financial reporting functions
- Assistin$ t"e .oar% to %is!"ar$e its fun!tions as an a%visorto t"e Minister on a!!ountin$ relate% matters
3 A%vi!e on various matters as "ave arisen
3 Member of :?' an% a%vi!e on (art A of fort"!omin$
:onsoli%ation .ill %ealin$ wit" a!!ountin$ an% au%itin$- :o3o(eratin$ in t"e %evelo(ment of a!!ountin$ stan%ar%s
an% (ra!ti!e notes
3 Iris" Observer at AS. .oar% 5 twi!e mont"ly meetin$s
3 ?iaison wit" IAS.
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9hat future for 47#"rish 8!!P:
- As t"e worl% moves towar%s $lobal
a!!ountin$ stan%ar%s 3 W"at is t"e future
role for AS. in settin$ a!!ountin$stan%ar%sU
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B
0he !ccounting Standards %oard
'!S%)- AS. is an o(eratin$ bo%y of t"e # &inan!ial 'e(ortin$
:oun!il &':;
- In Irelan%, AS. stan%ar%s are K(romul$ate%L by t"e I:AI;
- Se!tion /1 of t"e 200 :om(anies A!t 5 Ka!!ountin$stan%ar%s ; issue% by any bo%y or bo%ies (res!ribe%
by re$ulationL; Not yet !ommen!e%;
- A!!ountin$ stan%ar%s res(onsibilities im(a!te% by move toInternational &inan!ial 'e(ortin$ Stan%ar%s I&'S;
- AS. "as !onsulte% on its future role in 200/,200< an%200;
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Future role for !S%1 4"0Fs
- AS. a!6nowle%$es t"at national inter(retations of
a!!ountin$ stan%ar%s s"oul% be rare;
- AS. "as state% t"at t"e International &inan!ial 'e(ortin$
Inter(retations :ommittee I&'I: is t"e a((ro(riate bo%y
to inter(ret I&'S;
- 'ole of r$ent Issues *as6 &or!e I*& un%er review;
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Future role for !S% 6 FRSs#SS!Ps
- AS. sees its role as (rimarily tryin$ to 5 influen!in$ future %ire!tion of IAS. stan%ar%s
R influen!in$ ) (oli!y on a!!ountin$ stan%ar%s, in!lu%in$ t"een%orsement of I&'S
- &uture role in national stan%ar% settin$ mi$"t in!lu%eissuin$ stan%ar%s in relation to 5 )ntity s(e!ifi! issues= for e4am(le, smaller entities
5 Se!tor s(e!ifi! issues= for e4am(le, use of Statements of'e!ommen%e% Pra!ti!e SO'Ps an%
5 Im(rovin$ !ommuni!ation between !om(anies an% investors=narrative re(ortin$ an% t"e O(eratin$ an% &inan!ial 'eview O&';
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B0
!S% convergence policy ith "FRS
- AS. (oli!y= no !ase for maintainin$ %ifferen!es betweent"e (rin!i(les un%erlyin$ Iris"# AAP an% I&'S;
- :onsulte% on !onver$en!e strate$y in 200/= res(onsesin%i!ate% su((ort for ("ase% a((roa!";
- 'es(onses to !onsultation on role in 200< "i$"li$"te%!"an$e of view= 5 P"ase% a((roa!" !om(li!ate%%iffi!ult to im(lement
5 :om(li!ate% I&'S may not be suitable for many !om(anies
5 Await t"e out!ome of t"e IAS. SM) (ro+e!t;
- AS. now (ro(osin$ to move to >bi$ ban$8 !onver$en!efrom 200@
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B1
!S% convergence 6 current proposals
- AS. issue% tentative (ro(osals in May
200 for (ubli! !omment 5
1; All (ubli!ly 9uote% an% ot"er (ubli!ly a!!ountable
!om(anies woul% be re9uire% to a((ly full I&'S;
2; se of t"e &inan!ial 'e(ortin$ Stan%ar% for Smaller
)ntities &'SS) e4ten%e% to in!lu%e me%ium3sie%
entities;
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B2
!S% convergence 6 current proposals
; Subsi%iaries of $rou( !om(anies t"at a((ly full I&'Swoul% also be re9uire% to a((ly full I&'S formeasurement an% re!o$nition, but wit" re%u!e%
%is!losure re9uirements yet to be %etermine%;
/; No %e!ision yet on !om(anies t"at %o not fall in 1, 2 or; Alternatives seem to be=
i e4ten% &'SS) a((li!ation furt"er,
ii a((ly I&'S to more !om(anies,
iii maintain Iris"# AAP for t"em, or
iv some !ombination of i, ii an% iii;
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B
"ssues; hat is pu$lic accounta$ility:
- IAS. %efinition=
KAn entity "as (ubli! a!!ountability if=
a t"ere is a "i$" %e$ree of outsi%e interest in t"e entity from non3
mana$ement investors or ot"er sta6e"ol%ers, an% t"osesta6e"ol%ers %e(en% (rimarily on e4ternal finan!ial re(ortin$ ast"eir means of obtainin$ finan!ial information about t"e entity7 or
b t"e entity "as an essential (ubli! servi!e res(onsibility
be!ause of t"e nature of its o(erations;L
- How to (ut t"is %efinition into o(eration still to be%etermine%;
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B/
"ssues; FRSSE or "!S% SME standard:
- Is it a((ro(riate to a((ly t"e &'SS) to me%ium3
sie% an% (ossibly even lar$er !om(aniesU
- &inal %e!isions will be ma%e w"en t"e out!ome oft"e IAS. SM) (ro+e!t is !learer;
- Possibility t"e ) will also $et involve% in an
SM) (ro+e!tU
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Current hot topics for future
changes in financial reporting
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B
9hat direction are accounting
standards going in:- AS. !onver$en!e wit" IAS. stan%ar%s
- IAS. formal a$reements wit" S &AS. an% Ca(an;
- :onver$en!e roa%ma( between I&'S an% S AAP 5200;
- *"e (otential im(a!t of :"ina an% ot"er emer$in$
e!onomies;
Current hot topics for future
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BB
Current hot topics for future
changes in financial reporting
- &inan!ial Statement (resentation
- &air value measurement
- .usiness !ombinations- 'evenue re!o$nition
- :on!e(tual framewor6
;;; an% many more
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B
Financial Stateent presentation
- :urrent (ro(osals are for (rimary Kfinan!ial statementsL 3
Stateent of FinancialPosition
Stateent of Earningsand Coprehensive"ncoe
Stateent of Cash Flos
%usinessO(eratin$ Assets an% ?iabilities
*reasury Assets
%usinessO(eratin$ In!ome
*reasury In!ome
%usinessO(eratin$ :as" &lows
*reasury :as" &lows
Financing )9uity &inan!in$ ?iabilities
Financing Expenses Financing Cash Flos )9uity Non3e9uity
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Fair value easureent
- *"e ob+e!tive of IAS.&AS. +oint (ro+e!t is to= 5 Define fair value,
5 )stablis" a framewor6 for measurin$ fair value
5 )n"an!e %is!losures about fair value, an%
5 :o%ify e4istin$ fair value measurement $ui%an!e
- :ana%ian DP 5 KMeasurement on initial
re!o$nitionL
- &AS. is nearin$ !om(letion of its (ro+e!t on fair
value measurements
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%usiness co$inations
- Coint IAS.&AS. )D issue% 0 Cune 200< (ro(osin$ ma+or !"an$esto a!9uisition a!!ountin$; &or e4am(le e;$;
- If a!9uirer (ur!"ases less t"an 100 re!o$nise assets an% liabilities
at t"e full amount of t"eir fair values an% $oo%will as t"e %ifferen!e between t"e fair value of t"e a!9uiree, as a w"ole, an% t"e fair value ofassets a!9uire% an% liabilities assume%;
- t"e a!9uirer to a!!ount for a!9uisition3relate% !osts in!urre% in
!onne!tion wit" t"e business !ombination se(arately from t"e business!ombination $enerally as e4(enses;
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Conceptual fraeor
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uestionsU
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:onta!ts E &urt"er Information
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