EU looks to alleviate cyberthreats; IASB publishes proposed taxonomy amendments

The Digital Operational Resilience Act adopted by the European Council is aimed at strengthening the IT security of financial entities, according to a Council press release.

The act will make sure the financial sector in Europe is "able to stay resilient" by helping to prevent and mitigate cyberthreats.

"Thanks to the harmonised legal requirements which we adopted today, our financial sector will be better able to continue to function at all times. If a large-scale attack on the European financial sector is launched, we will be prepared for it," Zbyněk Stanjura, Minister of Finance of the Czech Republic, said in the press release.

IASB publishes proposed taxonomy update

The IASB has published a proposed update to the IFRS Accounting Taxonomy 2022 to reflect two recent amendments to IFRS 16, Leases, and IAS 1, Presentation of Financial Statements.

The taxonomy update includes changes to the IFRS Accounting Taxonomy elements to reflect the new and amended disclosure requirements introduced by these amendments, an IFRS news release said.

All the amendments apply to annual reporting periods beginning on or after 1 January 2024, the report said. Earlier application of the amendments is permitted.

The IASB will analyse the comments on this Proposed IFRS Taxonomy Update and make the necessary amendments, the report said. After approval by the IASB, a final IFRS Taxonomy Update will be published.

The deadline for submitting comments is 28 December. Comments can be submitted online or by email to commentletters@ifrs.org.

IESBA addresses the need for technology-related upskilling

The International Ethics Standards Board for Accountants (IESBA) released its Technology Working Group's final report, IESBA Technology Working Group Final Phase 2 Report.

"The report documents the impacts of disruptive and transformative technologies on the work of professional accountants," an IESBA news release said.

"Professional accountants (PAs) often lack relevant practical experience and knowledge about AI, blockchain (including cryptocurrencies), and data governance to know what type of questions to ask, how to identify specific risks and errors and the related mitigation remedy, and how to assess the reliability of these transformational technologies," the report said.

FRC reports set out expectations for corporate reporting

The UK's Financial Reporting Council (FRC) has published its Review of Stewardship Reporting 2022, which found improvements across multiple areas of stewardship reporting compared to 2021, the FRC said in a news release.

"In 2023, the FRC will place more emphasis in our assessment process on reporting of activities and outcomes," the report said. "For Principles 4 and 7 to 12, reporting should include multiple case studies to evidence the activities undertaken in the reporting year and the outcomes of those."

The FRC also expects to see more examples from larger asset managers than from smaller asset owners, with high-quality, informative case studies expected of all signatories, the report said.

The deadline for applications from asset owners has been extended from 30 April 2023 to 31 May 2023.

The FRC also published a report titled What Makes a Good … Environment for Auditor Scepticism and Challenge. The report will be of particular interest to audit firms, audit committee chairs, and those with an interest in audit quality, an FRC news release said.

Recommendations from that FRC report include making the public interest role of audit as the cornerstone of an audit firm's culture and effective use of specialists, experts, and central technical teams to provide challenge in the most complex areas.

"An ecosystem that enables scepticism and challenge must include an engaged audit committee that supports the audit team with challenge," the report said.

— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.