This week, King Charles III set out bills proposed by the new Labour government to secure economic growth.
“Stability will be the cornerstone of my Government’s economic policy, and every decision will be consistent with its fiscal rules,” the king said in his speech to the UK Parliament.
One proposed reform, laid out by the king, is government legislation to modernise and strengthen regulation in its Draft Audit Reform and Corporate Governance Bill.
UK Financial Reporting Council (FRC) CEO Richard Moriarty welcomed the government’s draft legislation in a news release. “In His Majesty the King’s speech to Parliament … new legislation was announced to strengthen audit and corporate governance to provide investors, employees, and consumers with greater confidence in the health of UK companies,” he said in the release.
“The Draft Audit Reform and Corporate Governance Bill will put the FRC on a statutory footing through the establishment of the Audit, Reporting, and Governance Authority (ARGA),” Moriarty said, which would build on “the FRC’s transformation in recent years into a more robust and effective regulator and its remit to support the UK’s economic growth and international competitiveness”.
IASB issues amendments to reporting standards
The IASB issued narrow amendments to IFRS accounting standards and accompanying guidance as part of its regular maintenance of the standards, a news release said. Amended standards include:
- IFRS 1, First-Time Adoption of International Financial Reporting Standards;
- IFRS 7, Financial Instruments: Disclosures and Its Accompanying Guidance on Implementing IFRS 7;
- IFRS 9, Financial Instruments;
- IFRS 10, Consolidated Financial Statements; and
- IAS 7, Statement of Cash Flows.
The amendments are effective for annual periods beginning on or after 1 January 2026, with earlier application permitted. The publication, Annual Improvements to IFRS Accounting Standards — Volume 11, is available to users with an IFRS Digital subscription.
UKEB seeks stakeholder views on IASB standard
As part of the UK Endorsement Board’s (UKEB’s) endorsement and adoption work, the board is now seeking UK stakeholder views on IFRS 18, Presentation and Disclosure in Financial Statements, a publication said.
The UKEB has launched surveys for UK users and preparers of accounts to gather their views on IFRS 18, the publication said. Stakeholder comments are welcome until 6 September.
IFRS 18 will be effective for annual reporting periods beginning on or after 1 January 2027.
In another publication, the UKEB announced its adoption of Lack of Exchangeability (Amendments to IAS 21), issued by the IASB in August 2023.
IAASB publishes ISA guidance for less complex entities
The International Auditing and Assurance Standards Board (IAASB) released new supplemental guidance on auditor reporting as it relates to the International Standard on Auditing (ISA) for audits of financial statements of less complex entities, known as the ISA for LCE, a news release said.
The new guidance looks to assist auditors about modifications to the auditor’s report when using the standard, the release said. It includes information on using emphasis-of-matter and other-matter paragraphs, reporting on other information, and reporting on a material uncertainty related to going concern.
Also, the guidance features “eight illustrative auditor’s reports, including examples of adverse opinions, disclaimer of opinions, and opinions when there is a material uncertainty related to going concern”, the release said.
The new guidance does not amend or override the ISA for LCE, the text of which alone is authoritative, the release said.
GRI analysis tool sets sustainability targets for companies
The Global Reporting Initiative (GRI) updated its analysis tool to help companies improve business reporting to meet the UN Sustainability Development Goals (SDGs), a news release said.
The updated online database, which was first launched by the GRI in 2017, will enable businesses to develop disclosure targets. According to the release, the online, freely accessible database now includes:
- A range of disclosures, based on recognised international frameworks and standards, such as the GRI standards;
- New research options, allowing access and comparability of information and disclosures; and
- Regular revisions, ensuring up-to-date information.
“While companies are increasingly engaging with the SDGs, voluntary and fragmented reporting practices can lead to incomplete data,” the release said. “This initiative supports a standardised approach to reporting, to better align business practices with … global goals.”
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.