Trustees Approve 2021 Budget
Trustees of the Financial Accounting Foundation (FAF), the parent body of the nation’s two main accounting rulemakers, approved its 2021 budget expense of $68.1 million, a 3% increase from 2020. The FAF’s 2021 budget will result in a zero percent increase in accounting support fees for the FASB, but there will an increase of 7% in the accounting support fees for the GASB, which reflect additional staffing relative to the transition of its technical director position, FAF Executive Director John Auchincloss said. Primary drivers for the FAF expense increase include annual salary increases for staff, though senior leadership will not gain increases, Auchincloss said. “We also have built into our 2021 budget reduction in meeting and travel costs due to the COVID-19 pandemic,” he added. FAF stakeholders do not pay 100% of the organization’s recoverable expenses as each year it voluntarily contributes an amount from its reserve funds, which fluctuates based on a number of factors. For 2021, the FAF budgeted a voluntary contribution of $12 million, a slight increase from the 2020 contribution, Auchincloss said.
Former PCAOB Chief Auditor Megan Zietsman Sworn in to Board
On November 20, the PCAOB announced the swearing in of Megan Zietsman, the board’s chief auditor and director of professional standards since early 2019, as a board member. Her term will run through October 2025. The SEC, which oversees the PCAOB, swore Zietsman in virtually. In a statement, Zietsman said she joins the board “with an already strong appreciation for the PCAOB’s mission to protect investors.” “The role we play and our efforts to promote high quality auditing might be more important now than ever before as we live through the COVID-19 pandemic,” said Zietsman. Zietsman’s appointment to the PCAOB follows the departure of James Kaiser, an ex-PricewaterhouseCoopers LLP partner whose term expired in October. Kaiser informed the SEC this summer that he did not want to be considered for another term. Prior to joining the PCAOB, Zietsman was also a partner in Deloitte & Touche LLP’s professional practice network in the United States. She has also served as deputy chair of the International Auditing and Assurance Standards Board (IAASB), and served on the AICPA’s Auditing Standards Board (ASB).
Educational Material on Reporting Climate-Related Matters Published
The IFRS Foundation has published educational material to highlight how existing International Financial Reporting Standards (IFRS) require companies to consider climate-related matters that have a material effect on their financial statements. Information is material if “omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users of financial statements (hereafter, investors) make on the basis of those financial statements, which provide financial information about a specific company,” the document states. For example, information about how management has considered climate-related matters in preparing a company’s financial statements may be material with respect to the most significant judgments and estimates that management has made. The document, “Effects of Climate-Related Matters on Financial Statements,” was developed in response to companies’ request for further information on the topic, the foundation said. “Climate change is a topic in which investors and other IFRS stakeholders are increasingly interested because of its potential effect on companies’ business models, cash flows, financial position and financial performance,” the document states. “Most industries have been, or are likely to be, affected by climate change and efforts to manage its impact. However some companies, industries and activities will be affected more than others.”