Advisory Council to Discuss Post-COVID-19 Workplan
The IFRS Advisory Council held discussions this week on an on-site workplan for the global accounting rulemaker to adopt after the COVID-19 restrictions have lifted. COVID-19 social distancing restrictions could ease by August 31, and work-from-home mandates lifted at the IASB’s London headquarters by September 1 this year, according to the group’s agenda paper, “The Future of Work Optimising Collaboration, Concentration and Culture (3Cs) in a Post-Covid-19 World.” The advisory workplan discussions come as vaccines has been developed for COVID-19, thereby enabling social distancing mandates to be lifted. But a number of companies and organizations are considering what will be the new normal; some have signaled they may change to hybrid home-office approaches to save overhead costs of office space and equipment rentals. If approved, the workplan would begin to be implemented in July, according to the agenda paper. The paper points to the organization’s work experience in 2020 as revealing. It showed that the output of the organization has continued; its day-to-day running as well as its overall governance have continued; new people have continued to join, with “13% of our total staff have never seen the office.”
Board Refutes Critics on Reporting Proposal
GASB has issued a fact sheet refuting naysayers’ views that its June 2020 proposal on financial reports would enable governments to mislead the public about their real financial health. The proposal would not allow governments to ignore their long-term debt nor would the short-term focus mislead taxpayers, the board said. “Information on long-term liabilities, such as debt and pension obligations, as well as capital assets and other longer-term assets, clearly are visible in the government-wide financial statements,” the fact sheet states. Under the proposal, all financial statements, notes, and schedules in the model would need to be examined as a package to develop a clear and complete picture of complex government finances. “The availability of both long-run and short-run information supports a thorough understanding of a government’s financial status and performance. Drawing conclusions exclusively from the governmental funds produces an incomplete picture,” the fact sheet states. The document comes at a time when board critics have argued that governments’ official financial statements often do not reflect reality because they follow “cash-based” accounting principles, and that GASB’s proposals would enable those practices to continue.
Guide Explains ESG Reporting and Attestation
The Center for Audit Quality (CAQ) and the Association of International Certified Professional Accountants published a roadmap related to environmental, social, and governance (ESG) reporting and attestation. ESG reporting is not required, but many companies—especially large public companies—have been providing some ESG data for investors, usually using standards set by private organizations. Of those companies, some have voluntarily engaged auditors to perform assurance on the ESG information. This trend is likely to continue because investors are increasingly incorporating ESG reports in their investing and voting decisions. Moreover, the Biden administration has made climate change risk a policy agenda priority. The guide says that companies are trying to figure out what ESG information to report and where and how that information should be disclosed. The roadmap includes tools to help external auditors inform their clients’ approach to ESG reporting. It also helps their clients determine whether they should get an attestation. “ESG is a rapidly evolving area of reporting, and while there is no one-size-fits-all approach, independent auditors have an important role as this reporting continues to take shape,” Dennis McGowan, senior director of the CAQ’s Professional Practice, said in a statement. “The auditing profession is steeped in bringing accountability, standards-based analysis and objectivity to the review of company-reported information—and these skills are transferable to these other areas of company-reported information like ESG data.”