IFRS Taxonomy Staff Seeking Public Input on Mapping ESG Disclosure Rules

On May 26, the IFRS Taxonomy staff said they are seeking public comments on what would be a future sustainability disclosure taxonomy for submitting digitized financial reports. The IFRS Sustainability Disclosure Taxonomy would be a counterpart to the IFRS Accounting Taxonomy, developed to enable extraction and analysis of financial information provided “when entities apply presentation and disclosure requirements in IFRS Accounting Standards issued by the IASB,” according to a draft of the taxonomy. The taxonomy allows financial information to be digitally identified, exchanged, and compared across time and between companies. A tagged number, for example, could inform a computer that the number represents ‘Scope 1 greenhouse gas emissions’, in metric tonnes of CO2 equivalent, for the year 2022, measured in accordance with the Greenhouse Gas Protocol Corporate Standard, and disclosed by an entity applying IFRS Sustainability Disclosure Standards for ABC Company. Comments are due by September 30.

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Refreshed Agenda Items are ‘Oldies but Goodies’

Early reaction to the PCAOB’s new standards-setting and research agendas has been positive. “I just thought this was a good agenda,” said Daniel Goelzer, who was a founding member of the PCAOB  when it was established by the Sarbanes-Oxley Act of 2002; he later served as acting chairman.  “But I also thought there was a bit of an aspect—and it’s probably a good thing—of back to the future, stuff that had been worked on or discussed in the past. It seemed to be dead but is now coming back to life. Confirmations is one thing I would put in that heading; interim standards is the other one.” Under the predecessor chair, William Duhnke, the board’s rulemaking agenda was fairly limited, with few standards-setting activities. Now, the board has 12 projects. Six are on the short-term standard-setting agenda: other auditors, quality control (QC), noncompliance with laws and regulations (NOCLAR), attestation standards, going concern, and confirmations. Four are on the mid-term standard-setting agenda: substantive analytical procedures, fraud, interim ethics and independence standards, and interim standards. Two are on the research agenda: data and technology and audit evidence. And most of them were at one time or another on the agendas or discussed during advisory group meetings. The agendas, which were unveiled in early May 2022, reflect the priorities of the new board members, particularly PCAOB Chair Erica Williams.

Chief Economist Nayantara Hensel to Depart

The PCAOB said that Chief Economist Nayantara Hensel will leave the organization on July 1. She has also headed up the PCAOB’s Office of Economic and Risk Analysis (OERA). Michael Gurbutt has been appointed OERA acting director, effective immediately, the board announced. Hensel became PCAOB’s chief economist and OERA director in June 2019 under former board chairman William Duhnke. “Nayantara has led our organization in building upon our capabilities related to rigorous economic analysis, which is a vital component of our oversight,” said PCAOB Chair Erica Williams in a statement. “Our thanks to Nayantara for her leadership and contributions over the past three years, and we wish her well in her future endeavors.” The PCAOB said that Gurbutt was the senior adviser to the program leader in the Center for Economic Analysis. The center was combined in 2017 with the former Office of Research and Analysis to create OERA. He joined the PCAOB in 2010 in the Office of the Chief Auditor. “For more than a dozen years, Mike Gurbutt has specialized in the development and post-implementation analysis of PCAOB standards,” added Chair Williams. “We are fortunate to have Mike lead our Office of Economic and Risk Analysis in this moment of transition.”