Due Process Handbook to be Updated to Reflect ISSB’s Role
The IFRS Foundation plans to update its Due Process Handbook to reflect the establishment of the International Sustainability Standards Board (ISSB) and describe how it is to function, according to October 17 discussions among the trustees. The update is not a comprehensive exercise but focuses on revisions that reflect the ISSB in newer areas that were not in mind when the Handbook was last updated in 2020, members of the foundation’s Due Process Oversight Committee said. To date, only a few amendments have been spotted for the ISSB’s work, and these all relate to the SASB Standards, a notion not contemplated in the Handbook. Overall, the revised Handbook will remain flexible in terms of the ISSB’s operations, the discussions indicated. By remaining flexible, future changes can easily be incorporated, including in the way the ISSB collaborates with sister board the International Accounting Standards Board (IASB), which has been developing IFRS Accounting Standards for decades, growing in recent years to serve about 140 jurisdictions worldwide.
Do Major New Accounting Rules Take too Long to be Developed?
The IASB’s oversight committee said on October 17 that the board adequately followed due process in the development of a new standard on presentation of financial statements, but some questioned why it took almost a decade to be completed. Efforts to develop IFRS 18, Presentation and Disclosure in Financial Statements, started in 2014 on the board’s research agenda; its aim was to replace IAS 1, Presentation of Financial Statements, and improve communication in financial statements, with a focus on information included in the statement of profit or loss. “In reflection, we have to appreciate that putting out a standard that seeks to bring more robustness and clarity by limiting options as to how companies structure their income statement, does have an enormous effect particularly in jurisdictions where they are prescribed forms,” IASB Andreas Barckow said, amid other remarks. “We had to understand the issues and try to seek solutions and that actually has added time to it—it’s the outreach that we had to do … it’s the board papers, our re-discussion, our reshaping of the new formulations and the testing again with jurisdictions and that necessarily takes time,” he said. “Could we have shortened that? Well with hindsight we may have cut it short a bit, but I would be very much surprised if we could have shortened it. I think that is the inevitable price that we are living up to our promise that we want to serve 140 plus jurisdictions.” IRFS 18 is expected to be issued during next year’s second quarter but the standard will not take effect until 2027. Miscellaneous issues still need to be discussed in the coming months, the board has said.
Accounting Firms Had Strong Fiscal 2022, but Number of Accounting Majors Dropped Sharply.
Accounting firms had a good fiscal 2022 with median growth rate of 9.1% in net revenue over fiscal 2021, according to a 2023 survey by AICPA & CIMA. This rate eclipses the 4.2% growth rate from two years ago, when firms were struggling with the immediate effects of the COVID-19 pandemic. The survey results were published on Oct. 11. The AICPA’s Private Companies Practice Section (PCPS) and CPA.com undertake a benchmarking survey every two years; 1,117 U.S. accounting firms participated in this latest edition. The AICPA looked at several key performance indicators of public accounting firms. “Our data shows accounting practices taking steps to improve entry-level pay and firm culture, with some firms, for example, reducing chargeable billing hours for their staffs,” Lisa Simpson, AICPA & CIMA’s vice president of firm services, said in a statement. “We’re also seeing strong revenue growth in service areas beyond traditional tax and audit areas, such as client advisory services and business valuation. A sharper focus on business model transformation continues to make the profession more attractive as a career.”