Reporting priorities
The European Securities and Markets Authority (ESMA) has published its common enforcement priorities for the 2021 annual financial reports of listed companies. The areas that will come under closer scrutiny are climate-related disclosures, Covid-19 disclosures and expected credit losses. The Irish Auditing and Accounting Supervisory Authority (IAASA) also published a paper with similar themes in September 2021.LPT
Under section 30 of the Finance (Local Property Tax) (Amendment) Act 2021, the 10% local property tax (LPT) surcharge, which is levied for not submitting an LPT return or paying LPT liabilities, is now capped at 50% of a person’s LPT liability. Previously, the surcharge, which is added to a person’s income tax or corporation tax assessment, was capped at the amount of the person’s LPT liability if and when the person became LPT-compliant.
ESEF
IAASA has reminded quoted companies with securities listed on a regulated market that their financial statements for periods beginning on or after 1 January 2021 must be prepared in accordance with the requirements of the European Single Electronic Format (ESEF). Relevant entities need to consider the impact of these requirements on reporting timelines and engage with auditors early. The deadline had been for periods beginning on or after 1 January 2020, but this was extended to 2021 due to Covid-19.
AML
ACCA has produced a report on its monitoring of accountancy firms’ anti-money laundering (AML) procedures in the UK and Ireland. The main issues identified during the monitoring visits included lack of firm-wide risk assessments, lack of an AML policy and procedures manual, and insufficient staff training in AML.
The report identifies the specific paperwork and evidence requested by ACCA during an AML monitoring visit and links to resources to assist firms in becoming compliant. Of the 26 Irish firms monitored, 24 were graded as generally compliant, and two as non-compliant. That non-compliance rate of 8% compares well with the 15% rate of non-compliance in the UK, but improvement is still needed.
Ethical breaches
As ACCA’s guidance makes clear, auditors are required to report all ethical breaches to their regulator. The regulator is IAASA for audits of public interest entities (PIEs), and ACCA (or the professional body that regulates the auditors’ work) for non-PIE audits. In Ireland the reporting requirement is ‘at least annually’, and ACCA has asked firms to make any report at the time of their annual renewal. No report is required if no ethical breaches have occurred.
Auditors in the UK are required to report ‘on a biannual basis’. They report to ACCA (or the professional body that regulates the firm’s audit work) for non-PIE audits and the Financial Reporting Council (FRC) for PIE audits.
DSS
A new service for adults with impaired decision-making capacity was set up under the Assisted Decision-Making (Capacity) Act 2015. ACCA and CCABI (Consultative Committee of Accountancy Bodies – Ireland) have been engaging with the new body, the Decision Support Service (DSS), about the role accountants can play in assisting decision-making by those covered by the legislation.
Decision-making representatives will be appointed by a court order that will set out the decisions they can take on behalf of the individual concerned. When the legislation comes into full effect, it will replace the Lunacy Act 1871 and the current ward of court system.
Listed clients
IAASA is proposing to amend the definition of ‘listed’ client in the ethical standard for auditors to include those admitted to trading on the AIM, Euronext Growth and ISDX markets. Auditors have different responsibilities under the ethical standards for unlisted, listed and PIE audits, and IAASA’s proposals will increase the number of entities that fall within the scope of the requirements applicable to listed entities. The definition of PIE is not changing. IAASA is inviting comment on the proposals by 3 December 2021.
Practice sales
ACCA Ireland has a free service for members that matches sellers and buyers of accounting practices. Buyers must be willing to release their name to potential sellers, while sellers’ details remain confidential until they consent to their release to a specific buyer. An expression of interest in either buying or selling a practice stays live for six months and must be renewed every six months if the practice remains interested. At the time of writing there are four practices for sale listed with ACCA.
To initiate the process, buyers need to send an indication of their intent by email to aidan.clifford@accaglobal.com, with details of the size of practice they are interested in, geographical area and preferred vendor terms and, most importantly, authorisation to share the email with a seller matching their criteria. Sellers need to supply a brief overview of their practice, including recurring turnover, audit and non-audit fees, geographical spread and vendor terms (ie cash, payment over two years or longer-term vendor financing).
