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Technical new in brief July 2023

ICAEW's Audit and Assurance Faculty brings you the latest technical updates on developments in auditing and assurance, financial reporting and ethics.

FRC ‘s latest Annual Enforcement Review 

Audit and Assurance | 27 July 2023 

The Financial Reporting Council (FRC) has published its latest Annual Enforcement Review which reveals that a record number of cases were resolved in the year2022/23, with financial sanctions of £40.5m imposed. 

ISSB consults on proposed digital taxonomy to improve comparability of sustainability information

Financial Reporting | 27 July 2023 

The International Sustainability Standards Board (ISSB) has published the Proposed IFRS Sustainability Disclosure Taxonomy for public comment. The proposals reflect the disclosure requirements in the ISSB’s first two standards, IFRS S1 and IFRS S2. Deadline for comment 26 September 2023. 

FRC thematic review examines quality of climate-related metrics and targets disclosures

Financial Reporting | 26 July 2023 

The Financial Reporting Council (FRC) has published a thematic review, assessing the quality and maturity of climate-related metrics and targets disclosures. The review analysed TCFD disclosures from 20 companies’ 2022 annual reports across four sectors to identify areas of better reporting practice as well as opportunities for improvement.  

IASB completes technical work on two new IFRS accounting standards

Financial Reporting | 26 July 2023 

The International Accounting Standards Board (IASB) concluded its decision making on two projects – the final steps before drafting and balloting two new IFRS accounting standards. The IASB expects to issue the new accounting standards in the first half of 2024. The first new accounting standard will result in companies reporting more consistently and transparently on their financial performance, the second will reduce disclosure requirements for subsidiaries that are not traded on a public market. 

PCAOB issue report showing an increase in deficiencies at audit firms

Audit and Assurance | 25 July 2023 

The Public Company Accounting Oversight Board (PCAOB) issued a staff report which shows a year on year increase in the number of audits with deficiencies at audit firms that the PCAOB inspected in 2022. According to the report PCAOB staff expect approximately 40% of the audits reviewed to have one or more deficiencies, up from 24% in 2021 and 29% in 2020.  

IFRS Foundation publishes a comparison of IFRS S2 and TCFD 

Financial Reporting | 24 July 2023 

The IFRS Foundation published a comparison of the requirements in IFRS S2 Climate-related Disclosures and the TCFD recommendations. The requirements of IFRS S2 are consistent with the four core recommendations and eleven recommended disclosures published by the TCFD.  

FRC publishes annual report 

Financial Reporting & Audit and Assurance | 21 July 2023 

The Financial Reporting Council (FRC) has published its Annual Report and Accounts for 2022/23. The report highlights the FRC’s continued focus on delivering its purpose as an assertive regulator driving higher standards, while progressing towards becoming the Audit, Reporting and Governance Authority (ARGA). 

FRC lab publishes report on ESG data use and distribution 

Financial Reporting | 20 July 2023 

The Financial Reporting Council (FRC) Lab has published a new report entitled “ESG Data Distribution and Consumption” examining how investors obtain and use environmental, social and governance (ESG) data on companies, and highlights what actions companies can take to facilitate this. 

FRC issues call for evidence on the endorsement of IFRS S1 and IFRS S2 

Financial Reporting | 19 July 2023 

The Financial Reporting Council (FRC), in its role as The Secretariat to the UK Sustainability Disclosure TAC, has issued a call for evidence to inform the proposed endorsement of the IFRS Sustainability Disclosure Standards in the UK. Deadline for response 11 October 2023. 

PCAOB launches new tool to help users find and compare inspection report data 

Audit and Assurance | 19 July 2023 

The Public Company Accounting Oversight Board (PCAOB) launched a new tool which will allow investors, audit committee members and other stakeholders to better access and understand data from PCAOB inspection reports, using six new search filters.  

IESBA issue guidance on the application of the Code to technology-related services 

Audit and Assurance | 13 July 2023 

The Staff of the International Ethics Standards Board for Accountants (IESBA), jointly with the Staff of the Australian Accounting Professional & Ethics Standards Board (APESB), have released guidance on Applying the Code’s Conceptual Framework to Independence: Practical Guidance for Auditors in Technology-related Scenarios. The guidance describes key technology-related provisions of the International Code of Ethics for Professional Accountants (‘The Code’) and provides practical examples involving technology-related non-assurance services.  

FRC issues amendments to FRS 102 and FRS 101 

Financial Reporting | 11 July 2023 

The Financial Reporting Council (FRC) has issued amendments to FRS 102 the financial reporting standard applicable in the UK and Republic of Ireland and FRS 101 reduced disclosure framework – International tax reform – Pillar Two model rules. The amendments introduce a temporary exemption which is effective immediately with the disclosure requirements being effective for accounting periods beginning on or after 1 January 2023 with early adoption permitted.  

FRC annual inspection and supervision results 

Audit and Assurance | 6 July 2023 

The Financial Reporting Council (FRC) has published its annual inspection and supervision results of the largest 6 audit firms; BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars and PwC. Overall 77% of audits inspected were deemed good or required limited improvement, which reflects 10% year on year improvement compared to 2020.  

IFAC release implementation support for small firms on IAASB’s Quality Management Standards 

Audit and Assurance | 5 July 2023 

The International Federation of Accountants (IFAC) have released the second instalment in a three-part publication series to help small and medium-sized practices implement the International Auditing and Assurance Standards Board’s (IAASB) quality management standards. Developing a Detailed Implementation Plan provides a step approach to identifying quality objectives, completing a quality risk assessment and responding to those risks.  

ISSB update educational material on climate-related matters 

Financial Reporting | 4 July 2023 

The International Sustainability Standards Board (ISSB) has published an updated version of its educational material to help companies determine how to consider climate-related matters when preparing their financial statements applying IFRS Accounting Standards. 

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