GAAP ALERT No.9/2010                             To read on line please click here

By Colin Parker B.Bus FCA MAICD
Principal, GAAP Consulting, colin@gaap.com.au
Member of the Australian Accounting Standards Board (2006-2009)

INTRODUCTION

Differential Reporting and Making of RDR Standards – GAAP Implementation Publication
Corporations Amendment (Corporate Reporting Reform) Act 2010 for 30 June 2010
Corporate Reporting Regulations Approved
AUASB Issues ASRE 2415 Review of a Financial Report – Company Limited by Guarantee
ICAA Quality Review Program Focus and CPAs Top 10 Breaches
APESB May Meeting Highlights
New Bank Confirmation Certificates and Guidance from 30 September
New Audit Guidance Statement Prudential Reporting by a Life Company
Assurance Reports on Controls at a Service Organisation Standard Released by AUASB
NSW Incorporated Associations – Accounts and Audit
Debentures and Unsecured Notes – ASIC strengthens Disclosure Requirements
APRA releases Amended Superannuation Fund – Approved Audit Report Form
IASB and FASB release ED on Revenue Recognition
IASB Level 3 FV Disclosure Proposed Amendment
GAAP Consulting in Clarity Implementation
Clarity Tools Released by AUASB and GAAP Consulting

Differential Reporting and Making of RDR Standards – GAAP Implementation Publication

Highlights of the 25 June meeting of the AASB were:
Differential Reporting: Agreed to vote to make by 30 June 2010 a revised draft Application and Amending Standards for the purpose of introducing a second Tier of requirements for preparing general purpose financial statements. The second Tier of reporting requirements will significantly reduce the reporting burden of the vast majority of entities preparing general purpose financial statements. The Standards would have a mandatory application date of periods beginning on or after 1 July 2013. Eligible entities are permitted to early adopt the Standards for annual reporting periods beginning on or after 1 July 2009. This will complete Stage 1 of the AASB’s differential reporting project. Stage 2 of the AASB’s project will address the state of special purpose financial reporting and whether any reform thereof is needed. This area will be subject of empirical research that is expected to take some time, and
July 29-30 Meeting: Agenda items are likely to include: Financial Instruments; Service Performance Reporting; Leases; Income from Non-exchange Transactions; Post-Implementation review of AASB 1049; Extractive Activities; and Superannuation.

On 30 June, the AASB made AASB 1053 ‘Application of Tiers of Australian Accounting Standards’ and AASB 2010-2 ‘Amendment to Australian Accounting Standards arising from Reduced Disclosure Requirements’. Many reporting entities, particularly not-for-profit entities will early adopt the RDR standards to reduce the financial reporting disclosures.

Our publication ‘The Reduced Disclosure Regime: A Practical Guide to Implementation’, over 200 pages, written by an acknowledged expert in financial reporting, Carmen Ridley, GAAP Consulting Network, will be of particular assistance to all those involved in the financial reporting supply chain. Highlights of the Implementation Guide include:

• Executive Summary
• Explanation of the Regime: Summary; History; Timeframe; Impact on different entities and our recommendations for you
• Implementation Plan: Key Considerations; Plan for early adoption; What if we are not going to early adopt?
• Sample directors’ resolutions, directors’ declarations and extracts from Note 1
• Four Disclosure Checklists for the RDR (over 150 pages): Reduced Disclosure Regime; Disclosures No Longer Required under RDR; AASB Standard Applicable to Tier 2 without Amendment; and
• AASB Standards Excluded from Tier 2.

“Every accountant involved in financial reporting and those charged with governance will need to know about the new reporting rules now; that is why we have authored ‘The Reduced Disclosure Regime: A Practical Guide to Implementation’, and are ready to assist with training and implementation”. Contact Colin Parker, Principal, GAAP Consulting, 0421 088 611 (03 9890 4440) or colin@gaap.com.au. For an order form or further information on our RDR services please visit www.gaap.com.au.

Corporations Amendment (Corporate Reporting Reform) Act 2010 for 30 June 2010

The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, welcomed passage of legislation that will reduce the red-tape burden on business and improve Australia’s corporate reporting framework. The main provisions of the Corporations Amendment (Corporate Reporting Reform) Act came into effect for the financial year ending 30 June 2010. The Bill passed through the Senate without amendment. The Act received royal assent on 28 June 2010; the reforms take effect from the date of royal assent.

The package of reforms, contained in the Corporations Amendment (Corporate Reporting Reform) Act 2010 and accompanying Regulations, include:

• Significantly reducing the regulatory burden on companies limited by guarantee, which typically have a not-for-profit purpose, by introducing a three-tiered differential reporting framework
• Revising parent entity reporting
• Providing greater flexibility for companies to pay dividends, by replacing the profits test with a solvency-type test. Any dividends declared on or after 28 June 2010 need to satisfy the new solvency test, rather than the old “out of profit” test in the old S254T, and
• Allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.

The reforms will also implement refinements to the regulatory framework, including:

• Improving disclosure of non-financial information in the directors’ report
• Refining the statement of compliance with IFRSs contained in the directors’ declaration, and
• Clarifying the circumstances in which a company can cancel its share capital.

“The Government has today taken action to reduce the regulatory burden facing Australian companies. The Bill makes life easier for businesses of all sizes from the 11,000 companies limited by guarantee, most of which are not-for-profits, to large corporate groups, which can face unnecessarily duplication in their reporting requirements,” Mr Bowen said.

“I applaud the passing of this legislation, however am disappointed on the timing of its release when many entities may have already commenced the preparation of their template financial statements for 30 June 2010 and will now have additional work to perform”, said Carmen Ridley, Associate, GAAP Consulting Network.

David Sauer, Associate, GAAP Consulting Network stated “all companies producing financial statements required under the Corporations Act will need to revise at least the contents of their Directors’ declaration for the year ended 30 June 2010”. He added “the declaration of compliance with International Financial Reporting Standards should be addressed with some care”.

The GAAP Consulting team will continue to train and advice clients and potential clients on the key requirements and implication of this new legislation. Please contact colin@gaap.com.au or 0421 088 611 to organise your briefing session.

Corporate Reporting Regulations Approved

The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has welcomed the final approval of Regulations to accompany legislation passed by Parliament last week to reduce red-tape on business. The Regulations were approved by the Executive Council on 29 June and support the ‘Corporate Reporting Reform Act 2010’, which contains a range of measures to reduce the regulatory burden on business and improve Australia’s corporate reporting framework. The Regulations apply to the current financial year, ending 30 June 2010, allowing companies to immediately benefit from the cost saving measures.

The Regulations will reduce the regulatory burden on business by: expanding the category of individuals that can conduct a review of a company limited by guarantee; and outlining summary parent-entity financial information, which significantly simplifies the reporting requirements of parent-entities. “The package of reforms, contained in the Act and the accompanying Regulations, will deliver much-needed relief from red-tape for Australian companies,” Mr Bowen said.

AUASB Issues ASRE 2415 Review of a Financial Report – Company Limited by Guarantee

The AUASB issued ASRE 2415 ‘Review of a Financial Report – Company Limited by Guarantee’ and its accompanying Explanatory Guide. ASRE 2415 is operative for reviews of financial reports for reporting periods ending on or after 30 June 2010. Described as a ‘transitional’ Auditing Standard on Review Engagements, it establishes requirements and provides application and other explanatory material regarding a review of a financial report for a financial year of certain companies limited by guarantee and on the form and content of the auditor’s review report.

The release of ASRE 2415 is a consequence of the Corporations Amendment (Corporate Reporting Reform) Act 2010 whereby a three tiered differential reporting framework has been introduced exempting “small companies limited by guarantee” from reporting and auditing requirements and providing other companies limited by guarantee with streamlined assurance requirements and simplified disclosures in the directors’ report.

The topics covered by ASRE 2415 include: Objective; Definitions; Requirements (Applicable Standards, and General Principles) and Application and Other Explanatory Material. ASRE 2415:

• Directs an auditor who has conducted an audit of the company’s previous financial report, to conduct a review in the first reporting period under the revised legislation, in accordance with: ASRE 2410 ‘Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity’; or ASRE 2410 ‘Review of a Financial Report Performed by the Independent Auditor of the Entity’ for financial reporting periods commencing on or after 1 January 2010
• Directs an auditor who has not conducted an audit of the company’s previous financial report, to conduct a review in accordance with ASRE 2400 ‘Review of a Financial Reports Performed by an Assurance Practitioner Who is not the Auditor of the Entity’, and
• Requires the auditor to comply with relevant ethical requirements; and to implement quality control relevant to the individual engagement.

The purpose of the 10 page explanatory guide is to provide information on the context within which the AUASB has issued Auditing Standard on Review Engagements ASRE 2415 ‘Review of a Financial Report – Company Limited by Guarantee’.

ICAA Quality Review Program Focus and CPAs Top 10 Breaches

The Institute of Chartered Accountants in Australia has announced its areas of focus for its Quality Review Program for its next round of inspections: audit fee pressure and its impact the quality of the external audit; and audit documentation and independence issues in the context of fair value, asset impairment and going concern. Also, CPA Australia has updated its list (May 2010) of the top ten reported breaches in 2009. The breaches are:

• APES 315 ‘Compilation of Financial Information’ at 35%
• APES 305 ‘Terms of Engagement’ at 13%
• APES 220 ‘Taxation Services’ at 11%
• APES 320 ‘Quality Control for Firms’ at 9%
• APES 205 ‘Conformity with Accounting Standards’ at 7%
• APES 110 ‘Code of Ethics for Professional Accountants’ at 5%
• RMS 1 ‘Risk management statement’ at 3%
• Corporations Act 2001 (CA) s251A minutes at 3%
• CA s271 Company to keep documents relating to charges and register of charges at 2%, and
• APS 10 ‘Trust Accounts’ at 2%.

In relation to No.1 breach, a considered approach to implementing the requirements of APES 315 ‘Compilation of Financial Information’ is essential. Internal policies and procedures need to be revised, staff trained and clients informed about the changes and the fee implications. The experiences from dealing with APES 315 need to be incorporated into the continuous improvement processes of the firm. A failure to adequately address the changes in a timely manner may expose the public practitioner to reputational, legal and professional risks. To assist accountants in their implementation considerations, see our APES 315 ‘Compilation of Financial Information’ – Action Items for Members in Public Practice’.

The GAAP Consulting team undertakes a number of quality assurance reviews for accounting firms. We can also assist with training in the areas where the accounting bodies and regulators have noted shortcomings in practice; please contact colin@gaap.com.au to discuss how we can assist you.

APESB May Meeting Highlights

Highlights of the May meeting of APESB included:
Code of Ethics for Professional Accountants: Considered ED 0X/10 ‘Code of Ethics for Professional Accountants’, specifically concerns raised by ASIC, clarity of application of requirements in s.290 and 291, incorporation of 2006 decisions, definitions (including the definition of public interest entity), preparation and reporting of information for members in business and clarification of ‘shall’ obligations. A final draft ED will be considered in early July 2010
Financial Advisory Services:  Agreed that the taskforce continue work on the proposed ED APES 230 ‘Financial Advisory Services’ with a view to approving the issue of an ED by the end of July, and
Risk Management: Noted the work completed to date by the taskforce on the development of APES 325 ‘Risk Management’, and agreed that an ED of a proposed standard be developed for consideration at the August Board meeting.

Justin Reid, GAAP Consulting says “If the industry response to the Consultation Paper ‘Proposed Revision of APES 110 Code of Ethics for Professional Accountants’ released by the APESB in December 2009 is anything to go by the reactions to the upcoming ED 0X/10 will be very interesting to say the least”. “We expect audit firms to take a very keen interest in how these proposals impact the audit practice”. “There are potentially some quite significant implications, for example, the introduction of a public interest entity definition and the potential for the preparation of taxation accounting entries to be considered a self review threat”, he concluded.

New Bank Confirmation Certificates and Guidance from 30 September

The AUASB issued guidance on the procedures for obtaining audit evidence regarding an entity’s bank accounts and transactions, as well as updated bank confirmation request forms. Guidance Statement GS 016 ‘Bank Confirmation Requests’, developed with the Australian Bankers Association and member banks, will be effective for audits of entities with reporting periods ending on or after 30 September 2010, thereby allowing lead time for auditors and banks to adjust processes and systems for the new guidance. For audits with reporting periods ending 30 June 2010, the pre-existing Guidance Statement AGS 1002 ‘Bank Confirmation Requests’ remains in effect.

Merran Kelsall, AUASB Chairman, said the new guidance is expected to lead to significant improvements in bank confirmation processes. “The guidance clarifies when bank confirmation requests are required, the timing of auditor requests and bank response times and provides detailed guidance for every stage in the bank confirmation process. The guidance will help ensure that audit requests are better designed, so that banks will be more likely to respond in a timely manner with complete and accurate information,” Ms Kelsall said.

There is also new guidance included on the considerations necessary when using electronic bank confirmation processes. “Increasingly, auditors, clients and banks are seeking electronic solutions to make bank confirmation processes more efficient and effective. Electronic processes may reduce costs and improve response times and the reliability of responses. However, auditors must be aware that electronic processes may introduce some new risks,” Ms Kelsall concluded.

The 75 paragraph guidance statement addresses the following: Application; Issuance Date; Introduction; Definitions; Bank Confirmations; The Audit Process and Bank Confirmations; Deciding Whether to Request a Bank Confirmation; Nature of the Evidence Obtained from a Bank Confirmation; Remaining Alert to the Possibility of Fraud; Bank Confirmation Procedures (Determining the Bank Information to be Confirmed and Selecting the Appropriate Confirming Party; Designing the Bank Confirmation Request; Pre-completing the Standard Bank Confirmation Request Form; Submitting the Bank Confirmation Request; Authority to Disclose; Guarantees and Other Third Party Securities; Timing of Bank Confirmation Requests; Acknowledgement of Receipt by the Bank; Following-Up Bank Confirmation Requests); Results of the Bank Confirmation Process; Electronic Bank Confirmation Processes; Disclaimers or Restrictive Language; Co-operation with the Banking Industry; and Conformity with International Pronouncements.

Commenting of the release of the Guidance, Michael Cain, GAAP Consulting Network said ‘Given the operative date of the new Guidance and standard forms is from 30 September, it is opportune for these to be addressed as part of the Clarity training rollout that many firms have planned for the later part of this year”.

Assurance Reports on Controls at a Service Organisation Standard Released by AUASB

The AUASB issued an 84-page Standard on Assurance Engagements ASAE 3402 ‘Assurance Reports on Controls at a Service Organisation’ which complements Auditing Standard ASA 402 ‘Audit Considerations Relating to an Entity Using a Service Organisation’ (October 2009 in Clarity format). ASAE 3402 provides the requirements of service auditors’ reports on controls, which may be used as audit evidence by user auditors under ASA 402. ASAE 3402 is operative for service auditors’ assurance reports covering periods commencing on or after 1 July 2010.

Topics addressed in ASAE 3402 include: Ethical Requirements; Management and Those Charged with Governance; Acceptance and Continuance; Assessing the Suitability of the Criteria; Materiality; Obtaining an Understanding of the Service Organisation’s System; Obtaining Evidence Regarding the Description, Design of Controls, and Operating Effectiveness of Controls; Work of an Internal Audit Function; Written Representations; Other Information; Subsequent Events; Documentation; Preparing the Service Auditor’s Assurance Report; and Other Communication Responsibilities.

AUASB Guidance Statement GS 007 ‘Audit Implications of the Use of Service Organisations for Investment Management Services’ will continue to provide guidance where investment management services are provided by the service organisation. However, for periods commencing 1 July 2010, the requirements of ASAE 3402 must be followed by service auditors. GS 007 will be revised in 2010/2011 financial year to anchor to ASAE 3402 and ASA 402 in Clarity format.

NSW Incorporated Associations – Accounts and Audit

For the first time, some NSW Incorporated Associations will be required to prepare annual financial statements applying accounting standards and have them audited by a registered company auditor. In June 2010, the NSW State Government published the Associations Incorporation Regulation 2010. The Regulations apply from 1 July 2010. There are provisions for the Director-General to offer relief in response to individual applications, or on a broader basis.

The Regulations require Tier 1 associations with either revenue in excess of $250,000 or current assets in excess of $500,000 to prepare and lodge with the Director-General audited annual general purpose financial statements. The terms revenue and current assets have unique definitions contained within the Regulations. Tier 2 associations also have increased reporting obligations, but are not obliged by the Regulations to have an audit or prepare anything other than a basic income and expenditure statement and balance sheet, supported by some specific disclosures. There are other changes in respect of matters such as the constitution, the committee, and meetings and voting. Financial years have been prescribed in the model constitution as ending on 30 June each year.

Debentures and Unsecured Notes – ASIC strengthens Disclosure Requirements

ASIC released updated requirements for unlisted debentures and unsecured notes to improve disclosure to retail investors. The guidance is set out in an updated version of Regulatory Guide 69 ‘Debentures and unsecured notes–improving disclosure for retail investors’. The updated version of RG 69 sets out:

• Adjustments to the eight benchmarks that issuers should disclose against on an ‘if not, why not?’ basis from 1 September 2010, including those relating to minimum amounts of equity capital; adequate liquidity; and disclosure about loan portfolios and valuations
• The plain-English explanations that issuers should provide in prospectuses from 1 September 2010 about the importance of their benchmark disclosures, and
• Information on naming restrictions that will apply to debentures and unsecured notes under s283BH of the Corporations Act 2001 from 1 July 2011.

ASIC Chairman, Tony D'Aloisio, said ‘the regulatory guide is consistent with ASIC's Three Point Plan to improve disclosure, help retail investors understand and assess unlisted unrated debentures, but maintain the flexibility of the public fundraising process’.

The Three Point Plan, released in August 2007, included the introduction of disclosure benchmarks where issuers provide disclosure to investors relating to the benchmarks on an ‘if not, why not?’ basis, i.e., if a particular benchmark is not met there needs to be an explanation of ‘why not?’. The benchmarks improve disclosure and allow investors to make informed decisions but are flexible enough not to be strict requirements that must be followed in every case.

From 1 July 2011, ASIC will no longer permit some products to be called debentures. It will discontinue its interim no action position announced in 2005 in relation to non-compliance with the naming restrictions in s283BH limiting the types of financial products that can be called debentures. This will mean products not secured over tangible property (i.e., property with an actual physical existence) will need to be called unsecured notes or unsecured deposit notes. ASIC has adopted this approach following concerns that some issuers that have failed over the past two years have incorrectly described their products as debentures implying the products had a greater level of security than was actually the case. The updated policy is subject to transitional periods.

ASIC has also made consequential amendments to Regulatory Guide 156 ‘Debenture and unsecured note advertising’ (RG 156) which sets outs its policy for issuers advertising debentures and unsecured notes, and will soon release updated versions of the ASIC investor guide regarding unlisted debentures and unsecured notes and Pro Forma 223 ‘Interim auditor’s benchmark report’.

APRA releases Amended Superannuation Fund – Approved Audit Report Form

Auditors of APRA regulated funds are reminded that the quality control requirements of the ‘Clarity’ auditing standards are applicable to all audits undertaken after 1 January 2010 and the full suite of standards applies to the 30 June 2010 audit of funds created after 1 January 2010. Auditors of existing funds will need to apply the new standards to all audits for years ending on or after 1 January 2010.  “Auditors of all superannuation funds should consider the implications of the changes to the audit standards on the 2011 audits as a matter of urgency to ensure that ongoing compliance with profession obligations is maintained,” says Susan Orchard, Head of Superannuation, GAAP Consulting Network. 

APRA released an approved form titled ‘Audit Report under SIS Act (pdf version with Notes)’ for reporting periods commencing on or after 1 July 2009. The form has been updated to accommodate the following changes:

• The Compliance Section has been moved from Part 1 to Part 2 of the Form
• Compliance obligations have been aligned for Reporting and Non-Reporting entities. Consequently Part 2 of the form is now applicable to both Reporting and Non-Reporting Entities. T he form is to be completed on the basis that not all compliance requirements are applicable to all entities, and that compliance opinions are only provided for provisions which are relevant, and to the extent applicable. As such, auditors are reminded that the Approved Form cannot be amended unless specific facility is provided such as in relation to Condition C.1 of the RSE Licence
• The Compliance Section now specifically includes the requirements under s. 29EA of the SIS Act as they relate to Condition C.1 of the RSE licence. This relates to the required level and form of minimum liquid assets held under that condition (where this condition does not apply this part can be crossed out). Further explanation has been included in the guidance section
• Minor administrative changes to simplify and improve efficiency of the Form, and
• The updated Form is effective for reporting periods commencing on or after 1 July 2009, that is, for the 2009-2010 and subsequent years of income.

The ATO has also released the revised SMSF Annual Return form and instructions for 2010. There are no changes which will impact SMSFs in the current period. However, a number of proposed changes have been outlined which will impact in future periods: see http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00237541.htm; and
http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00237540.htm.

IASB and FASB Release ED on Revenue Recognition

The IASB and the US FASB published for public comment a draft standard ‘Revenue from Contracts with Customers’ to improve and align the financial reporting of revenue from contracts with customers and related costs. The core principle of the draft standard is that an entity should recognise revenue from contracts with customers when it transfers goods or services to the customer in the amount of consideration the entity receives, or expects to receive, from the customer. The exposure draft ‘Revenue from Contracts with Customers’ is open for comment until 22 October 2010, and will be shortly released for comment in the Australian context by the AASB.

The proposed standard would improve both IFRSs and US GAAP by: Removing inconsistencies in existing requirements; Providing a more robust framework for addressing revenue recognition issues; Improving comparability across companies, industries and capital markets; Requiring enhanced disclosure, and Clarifying the accounting for contract costs. If adopted, the proposal would create a single revenue recognition standard for IFRSs and US GAAP that would be applied across various industries and capital markets. The publication of this joint proposal represents a significant step forward toward global convergence in one of the most important and pervasive areas in financial reporting. The proposed standard would replace IAS 18 ‘Revenue’ and IAS 11 ‘Construction Contracts’ and related interpretations. In US GAAP, it would supersede most of the guidance on revenue recognition in Topic 605 of the ‘FASB Accounting Standards Codification’.

Commenting on the exposure draft, Sir David Tweedie, chairman of the IASB, said: “The proposal by the two boards is the result of our intensified joint efforts. It is an important step towards a single global principle-based standard that would make it absolutely clear when revenue is recognised and why. We shall want to hear the views of all those affected by the proposals.”

Robert Herz, chairman of the FASB, said: “This proposal marks a key milestone in our joint efforts to improve and converge our standards in one of the most important and pervasive areas in accounting. The unanimous agreement of the boards on this proposal is the culmination of an intensive process of working together jointly. The proposed new standard not only seeks to reduce complexity by streamlining the way revenue recognition principles are applied across various industries and transactions, but it also aims at eliminating inconsistencies in existing revenue recognition standards and practices.”

Commenting on the release of the ED, Michael Cain, GAAP Consulting Network, stated “This proposed Standard demonstrates further convergence of IFRSs and US GAAP. The proposed approach to revenue recognition is aimed at reducing complexity by streamlining the way revenue is recognised across a number of industries and transactions. It will make it clearer when and why revenue is recognised and should provide a more consistent basis for reporting revenue and produce accounting outcomes that more closely matches the underlying economics of transactions.”

IASB Level 3 FV Disclosure Proposed Amendment

The IASB released ED 2010/7 ‘Measurement Uncertainty Analysis Disclosure for Fair Value Measurements’ that contains further enhancements to a disclosure proposal on Level 3 fair value measurements that formed part of the IASB’s exposure draft Fair Value Measurement (May 2009). In that exposure draft, the IASB proposed a three-level fair value hierarchy that categorises observable and non-observable market data used as inputs for fair value measurements. According to that hierarchy, Level 3 inputs are ‘unobservable inputs’ used for the fair value measurement of assets or liabilities for which market data are not available.

In response to comments received, the IASB proposes to enhance its original proposal by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between unobservable inputs used to measure fair value in Level 3. Users of financial statements commented that this information would allow them to assess the effect that the use of different unobservable inputs would have had on the fair value measurement. ED 2010/7 is open for comment until 7 September 2010.

GAAP Consulting in Clarity Implementation

Justin Reid, GAAP Consulting has assisted the technical team of an audit office with the introduction of the Clarity Auditing Standards. Assistance provided has included:

• Provision of comparative tables of existing and Clarity requirements
• Workshop with senior technical staff to discuss the impact of Clarity upon the audit office
• Facilitating discussions between the AUASB technical staff and the technical team on interpretations of ASA 600 and ASA 550
• Presentation of full day workshop training for senior audit office staff outlining the key changes under Clarity, and
• Follow up presentation to remaining audit office staff.

Clarity Tools Released by AUASB and GAAP Consulting

The AUASB has prepared an overview of the revised and redrafted Australian Auditing Standards as supplementary material for the information sessions held recently on the Clarity versions of the Australian Auditing Standards. “The overview aims to provide a helpful guide to certain aspects of a selection of Auditing Standards. It contains limited information about some of the changes to, and/or significant aspects of, the selected Auditing Standards”, says the AUASB.

There is so little time to: Read the 41 ‘Clarity’ auditing standards; Identify and understand the changes; Train the audit staff; Update manuals, programs, and precedents; Communicate relevant changes to clients. The GAAP Consulting team has undertaken the detailed analysis of ‘Clarity Auditing Standards’ so that the audit practice can save time and money in understanding the mandatory requirements, the changes, and the action items required to successfully implement the new auditing regime.

Our publications ‘Clarity Auditing Standards – The Detailed Analysis’, and ‘Clarity Auditing Standards – An Introduction’ (authored by Justin Reid, GAAP Consulting Network), together with tailored in-house training courses and consulting services, provides your solution to effectively manage the risks in the transition to the ‘Clarity’ Auditing Standards. ‘Clarity Auditing Standards – The Detailed Analysis’ (available July) provides an in-depth analysis of changes in the ‘Clarity’ Auditing Standards to partners and senior managers of accounting firms so that the audit practice can:

• Compare and contrast each of the existing individual mandatory requirements to those prescribed under the ‘Clarity’ Auditing Standards
• Identify the new and revised requirements
• Understand the significance of each new and revised requirement
• Implement the changes by using our action items list
• Assist with an orderly implementation through a structured process, and
• Begin the client communication process.

Contact Colin Parker, Principal, GAAP Consulting, 0421 088 611, colin@gaap.com.au or visit www.gaap.com.au for further information.

Accounting

• 30 June ED 43‘Service Concession Arrangements: Grantor’ – IPSASB
• 30 June ED 44 ‘Improvements to International Public Sector Accounting Standards’ – IPSASB
• 2 July ITC 23 ‘Extractive Activities’ – AASB
• 2 July ED 196 ‘Fair Value Option for Financial Liabilities – AASB
• 16 July ED 2010/2 ‘Conceptual Framework for Financial Reporting: The Reporting Entity’ – IASB
  30 July Discussion Paper ‘Extractive Activities’ – IASB
• 9 August ED 195 ‘Defined Benefit Plans (proposed amendments to AASB 119)’ –AASB
• 6 September ED 2010/2 ‘Defined Benefit Plans – Proposed Amendments to IAS 19’ – IASB
• 7 September ED 2010/7 ‘Measurement Uncertainty Analysis Disclosure for Fair Value Measurements’ – IASB
• 30 September ED 2010/3 ‘Presentation of items of Other Comprehensive Income (Proposed amendments to IAS 1)’ – IASB
• 22 October 2010 ED 2010/6 ‘Revenue from Contracts with Customers’ – IASB

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