Welcome to Professionalism

Issue 43

In this issue we provide updates on APESB's activities and technical projects for
July to Sept 2024.

Pacioli Society Dinner Event at the University of Sydney

On 22 August 2024, APESB CEO Channa Wijesinghe provided a keynote address at the Pacioli Society dinner event organised by the Discipline of Accounting, Regulation and Governance and the Accounting Society of the University of Sydney on the topic of Ethics and the Accounting Profession: Global and Australian Perspectives on Contemporary Developments. APESB Chairman Nancy Milne OAM and APESB Director Rachael Grimes AM also attended the dinner event. 

The keynote speech covered APESB’s development since its establishment, recent high-profile scandals and APESB’s engagement with current Parliamentary inquiries. The speech also provided updates on the IESBA’s global mandate and the challenges facing the accounting profession, such as tax planning, sustainability reporting and assurance, and firm culture and governance.

The keynote speech is available on APESB's website.

Revised APES 210 Conformity with Auditing and Assurance Standards

On 30 September 2024, APESB issued revised APES 210 Conformity with Auditing and Assurance Standards. The key change consists of updating the definition of Assurance Engagement to be aligned to APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (APES 110).

The revised APES 210 is effective from 1 January 2025, with early adoption permitted.

Read the Standard and the Technical Update.

Revised APES 305 Terms of Engagement

On 30 September 2024, APESB issued revised APES 305 Terms of Engagements. The key changes consist of the addition of the definition of Confidential Information in accordance with the change made in the Amending Standard to APES 110 Code of Ethics for Professional Accountants (including Independence Standards) for Technology-related revisions and consequential amendments to the related paragraphs where the definition of Confidential Information is used.

The revised APES 305 is effective from 1 January 2025, with early adoption permitted.

Read the Standard and the Technical Update.

Exposure Draft Open for Comment

Proposed revisions to APESB's Transaction Advisory Services Related Pronouncements (ED 04/24)

ED 04/24 proposes conforming amendments to: 

• APES 345 Reporting on Prospective Financial Information Prepared in connection with a Public Document
• APES 350 Participation by Members in Public Practice in Due Diligence Committees in connection with a Public Document
• APES GN 31 Professional and Ethical Considerations relating to Low Doc Offering Sign-offs

The key revisions include updated cross-references, revised paragraphs and definitions aligned to the Code and other editorials to ensure consistency across the pronouncements. The revised Standards are proposed to be effective from 1 April 2025, with early adoption permitted. The Guidance Note will be effective from the date of issue.

APESB is seeking respondents’ specific comments and feedback on the retention of the term ‘Listed Entity’ in these three APESB pronouncements.

Stakeholder comments are requested by 31 October 2024.

Read the Technical Alert and the Exposure Draft.

APESB September 2024 Board Meeting

APESB held its quarterly Board meeting on 3 September 2024.

The Board approved revised the issue of a revised APES 310 Client Monies. The key changes consist of amendments to allow the use of the term of 'client account' or a similar term in the name of the trust account and a new paragraph that provides a practical option to establish a right of set-off arrangement. The revised APES 310 is expected to be released mid-October 2024 and will be effective from 1 April 2025 with early adoption permitted. 

The Board also approved the released of the following: 

• a revised APES 210 Conformity with Auditing and Assurance Standards;
• a revised APES 215 Forensic Accounting Services;
• a revised APES 225 Valuation Services;
• a revised APES 305 Terms of Engagement;
• a revised APES GN 20 Scope and Extent of Work for Valuation Services;
• an exposure draft relating to Transaction Advisory Related Services pronouncements; and
• a new Compiled Code which will incorporate the amending standards on the definitions of Listed Entity and Public Interest Entity and Technology-related revisions.

The Board approved the closure of the Consultation Paper 01/19: Review of APES 230 Financial Planning Services and deferred the post-implementation review of APES 320 Quality Management for Firms that provide Non-Assurance Services for two years. The Board also received a presentation from EY on the status of Australian Sustainability Reporting and Assurance requirements. 

In a video clip posted on LinkedIn, Channa Wijesinghe, APESB’s CEO, provides an overview of key decisions made and projects discussed at this meeting, or you can read the highlights of the September 2024 Board meeting here.

Recent APESB Submissions

TPB's Information Sheets on Tax Agent Services (Code of Professional Conduct) Determination 2024  

On 24 September 2024, APESB made a submission on the Tax Practitioners Board's draft guidance on Sections 15, 20 and 25 of the Tax Agent Services (Code of Professional Conduct) Determination 2024. APESB provided a detailed comparison of these sections to APESB Pronouncements. APESB believe that the obligations set out are generally consistent with the requirements of APES 110 and APES 220 Taxation Services. However, APESB expressed concerns on the requirement in Section 15(2) and suggested defining a threshold or specifying types of matters that constitute a significant issue in a manner that capture issues that cause 'substantial harm' to the public or of a similar gravity. 

COI and Confidentiality Review Taskforce's Consultation Paper

On 30 July 2024, APESB made a submission on the Department of Finance’s Consultation Paper on its Conflict of Interest (COI) & Confidentiality Review. APESB expressed its support for the review and supported the proposed definition of a COI as well as the proposed principles and risk assessment approach to strengthen the management of conflicts of interest. However, APESB raised concerns about the inclusion of the term "material" in the definition of a COI, noting that it may lead to varied interpretations and potentially affect the disclosure of COI.

International Developments

IESBA Board Meeting

IESBA held a Board meeting in person in New York between 16-20 September 2024. APESB CEO, Channa Wijesinghe attended these meetings in his capacity as an IESBA Board Member.

During the meeting, the IESBA considered the significant comments from respondents on its Sustainability and Use of Expert EDs. The Board also received update on the IAASB-IESBA coordination.

The Board received a presentation of the preliminary report of the Firm Culture and Governance Working Group. Channa Wijesinghe, as Chairman of this Working Group, led the discussions and discussed the research, key findings and recommendations, and preliminary observations. Click here for the Board Meeting Papers.

The next IESBA Board meeting will be held on 2-6 December 2024 in New York.

Sustainability-related Developments

Australian Mandatory climate-related financial reporting to commence in 2025

The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 received Royal Assent on 17 September 2024, establishing the country's new mandatory climate-related financial reporting regime. This legislation, aligned with international accounting standards, requires large corporations that exceed specific thresholds to include climate-related financial disclosures in their annual reports (via a new sustainability report) for the financial year commencing 1 January 2025 onwards. Further information can be found on the Federal Parliament's website.

Australian Sustainability Reporting Standards approved by AASB

On 20 September 2024, the Australian Accounting Standards Board (AASB) approved AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information as a voluntary standard and AASB S2 Climate-related Disclosures as a mandatory standard.  Further information can be found on AASB's website.

International Sustainability Assurance Standards approved by IAASB

On 20 September 2024, the International Auditing and Assurance Board (IAASB) approved ISSA 5000 General Requirements for Sustainability Assurance Engagements which will be considered for certification by the Public Interest Oversight Board (PIOB) in December 2024. Further information can be found on IAASB's website.

The AUASB will consider the adoption of ISSA 5000 in Australia at a future Board meeting. 

Recent APESB Presentations

Rawson Verco Need presentation

On 2 September 2024. APESB CEO Channa Wijesinghe presented with APESB Chairman Nancy Milne OAM to the staff at Rawson Verco Need in Adelaide. The presentation provided an update on the IESBA’s Standard on Tax Planning and Related Services, APES 220 Taxation Services, parliamentary inquiries relating to the accounting profession and IESBA’s Firm Culture and Governance Project. View the presentation slides here.

Central Queensland University presentation

On 10 September 2024, APESB CEO Channa Wijesinghe delivered a Professional Standards Update to final year accounting students at the Central Queensland University. The presentation covered APESB’S role and mandate, parliamentary inquiries relating to the accounting profession and IESBA’s Firm Culture and Governance Project. View the presentation slides here.

CPA Australia Forensic and Financial Investigations Discussion Group presentation

On 25 September 2024, APESB CEO Channa Wijesinghe provided an update to CPA Australia‘s Forensic and Financial Investigations Discussion Group on recently approved revisions to APES 215 Forensic Accounting Services and APES 225 Valuation Services. The presentation also covered the parliamentary inquiries relating to the accounting profession and IESBA’s Firm Culture and Governance Project. View the presentation slides here.