Reflections on 2023

Having authored six #GAAP_Alert #newsletters containing more than 100 news items (about 40,000 words), I’ve shared a lot with readers.

I’ve hoped that my words have helped #accountants, #auditors, and those responsible for #governance to discern relevant developments and identify and respond to #risks.

#Sustainability and #climate_change are the hot issues. New standards have been issued internationally and Australian versions should arrive by mid-year. Federal government legislation is coming.

?#ASIC and the #ACCC are tackling #greenwashing. Several organisations have provided guidance to assist preparers and auditors in understanding #developments and how to respond to them. Take the time to read and apply them.

?#Cyber-attacks and security were a constant theme. I hope that we learn from them. Professional bodies released several publications that should be read by directors, management, and auditors to build our understanding of risks and how to address them.

?It would be remiss of me not to mention that recently revised auditing standard #ASA_315 Identifying and Assessing the Risk of Material Misstatement has a heavy emphasis on IT and related risks. Some auditors will be challenged by what is required.

While on the topic of risk, from my audit-file inspections and litigation work have shown that some auditors have failed to understand and document how their clients assess risk and its effect on audit risk. They need to review ASA 315’s demands and the risk-management standards that their clients should be using as a benchmark.

?The fresh paint audit-quality management standards have a profound effect on the conduct of audit and assurance engagements. Some firms continue to be challenged by their requirements, in particular the annual assessment of compliance and monitoring and remediation requirements.

?Some still think of quality management primarily in terms of financial statements audits and forget about assurance. These are early days of implementation, and we shouldn’t be tempted to rest.

?Quality auditing of financial statements is essential to capital markets, accountability, and decision-making by users of all financial statements. ASIC has a focus on #audit_quality under its integrated approach to financial reporting and audit inspections. All of us need to heed ASIC’s findings and recommendations.

?The Financial Reporting Council has been critical of ASIC’s surveillance program as well as those of the CA ANZ and CPA Australia. The findings of UK FRC, IOSCO and PCAOB, provide further insights to common audit shortcomings. They should not be ignored.

?This edition continues my coverage of these and other important issues. View my latest newsletter (Nov-Dec) gaaptraining.com.au/wp-content/uploads/2024/01/GAAP_-Alert_No.6_2023.pdf.

?I trust that you have found our GAAP Alert newsletters and GAAPinars helpful in addressing contemporary issues and enhancing your core competencies. I have enjoyed writing them.

?What were your reflections on 2023?

?#Colin_Parker, Principal, #GAAP_Consulting, team leader – advisory and litigation support, and host of the #GAAPinar #training series for accountants and auditors.