• IAASB Digital Technology Market Scan: Data Standardization

    English

    Welcome to the first market scan prepared by the IAASB's Disruptive Technology team. Building on our previous work, which included the Innovation Report created with Founders Intelligence and discussed at the January 2021 IAASB Meeting, we will bring you a regular market scan focusing on various topics from the report around every two months. The market scans will consist of exciting trends in the area, including interesting developments on this topic, what this might mean for the IAASB, corporate and start-up innovation, and noteworthy investments.

    In this market scan, we will explore Data Standardization Platforms for Enabling Data Access, which falls under the activity of Accessing Information & Data. We're starting with Data Standardization because establishing a common standard of how data is structured and accessed is a foundation block to the success and widespread adoption of other innovative technologies.

    We will cover:

    • What is Data Standardization and why it is important?
    • What some of the latest exciting developments on this topic are, including the increasing maturity of Common Data Models and Knowledge Graphs.
    • What this could mean for the IAASB.

    What is Data Standardization and why is it important?

    Data Standardization is the process of converting data to a common format that allows users to better analyze and utilize the data, thereby enabling data collaboration, large-scale analytics and the use of more advanced tools to interrogate the data.

    With exponential growth in the amount and variety of data that companies create and use, there is voluminous unstructured, or inconsistently structured, data in companies' repositories. This leads to data silos and data that is underutilized or unnecessarily hard to access.

    One of the problems this has created, amongst others, is where auditors are spending more time on data management, particularly when trying to access, "map," and use the entity's data as well as when performing data analytics. When each entity uses different data models and systems or platforms to store, structure and extract data, the inefficiency is amplified. Some firms are developing internal tools to address these challenges, such as by building ETL (Extract, Transform, Load) tools to minimize this inefficiency e.g., KPMG had 25 different ETL projects in 2019. Auditor's time spent on data management may be better utilized on other areas of the audit, and many firms and practitioners may have challenges with obtaining tools to access, manage and evaluate data relevant for auditing and assurance engagements.

    The data management industry, firms, and regulators are exploring various approaches to help audit and assurance professionals and other professional service providers with these challenges. The UK's Brydon review in 2019, for example, recommends initiatives to develop a standard method of data extraction covering both structured and unstructured data.

    Data standardization complements this approach by helping to address the root cause of difficulties by converting the data to be extracted into a common format. In particular, digital multi-party platforms are gaining traction as a solution to provide standardized data structure and mechanisms to access data silos with non-uniform formats, thereby facilitating the sharing of data to unlock new values both internally and externally. One exciting development is the development of Common Data Models (CDM). A CDM is a shared data language, allowing standardized metadata and its meaning to be shared across applications easily. Unfortunately, at present, there is no one model adopted globally across specific industries or jurisdictions.

    Recent Noteworthy Developments in Data Standardization

    This section is designed to provide examples of recent developments that may signal future disruption in this area. It is not a complete list of all activities in the field of data standardization. 

    1. Disruptive start-ups are gaining traction

    1. Engine B receives new financial and board-level investment
      • Institute of Chartered Accountants in England and Wales (ICAEW) upped its investment in Engine B to 10% and has taken a board seat.
      • Engine B is partnered with key organizations, including Microsoft and ICAEW, to create an Audit Common Data Model.
      • Part of this project involves creating an Intelligent Data Access Platform designed to be installed in a client environment and ingest corporate data, both structured and unstructured, to map it on an Audit CDM. This platform attempts to replace the need for complex ETL tools in favor of open data standards that facilitate the sharing of clean standardized data.
      • Working with 13 audit firms, Engine B aims to roll out its assets in late 2021, first in the UK, then the US, as it is collaborates with the AICPA. It aims to become a widely adopted infrastructure like Open Banking globally.
    Other Data Standard Initiatives

    Data standards exist in various forms already. Another example is ISO 21378, Audit Data Collection, issued by the International Organization for Standardization (ISO). This standard leveraged the American Institute of CPA American Institute of Certified Public Accountants Audit Data Standards.

    2. InfoSum raised a further $65m in their Series B to scale its privacy-focused data collaboration platform:

    InfoSum's 'non-movement of data' technology enables companies to connect their data (both internally and externally) to unlock new customer value. This works by having companies standardize their data (i.e., map their data) according to InfoSum's Global Schema rules and upload it to InfoSum's platform.InfoSum raised a further $65m in their Series B to scale its privacy-focused data collaboration platform:

    What does this mean? It means investors see an opportunity for data standardization when companies want to collaborate and share data without moving data outside their companies. It also signals the growing maturity of the data collaboration space as InfoSum is a leading start-up and is raising large sums of money to upscale its operations.

    Key Venture Capital & Investment Terms

    Venture capital (VC) is a form of financing where capital is invested into a company, usually a start-up or small business, in exchange for equity in the company. VC funding stages can be useful signals for the maturity of the start-up and its products or services – the later the stage, the more developed and established in market the startup typically is. VC funding can also be a useful barometer for the interest in a particular technology and how influential it may be in the market as well as an indicator of potential wider adoption.

    For simplicity it can be useful to group start-up funding stages into the below broad categories:

    • Pre-seed and Seed: start-ups in these stages are very early-stage start-ups, often prior to launching a product in market or with a few initial customers. They are typically seeking investments from various types of investors (e.g., individuals as well as firms) to establish themselves, build out the product, hire the core team and acquire more of their initial customer base.
    • Series A and Series B: start-ups in these stages are in growth mode, usually with a product/service that is market-ready and launched, with some revenue being generated. They are usually looking for funding to fuel the continued growth of the start-up.
    • Series C and beyond: start-ups in these stages are more mature, typically with products/services in market that have strong demand and likely have solid revenues and profits. Series C can be the last stage of VC financing (e.g., before an IPO) however many companies opt to raise more VC rounds such as Series D, E, etc. Funding at this stage is likely to be used to scale up operations and continue growth through entering new markets, R&D or making acquisitions.

    For a deeper dive see Venture Capital Jargon Buster by Founders Intelligence and MJ Hudson.

     

    2. Relevant industry players are taking more interest in data standardization

    I. A leading US accounting firm custom-built a common data model

      • Besides a growing industry consortium for Engine B, a US accounting firm has partnered with Orion Innovation to build a CDM that enables uniformity in the data from hundreds of different ERP systems and technology platforms
      • The CDM made the data more understandable and useful to all its business activities, particularly auditing, data analytics, and advisory. Apart from unlocking advanced data analytics on the full population of data, it also unlocked automation options, which may provide greater consistency of audit quality.
      • See the case study here for more detail.

    II. The EDM Council, a global association created to elevate the practice of Data Management, is leading the development of an open-source semantic data standard

      • The EDM Council has published the Data Management Capability Assessment Model (DCAM). DCAM defines the scope of capabilities required for an entity to establish, enable and sustain a mature Data Management discipline. It addresses the strategies, organizational structures, technology and operational best practices needed to drive Data Management across the organization, and ensures the data can support digital transformation, advanced analytics such as artificial intelligence and machine learning, and data ethics.
      • The EDM Council partnered with CPA Canada to provide an overview of how DCAM can be leveraged for audit and business controls. A recording is available.
      • Since 2020, the EDM Council has been leading the Financial Industry Business Ontology (FIBO) initiative, which provides descriptions of the structure and contractual obligations of financial instruments and financial processes, to give meaning to the data.
      • The fundamental aim of the standard is to harmonize data across disparate repositories to validate data quality and improve risk analysis by making links between datasets that are understandable to both humans and software, i.e., resolve data silos.

    3. Knowledge graphs for audit use cases is showing promising progress

    I. Engine B's audit knowledge graph hopes to improve the quality of audits

      • Knowledge graphs developed by Engine B provide contextual relevance of data by looking at the relationships between all data elements (both structured and unstructured), which allow auditors to make context-driven decisions. In particular, they are looking at anomaly detection and fraud detection as their initial use cases.
      • These knowledge graphs can sit on top of their Audit CDM to perform visual and contextual data analysis on all relevant transactions. Here is an explainer video from the developers.

    II. The EDM Council is creating an Open Knowledge Graph Lab (OKGL) on top of their FIBO initiative

      • Since late 2020, EDM Council has been developing OKGL as the infrastructure of knowledge graphs for application across different sectors. Particularly for the financial services sector, the EDM Council is exploring use cases in fraud, risk and anti-money laundering. The EDM Council is also currently preparing the rollout of a cloud sandbox to serve as a testbed to develop prototypes.

    What might this mean for the IAASB?

    The IAASB has an interest in improving the data available to assurance practitioners as this may enable the performance of more advanced analytics and otherwise improve areas of the audit that use data (e.g., evaluating models and related controls). Data standardization also enables collaboration between the entity and others, including auditors or assurance practitioners. Data standards are of particular interest in the sustainability space as a tool for entities to satisfy different reporting standards.

    Data standardization is not within the IAASB's remit because it is fundamentally a matter for how the entity manages its data. Local law or regulation requiring the maintenance of books and records may be most relevant. However, because of the benefits to audit and assurance quality, the IAASB should stay close to the topic and take opportunities to raise it with other stakeholders, such as regulators, preparers, and assurance practitioners.

    While the developments on data standardization are promising, there is still a considerable way to go before it is widely adopted by entities and therefore able to fully benefit audit and assurance. In the absence of a widely adopted CDM or another method to standardize data, the gap in data management capabilities between differently equipped firms and practitioners, including between jurisdictions, may grow. Furthermore, widespread adoption of innovative automated audit tools and techniques will be inhibited when data is not structured in a standard format.

    As prominent CDMs are more widely adopted and supported by entities and made available to firms, there may be a need for standards on assurance services on whether data is compliant with the relevant data standard.

    What do you think about this bulletin?

    Please take the time to fill out our quick survey to let us know your thoughts about this bulletin, how it can be improved and what you would like to hear about going forward.

    What next?

    Our next Market Scan bulletin will be distributed by January 2022.

  • IAASB Digital Technology Market Scan: API Access

    English

    Welcome to the second market scan from the IAASB's Disruptive Technology team. Building on our previous work, including the Innovation Report created with Founders Intelligence and discussed at the January 2021 IAASB meeting, we will issue a Market Scan focusing on topics from the report approximately every two months. Market Scans will consist of exciting trends, including new developments, corporate and start-up innovation, noteworthy investments and what it all might mean for the IAASB.

    In this Market Scan, we explore API Access to External Data Sources for Enriched Analysis, which falls under Accessing Information & Data, because establishing a method for obtaining relevant and reliable external data that can be used in an audit has the potential to reshape the audit process.

    We cover:

    • What an API is and why it is important?
    • The latest exciting developments on this topic are, including Open Banking
    • Possible implications for the IAASB

    What is an API and why is it important?

    An API or Application Programming Interface is a set of defined rules that explain how computers or applications communicate with one another. They enable companies to open their application’s data and functionality to external third-party developers, business partners and internal departments within their companies. APIs use standardized requests that in turn return standardized outputs or responses.

    APIs have been around as long as computers; modern day “web APIs” grew in use with the advent of social media platforms, like Facebook and Twitter. However, it was Amazon that created a fundamental shift in how digital resources are accessed with founder and CEO Jeff Bezos’ famous API mandate, issued in 2002. This manifesto requires all Amazon development teams to “expose their data and functionality through service interfaces”. 

    From “What Is an API: Concept and Architecture Types Explained on Real-Life Examples” at Cleveroad.com. See additional resources at the bottom of this email for more.

    From an audit and assurance perspective, there are three key areas where APIs can be leveraged.

    1. Enabling access to entity data (such as general ledger or sub-ledger data) for the purposes of inquiry or extraction.
    2. Enabling access to entity-specific third-party data such as bank transactions.
    3. Enabling access to audit-relevant external information sources, such as macroeconomic or industry-specific data.

     1.    Access to entity data

    In our last Market Scan: Data Standardization, we wrote about the exponential growth in available data that could be used in an audit as well as the challenges of obtaining standardized data and the use of common data models. The initial step in the data acquisition process may involve using an API to request the required data from the entity’s accounting system. Over the last five years, there has been growth in investment in this area both from within accounting firms and from third party vendors of data extraction, transformation and load (ETL) technology such as Engine B, Validis, Inflo, Galvanize and Workiva.

     2.    Access to entity-specific third-party data

    This is the key area of potential disruption to the audit and assurance industry. Being able to directly access entity-specific third-party data, such as bank transactions, by using open banking APIs could revolutionize how audit evidence is obtained, particularly when connected with entity data and other relevant external information sources. Mandates such as the Second Payments and Services Directive in Europe, which required banks to open their payments infrastructure and customer data to third parties, have supported the growth in open banking. It is now a global initiative with 87% of countries having some form of Open Banking API. Below are details of some countries that use open banking, including where driven by government regulation.

    From “Trailblazers and latecomers: open banking around the world” at GoCardless.com

    3.    Access to audit-relevant external information sources

    Use of external information sources is commonplace in an audit. By using APIs, information can be obtained in a standardized format, which makes it easier to use, for example, in analytical procedures.

    The benefits of APIs may include increased speed and access to data from varied independent reliable sources. Additionally, when coupled with other technology, such as robotic process automation, it can facilitate efficiencies in routine audit activities, such as using company registry information to identify related parties. Many audited entities seeking to leverage these benefits are using APIs within their IT environment to support business operations.

    Alongside the significant growth in prevalence of APIs comes concerns about security and management of data. The UK and Australian governments have both issued API data standards and continued attention from governing bodies is likely. 

    Recent noteworthy developments in API access

    This section is designed to provide examples of recent developments that may signal future disruption in this area. It is not a complete list of all activities in the field of API access. For a reminder of Key Venture Capital and Investment terms please refer to the previous Market Scan.

     1. Open Banking experiences rapid growth

    I. Fintech start-ups are shaking up the banking industry

    There are a number of very active fintech start-ups developing APIs that allow easier sharing of financial data. Prominent examples around the world include:

    • Plaid, a San Francisco-based startup building technology platforms to connect applications to users’ bank accounts, has raised US$735m in funding with a latest US$425m Series D backed investors such as Andreessen Horowitz and Silver Lake. Acquisition by Visa was blocked by the US Department of Justice on the grounds that it would limit competition in the payments industry. Plaid was one of the first companies to create what is called a unified API—a single API that connects to over 11,000 financial institutions.
    • Tink and Truelayer, both based in Europe offer platforms and products to support open banking integration in applications. Tink was recently acquired by Visa.
    • Open banking has also gained traction in Asia with early-stage start-ups like Hong Kong-based Finverse, which has an ambitious goal to enable open banking throughout the Asia-Pacific region.

    Additionally, there are start-ups serving the financial services industry with APIs providing access to payroll, insurance and credit data to support targeting of appropriate financial products to businesses. This is an area of significant growth and one to watch for future audit and assurance implications.

    II. Recognition grows of the impact of Open Banking on Assurance services

    • Confirmation.com (part of Thomson Reuters) has provided audit confirmation services for nearly 20 years and recently completed a three-month pilot to test open banking, which received positive feedback from pilot audit firms.
    • Circit is a rapidly growing Dublin-based fintech startup launched in 2017 that provides a platform supporting confirmation requests, transaction verification, PBC client collaboration and document signing. It names banks, “big four” and mid-tier audit firms amongst its clients.

    2. External Information Sources Related Activity

    I. US PCAOB issues guidance on external information sources

    In October 2021, the US Public Company Accounting and Oversight Board (PCAOB) issued staff guidance highlighting the importance of appropriately evaluating the relevance and reliability of information from an external information source that an auditor plans to use as audit evidence. The publication gave a number of examples and factors to consider. It notes that, “Advancements in technology in recent years have improved accessibility and expanded the volume of information available to companies and their auditors from traditional and newer external sources.”

    II. Growth in data platform providers to support access to external data sources

    • People Data Labs raised US$45m in Series B funding to enable expansion of data products to support fraud detection and risk mitigation. The San Francisco-based company builds APIs that enable their clients to leverage vast datasets to build people profiles and records as well as power predictive modeling, drive artificial intelligence and build new tools. The new funding, announced in November 2021, will enable the company to expand its data products to support fraud detection, risk mitigation and insurance underwriting.
    • Demyst raised A$33m and announced plans to issue an IPO. Demyst is an external data deployment company that works with banks, insurers and fintechs providing operationalized access to external data sources through a secure data platform.

    What might this mean for the IAASB?

    Access to quality data is at the heart of enabling technological transformation within the assurance profession. APIs represent a key route to success. The availability of accessible, standardized data created by APIs builds opportunities to improve finance functions, enhance audit quality, and radically streamline the audit process.

    The increasing accessibility of entity-specific third-party data, such as entire populations of bank transactions that have been made possible by Open Banking APIs, may present a need to envision how this will reshape the audit process—particularly in regard to obtaining audit evidence.

    The growing use of web APIs within entity core operations, across many industries, from retail to banking, may lead to web APIs becoming relevant to financial statements preparation and, therefore, auditors’ risk assessment procedures. Jurisdiction-specific guidance may help auditors better understand and assess how entities are managing the risks related to using APIs available in their jurisdiction.

    Finally, the quantum of external data sources available to auditors presents an additional challenge of assessing the relevance and reliability of these data sources—and perhaps a need to address these matters centrally.

    Useful links/articles

    API Basics

    Accounting Profession insights

    Other perspectives

    Funny story

    What do you think about this bulletin?

    Please take the time to fill out our quick survey to let us know your thoughts about this bulletin, how it can be improved and what you would like to hear about going forward.

    What next?

    Our next Market Scan bulletin will be distributed in February 2022.

  • IPSASB eNews: December 2021

    English

    The IPSASB held its fourth meeting of the year virtually on December 7-10 and 14-15, 2021.

    Leases

    The IPSASB approved IPSAS 43, Leases with an effective date of January 1, 2025. IPSAS 43 supersedes IPSAS 13, Leases and introduces the right-of-use model for lessees, aligning with IFRS 16, Leases. IPSAS 43 is expected to be published in January 2022. The IPSASB will continue consideration of public sector specific leasing issues, such as concessionary leases, in its Other Lease-Type Arrangements project.

    Improvements

    The IPSASB approved Improvements to IPSAS, 2021 with an effective date of January 1, 2023, except for the Interest Rate Benchmark Reform related amendments to IPSAS 29, Financial Instruments: Recognition and Measurement, which will have an effective date of January 1, 2022. Improvements to IPSAS, 2021 is expected to be published in January 2022.

    Retirement Benefit Plans

    The IPSASB voted to preliminary approve ED 82, Retirement Benefit Plans. ED 82 provides accounting and reporting requirements for public sector retirement benefit plans and is adapted from IAS 26, Accounting and Reporting by Retirement Benefit Plans. The IPSASB will finalize ED 82 at its February 2022 meeting.

    Conceptual Framework-Limited Scope Update-Next Stage

    The IPSASB approved ED 81, Conceptual Framework Update: Chapter 3, Qualitative Characteristics and Chapter 5, Elements. ED 81 will be published early in 2022 with a four-month consultation period. In December, the IPSASB finalized its proposals for the description of a resource and revisions to Chapter 5, which includes sections on unit of account and liabilities.  

    Natural Resources

    The IPSASB reviewed updates to the draft Natural Resources Consultation Paper and performed a detailed page-by-page review of the introductory chapter, as well as the chapters on presentation, living resources, and water. Other than certain clarifications and editorial comments, no significant issues were noted by the IPSASB’s review. The Consultation Paper is expected to be approved at the March 2022 meeting.

    Revenue and Transfer Expenses

    The IPSASB discussed accounting models proposed for Transfer Expenses with, and without, binding arrangements and reviewed guidance related to specific aspects of the draft standard. The IPSASB confirmed an entity’s obligation in revenue transactions with binding arrangements is a narrower concept than ‘present obligation’ in the Conceptual Framework, and clarified how to distinguish individual obligations in a binding arrangement. The IPSASB agreed that specified activities and eligible expenditures are examples of ways in which an entity may fulfill obligations.

    Mid-Period Work Program Consultation

    The IPSASB performed its preliminary analysis of the responses to the Work Program Consultation. Based on the strong support from respondents, the IPSASB tentatively agreed to prioritize the two major and four minor projects proposed in the Consultation and decided a feedback statement should be developed to capture constituent feedback. The project prioritization and feedback statement are expected to be approved in March 2022. Finally, the IPSASB discussed the strong feedback received that indicated sustainability reporting should be prioritized.

    Measurement Suite of EDs

    A preliminary analysis of the responses to the Measurement Suite of Exposure Drafts (ED) 76-79 was discussed by the IPSASB. Respondents strongly supported most proposals, and it was clear the IPSASB’s efforts in developing an illustrative ED as part of the consultation process in 2019 paid dividends. The IPSASB focused its discussions on the diverse views related to the public sector specific measurement basis proposed and agreed the Board would have to dedicate resources in 2022 to address concerns identified.  

    Year End Review

    Watch the IPSASB's Year End Review: 2021 on YouTube. 

  • IPSASB eNews: June 2021

    English
    Mid-Period Work Program Consultation


    The IPSASB approved its Mid-Period Work Program Consultation. This consultation seeks constituent feedback on which projects the IPSASB should prioritize as its resources become available. The IPSASB will hold several regional virtual outreach events during the consultation period to directly engage with constituents.  

    The consultation is expected to be published in July 2021 with a 4-month comment period. Watch for the consultation for the full details on the IPSASB’s proposals.

    Improvements to IPSAS 2021

    The IPSASB approved Exposure Draft (ED) 80, Improvements to IPSAS, 2021, which includes both general improvements and IFRS related improvements to IPSAS. General improvements consist of proposals for minor amendments to IPSAS identified by stakeholders. IFRS related improvements consist of proposals for minor amendments to IPSAS sourced from recent IFRS improvements and narrow scope amendment projects.

    ED 80 is expected to be published in July 2021 with a 60-day comment period.

    Natural Resources

    The IPSASB reviewed the draft Consultation Paper (CP) and considered the general description of natural resources. The IPSASB discussions focused on the overall approach to determining the recognition, measurement, and disclosure of items which fit into this general description of natural resources, and those that do not, as well as how the description relates to the specific topics included in the CP. The IPSASB also discussed the description, recognition, measurement, and disclosure of water.

    Revenue and Transfer Expenses

    The IPSASB continued its discussions on Revenue and Transfer Expenses topics identified during its review of responses to the Exposure Drafts. Based on discussions, the IPSASB decided to retain the current definition of a binding arrangement, with minor revisions, and clarified specific considerations when assessing enforceability of a binding arrangement. The IPSASB also discussed the definition of a liability in the context of the ongoing projects.

    Amendments to IPSAS 5, Borrowing Costs (Non-Authoritative Guidance)

    The IPSASB approved IPSAS 5, Borrowing Costs – Non-Authoritative Guidance, which reaffirms the IPSASB’s decision to maintain the accounting policy choice to capitalize or expense borrowing costs directly attributable to a qualifying asset. The non-authoritative guidance added includes implementation guidance and illustrative examples to clarify how to determine the extent to which borrowing costs can be capitalized.

    Conceptual Framework – Limited Scope Update-Next Stage

    The main issues discussed related to prudence and materiality. The IPSASB decided not to adopt prudence as a separate qualitative characteristic (QC). Prudence will be discussed as a reinforcement of neutrality in the context of the QC of faithful representation.

    The IPSASB also decided to add obscuring information to omitting and misstating information as factors that can influence the objectives of financial reporting - discharging accountability and decision making. Obscuring information by, for example, including immaterial disclosures can impair understandability.

    Accounting and Reporting by Retirement Benefit Plans

    The IPSASB decided the scope and the concept of a reporting entity in the Accounting and Reporting by Retirement Benefit Plans ED should be consistent with IAS 26, Accounting and Reporting by Retirement Benefit Plans. The IPSASB also decided the ED should require retirement benefit plans to prepare a statement of financial position, a statement of change in net assets available for benefits, a cash flow statement, notes to the financial statements and information on the changes of pension obligations.

    Next Meeting

    The next full-meeting of the IPSASB will take place virtually in September, 2021. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org)

  • IPSASB eNews: September 2020

    English

    The IPSASB held its third meeting of the year virtually on September 14-18 and 22, 2020.

    COVID-19: Deferral of Effective Dates

    The IPSASB approved COVID-19: Deferral of Effective Dates to defer the effective dates of the following standards and amendments by one year to January 1, 2023:

    • IPSAS 41, Financial Instruments;
    • IPSAS 42, Social Benefits;
    • Long-term Interests in Associates and Joint Ventures (Amendments to IPSAS 36);
    • Prepayment Features with Negative Compensation (Amendments to IPSAS 41);
    • Collective and Individual Services (Amendments to IPSAS 19); and
    • Certain amendments included in Improvements to IPSAS, 2019.

    The option to early-adopt the above standards or amendments continues to apply.

    ED 74, Non-Authoritative Amendments to IPSAS 5, Borrowing Costs

    The IPSASB approved Exposure Draft (ED) 74, Non-Authoritative Amendments to IPSAS 5, Borrowing Costs, and agreed on an exposure period ending March 1, 2021. ED 74 proposes implementation guidance and illustrative examples to clarify how to determine the extent to which borrowing costs can be capitalized.

    Public Sector Specific Financial Instruments

    The IPSASB approved Non-Authoritative Amendments to IPSAS 41, Financial Instruments, which includes additional implementation guidance and illustrative examples to clarify the requirements for classifying, recognizing, and measuring public sector specific financial instruments.

    The IPSASB agreed an effective date of January 1, 2023, to align with the effective date of IPSAS 41, Financial Instruments.

    Leases–IFRS 16 Alignment

    The IPSASB reviewed draft ED 75, Leases and the Request for Information on Concessionary Leases and Other Arrangements Similar to Leases. The IPSASB decided not to amend the lessee’s requirements in draft ED 75 on discount rates as no public sector specific issues were identified. The IPSASB intends to approve ED 75, Leases at its December 2020 meeting. 

    ED 76 and ED 77, Conceptual Framework-Limited Scope Update and Measurement

    The IPSASB continued developing its measurement hierarchy. The IPSASB agreed:

    • The hierarchy applies to subsequent measurement; 
    • The measurement bases and techniques in the hierarchy; and 
    • The allocation of measurement techniques to measurement bases. 

    The IPSASB will review draft EDs reflecting these decisions at its next meeting. The IPSASB will also further consider the approach to measurement at initial recognition and whether the definition of value in use should continue to include non-cash-generating assets or whether an alternative public sector concept should be developed.

    ED 79, Non-Current Assets Held for Sale and Discounted Operations

    The IPSASB approved ED 79, Non-current Assets Held for Sale and Discontinued Operations. This ED will be issued together with ED 76, Conceptual Framework—Limited Scope Update, ED 77, Measurement, and ED 78, IPSAS 17 Update (Comprehensive ED bringing together changes to IPSAS 17 from Measurement, Infrastructure Assets and Heritage Assets); all of which are currently noted for approval by the end of 2020 on the IPSASB’s work program.

    ED 78, IPSAS 17 Update, Heritage and Infrastructure

    The IPSASB completed its review of issues identified by constituents when accounting for heritage and infrastructure assets. The IPSASB agreed the proposed authoritative guidance, implementation guidance and illustrative examples would support constituents in applying the Property, Plant and Equipment principles to infrastructure and heritage items in practice. 

    The IPSASB will consider the proposed guidance in its entirety at its December 2020 meeting as part of its review of ED 78.

    Natural Resources

    The IPSASB agreed that a government’s sovereign power to issue licenses is not, in and of itself, an asset. The IPSASB also provided feedback on the staff’s survey to gather information regarding various jurisdictional legal frameworks for subsoil resources exploration, development and extraction, and on the draft structure of the consultation paper, its introduction and first chapter.

    Next Meeting

    The next meeting of the IPSASB will take place in December, 2020. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org). 

  • IAASB eNews July 2025

    English

    In this eNews you will find:

    •    Updates from our June meeting
    •    Our plans for Q3 2025
    •    Our plans to support the adoption and implementation of our standards
    •    Feedback submission form for our Technology Catalog
    •    Information about IFEA's Staff Fellows Program
    •    Key dates for this quarter

    Updates from Our June Meeting

    During our June 2025 meeting, we approved:

    We also discussed the following projects, where technology is a significant strategic driver:

    • Audit Evidence and Risk Response (Project Stage: Exposure Draft Development) – We discussed selected topics related to the revision of ISA 330, The Auditor’s Responses to Assessed Risks; ISA 500, Audit Evidence; and ISA 520, Analytical Procedures. The topics discussed included defining tests of details, analytical procedures (including substantive analytical procedures), using audit evidence obtained in previous audits, accepting records and documents as genuine, and alignment with concepts of ISA 315 (Revised 2019).
    • Technology Quality Management – We discussed our newly launched workstream, which will explore whether additional support is needed on how our quality management standards apply to emerging technologies. Among other matters, we discussed strategic questions designed to help shape the focus and priorities of the workstream’s information gathering activities.
    • ISA 500 series (Project Stage: Information Gathering) – We discussed initial issues identified for targeted standards in the ISA 500 series.

    Recordings of the meetings are available on our YouTube channel and more information on our projects can be found on the Latest on Our Projects web page.

    Looking Ahead: Our Plans for Q3 2025

    In addition to continuing our work on the projects highlighted above, we will also work on:

    • IAASB Handbook – We expect to release an updated version of our handbook in Q3.
    • Strategy and Work Plan – Together with IESBA, we will begin discussing our Strategy and Work Plan for 2028–2031. The Strategy and Work Plan for 2024–2027 is available on our website.
    • ISA for LCE – We will begin the maintenance of the ISA for LCE. The standard will be updated, in a proportionate manner, to remain aligned with our projects on Fraud and Going Concern.

    Supporting Adoption and Implementation

    We continue to support the adoption and implementation of our standards. Therefore, we plan to publish in Q3:

    More information on the resources published can be found on the SUPPORT & RESOURCES section of our website. Past webinars can be found on the PAST EVENTS web page.

    Technology: Submission Form for Feedback on the Catalog

    As part of our Technology Position, we conducted a gap analysis to ensure our standards align with technological advancements, resulting in the Catalog of Issues and Possible Actions. The Catalog is a “living” document that will be updated at least semi-annually. We have also developed a feedback process, allowing our stakeholders to share your feedback and insights on the Catalog.

    Submission Process

    Feedback will be collected electronically and kept private. While submissions will not be attributed to individuals, they may be referenced in IAASB public materials. Please avoid including confidential information.

    Consideration of Feedback

    All feedback will be reviewed. While we will not respond to individual submissions, input will be considered collectively in setting priorities and determining the urgency and type of responses.

    Share your feedback on the Catalog here.

    IFEA Staff Fellows Program

    The IFEA Staff Fellows Program is a unique secondment program that invites experienced professionals from around the world to temporarily join the IAASB or IESBA staff—contributing directly to international audit, assurance, and ethics standard setting. 

    As a Staff Fellow, you'll: 

    • Collaborate on global research, drafting, and stakeholder engagement 
    • Deepen your understanding of international standards and the standard-setting process 
    • Expand your global network 
    • Advance your professional development 

    For sponsoring organizations, the benefits are just as impactful: 

    • Enhance staff expertise and leadership 
    • Build stronger ties with the IAASB and IESBA 
    • Support the implementation of high-quality global standards 

    Applications are accepted year-round, but interviews typically take place in June–July for placements beginning in September. 

    Interested? 

    Key Dates for this Quarter

    Meetings 

     

  • IAASB eNews April 2025

    English

    In this eNews you will find:

    •    An update on our projects following our March 2025 meeting
    •    A look ahead at 2025
    •    Submission form for ISSA 5000 implementation feedback
    •    Key dates for this quarter

    Latest Updates from Our March Meeting

    During our March 2025 meeting, we approved:

    In addition, we approved the withdrawal of ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, once ISSA 5000 on sustainability assurance becomes effective as ISSA 5000 addresses all sustainability assurance engagements, including greenhouse gas-related information.

    We also discussed projects and initiatives on:

    • Audit Evidence and Risk Response (Project Stage: Exposure Draft Development) – We discussed selected topics related to the revision of ISA 330, The Auditor’s Responses to Assessed Risks; ISA 500, Audit Evidence; and ISA 520, Analytical Procedures. The topics discussed included stand-back requirements, the description and placement of automated tools and techniques, and tests of controls and substantive procedures.
    • Review of Interim Financial Information (ISRE 2410) (Project Stage: Information Gathering) – We discussed issues and challenges resulting from the project team’s information gathering activities and a draft version of the project proposal.
    • Technology Position – We discussed a revised version of the catalog of issues relating to technology to further shape our work program to consider the impact of technology.
    • ISSA 5000 Implementation – We discussed the adoption and implementation activities related to ISSA 5000.

    More information on our projects can be found on the Latest on Our Projects web page.

    Looking Ahead: Our Plans for Q2 2025

    Looking ahead, our work efforts over the coming months will focus on:

    • ISSA 5000 on sustainability assurance: We expect to publish a joint IAASB-IESBA frequently asked questions document, example assurance reports and hold a webinar series.
    • ISA for LCE: We expect to publish a frequently asked questions document.
    • Going Concern: We expect to publish a frequently asked questions document and video content.

    Submission Form for ISSA 5000 Implementation

    To support effective implementation of ISSA 5000, our sustainability assurance standard, the IAASB invites stakeholders to submit implementation questions or matters for the IAASB’s consideration.

    Submission Criteria

    Submissions should meet the following criteria:

    • Be directly related to the implementation of ISSA 5000.
    • Provide a detailed description of the question or matter, including sufficient context for proper understanding.
    • Be relevant to a broad group of stakeholders or common across multiple jurisdictions, as ISSA 5000 serves as a global baseline. The IAASB does not focus on national implementation or adoption issues, nor on assurance methodology.

    Submitting Process

    Once you have confirmed that your question or matter meets the criteria above and have completed the submission form, your submission will be lodged electronically and remain private. However, the issues raised may be discussed publicly or referenced in the IAASB’s public materials without specific attribution. While submission forms will remain private and confidential, please refrain from including any confidential information.

    IAASB Consideration of Submissions

    The IAASB will review and consider submissions and may also collaborate with the IESBA in doing so. The IAASB reserves the right to identify and explore relevant implementation issues and determine whether and the most appropriate means of addressing them. The IAASB will not issue responses to, or report back on, individual submissions. However, submissions will inform the IAASB’s priorities for guidance as well as the urgency and nature of the appropriate response.

    Key Dates for this Quarter

    Meetings 

  • IPSASB eNews: December 2024

    New York, New York English

    The IPSASB® was hosted by the Ministry of Finance of Saudi Arabia for our final meeting of the year from December 10 to 13 in Riyadh. Thank you to our hosts for providing such a welcoming experience and an impactful meeting to close out 2024.

    IFRIC Alignment – Narrow Scope Amendments

    The Board approved the Final Pronouncement, Amendments to IPSAS Standards: Specific IFRIC Interpretations which amends IPSAS Standards to clarify the application of existing principles to help public sector entities better understand and apply them consistently. These amendments are effective January 1, 2026. 

    Presentation of Financial Statements

    In our discussions on the statement of financial performance, we noted the usefulness of presenting revenue and expense items in categories with practical considerations that we‘ll explore at future meetings. We also discussed whether sufficient transparency exists for revenue and expense items presented outside surplus and deficit and how presentation requirements can enhance clarity and transparency. 

    Maintenance Activities

    As part of our 2024-2028 strategy, we're focusing on the maintenance of IPSAS Standards. We finalized operating procedures for post-implementation reviews and the IPSASB Application Group and discussed the timeline for implementing both activities. We are looking forward to rolling out both initiatives in 2025. 

    Sustainability: Research and Scoping

    Our first discussions related to researching potential future sustainability projects focused on our remit within the broader sustainability reporting landscape and how future research and scoping will inform our 2025 Work Program Consultation, which will seek feedback on our priorities in 2026 and beyond.

    Materiality

    The Making Materiality Judgement project discussions focused on research and scoping activities. We agreed the project should take a phased approach: financial reporting will be the focus of the initial phase, followed by sustainability reporting after the completion of the Climate-related Disclosures pronouncement. A project brief is expected to be approved in March 2025.

    Strengthening Linkages Between IPSAS and GFSM 2014

    In first discussions on the Strengthening Linkages Between IPSAS Standards and GFSM 2014 project, the IPSASB decided the project should have two phases: a phase highlighting the current alignment between IPSAS Standards and GFSM 2014, and a phase identifying opportunities to increase alignment between both reporting frameworks. The IPSASB expects to approve a project brief in March 2025.

    Meeting Videos

    Recordings of the meetings are available on our YouTube channel.

    Next Meeting

    Our next Board meeting will be hosted by the World Bank at their head offices in Washington, D.C., USA from March 18 – 21, 2025.

    2024 Handbook

    The 2024 Edition of the Handbook of International Public Sector Accounting Pronouncements is out now. It contains the complete suite of IPSAS Standards published as of January 31, 2024 including the 2023 Conceptual Framework updates.

    Adoption & Implementation Resources
    • Pathways to Accrual: Find resources helpful for planning and undertaking a transition from cash to accrual accounting including adopting and implementing IPSAS.
    • Implementing IPSAS: Download a package of training materials on IPSAS that can be tailored to the needs of training participants. 
    Open Consultations
    Open Calls
    • IPSASB Members: The global search for volunteer members to join our Board in 2026 is underway. If you have strong knowledge of issues related to financial and sustainability reporting, standard-setting experience, direct experience with public financial reforms, or familiarity with the needs of financial statement users, apply by January 31, 2025.
    • IPSASB Chair: The Search Committee is seeking a visionary leader capable of guiding the Board and the IPSASB staff through the evolving challenges of financial and sustainability reporting in the public sector. Apply by January 26, 2025.

  • IPSASB eNews: September 2024

    New York, New York English

    The IPSASB held its third meeting of the year from September 17-20 in Brussels, Belgium hosted by the European Commission. Recordings of the meetings are available on our YouTube channel.

    Sustainability-Climate-Related Disclosures
    The IPSASB broke new ground approving its first Sustainability Reporting Standard (IPSASB SRS™) Exposure Draft (ED) 1, Climate-related Disclosures. The ED proposes disclosures for all public sector entities to report on their climate-related risks and opportunities, aligned with the private sector disclosures developed by the International Sustainability Standards Board. The proposals also include additional public sector disclosures for those select entities with the responsibility to develop climate-related policy programs by exercising their sovereign powers. The IPSASB expects to publish the ED by the end of October 2024 and then undertake a global consultation to seek feedback from constituents on the proposals.
    Strategy and Work Program
    The IPSASB approved its Strategy and Work Program 2024-2028. The Strategy is an evolution of the Board’s previous strategy, adding a sustainability reporting work stream, and rebalancing its financial reporting resources to focus on the consistent implementation and application of standards as more entities transition to accrual IPSAS. The Strategy and Work Program 2024-2028 is expected to be published in October 2024.
    Natural Resources
    The IPSASB approved ED 92, Tangible Natural Resources. This ED proposes guidance that fills a gap in the current literature for naturally occurring items with physical substance that embody service potential and/or the capability to generate economic benefits. ED 92 is expected to be published by the end of October 2024.
    Natural Resources - Mineral Resources and Stripping Costs
    The IPSASB approved the final pronouncements IPSAS 50, Exploration for and Evaluation of Mineral Resources, and Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12). These new pronouncements provide guidance for public sector entities operating in extractive industries, with accounting guidance aligned with the private sector. They will be effective from January 1, 2027 with early adoption permitted, and are expected to be published in Q4 2024.
    Presentation of Financial Statements
    The IPSASB reviewed its draft Consultation Paper and the accompanying Illustrative ED based on the Board's deliberation of issues to date. The sections considered included the underlying principles for preparing financial statements and the specific requirements for presenting the Statement of Financial Position. The IPSASB expects to begin discussions on the presentation of the Statement of Financial Performance in December 2024.
    IFRIC Alignment – Narrow Scope Amendments
    The IPSASB reviewed the responses to ED 89, Amendments to Consider IFRIC Interpretations. Constituents strongly supported the proposed additional guidance because it will help public sector entities understand and apply existing accounting principles, thereby improving the clarity and accuracy of financial information. The IPSASB intends to approve a final pronouncement at its next meeting in December 2024.
    Next Meeting
    Adoption & Implementation Resources
    • Pathways to Accrual: Find resources helpful for planning and undertaking a transition from cash to accrual accounting including adopting and implementing IPSAS.
    • e-International Standards: Access the IPSASB’s standards and pronouncements on a convenient digital platform.
    • Implementing IPSAS: Download a package of training materials on IPSAS that can be tailored to the needs of training participants. 
    Open Consultations

  • IPSASB eNews: June 2024

    New York, New York English

    The IPSASB held its second meeting of the year from June 25-28 in Toronto, Canada. Recordings of the meetings are available on our YouTube channel.

    Other Lease-Type Arrangements

    The IPSASB approved the Final Pronouncement, Concessionary Leases and Other Arrangements Conveying Rights over Assets (Amendments to IPSAS 43, IPSAS 47, and IPSAS 48). The effective date for the relevant amendments is January 1, 2027.

    Measurement-Application Phase

    The IPSASB approved Exposure Draft (ED) 90, Amendments to IPSAS as a Result of the Application of IPSAS 46, Measurement. This ED proposes amendments to IPSAS to introduce current operational value, and add a definition of accounting estimates to IPSAS 3, Accounting Policies, Changes In Accounting Estimates and Errors. ED 90 will be published in Q3 2024 with a 120-day comment period.

    IPSAS 33–Limited Scope Update

    The IPSASB approved ED 91, Limited-scope Updates to First-time Adoption of International Public Sector Accounting Standards (IPSAS) (Amendments to IPSAS 33). This ED proposes amendments to existing requirements to emphasize exemptions available to those using the standard. The ED also proposes non-authoritative guidance to help clarify the standard's application for first-time adopters, including information to help identify the appropriate point to apply IPSAS 33 in their overall transition plan to accrual-basis IPSAS. ED 91 will be published in Q3 2024 with a 120-day comment period.

    Sustainability-Climate-Related Disclosures

    The IPSASB continued the development of the Climate-related Disclosures ED by reviewing the proposed principles on metrics and targets, transitional provisions, and general requirements. The IPSASB clarified that the ED will address public policy programs (such as regulations, taxation, subsidies, and incentives) that are explicitly designed to address climate-related risks and opportunities. The IPSASB plans to approve the ED at its September 2024 meeting.

    Natural Resources

    The IPSASB continued developing its Natural Resources ED by reviewing the draft specific matters for comment, core text, application guidance, and basis for conclusions. In addition, the IPSASB agreed on the topics for which implementation guidance and illustrative examples would be developed in the ED. The IPSASB plans to approve the ED at its September 2024 meeting.

    Strategy and Work Program

    The IPSASB reviewed the responses received to its 2024-2028 Strategy and Work Program Consultation. The proposals were strongly supported by stakeholders, which only required the IPSASB to make minor clarifications. The IPSASB plans to approve the final 2024-2028 Strategy and Work Program at its September 2024 meeting.

    Presentation of Financial Statements

    The IPSASB continued the development of its Consultation Paper and Illustrative ED related to the project to develop a replacement for IPSAS 1, Presentation of Financial Statements. The IPSASB considered several important project issues, including agreeing to retain the current/non-current distinction as the primary method for classifying assets and liabilities on the statement of financial position. The IPSASB will continue its deliberations on this project in September 2024.

    Next Meeting

    The next IPSASB meeting will be hosted by the European Commission in Brussels, Belgium from September 17 to 20, 2024.

    Adoption & Implementation Resources
    • Pathways to Accrual: Find resources helpful for planning and undertaking a transition from cash to accrual accounting including adopting and implementing IPSAS.
    • e-International Standards: Access the IPSASB’s standards and pronouncements on a convenient digital platform.
    • Implementing IPSAS: Download a package of training materials on IPSAS that can be tailored to the needs of training participants. 
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