The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
U.K. financial-report preparers and investors continue to favor adopting international financial reporting standards (IFRS) once the U.K. leaves the European Union, a spokesman for the U.K. Financial Reporting Council told Bloomberg BNA.
“That is what we are hearing still,” Peter Timberlake said in a March 28 email response to follow-up questions initially submitted to FRC in June 2016 after U.K. voters approved a referendum to split the nation from the EU.
The council establishes accounting, auditing and actuarial standards for the U.K. and the Republic of Ireland.
The U.K. on March 29 formally triggered the procedure to divorce the country from the EU, known as Brexit.
After the separation is complete—a process expected to take up to two years to finalize—the U.K. no longer will transpose into national law the IFRS that the EU approves and incorporates into legislation.
As a result, the U.K. either will have to choose an existing system for setting accounting standards or create a new one.
No U.K. industries in particular would feel Brexit’s impact on their accounting and auditing activities “unless we change the requirements, which we are not doing,” Timberlake said.
Brexit also wouldn’t change IFRS already adopted in the U.K., he said in June 2016, unless Parliament votes to amend or repeal particular standards.
“Parliament and the government will have to decide which parts of (EU) legislation will be discarded, and it can’t be assumed that every piece of legislation will be overturned,” Timberlake said last year.
FRC will continue to participate in European accounting and auditing bodies as the Brexit process moves ahead, according to Timberlake’s March 28 email.
This includes working with the Committee of European Auditing Oversight Bodies (CEAOB)—formerly known as the European Audit Inspection Group—and the European Financial Reporting Advisory Group (EFRAG), both of which collaborate with the European Commission.
The council contributes funding to EFRAG and serves on the group’s 16-member governing body, the General Assembly.
FRC’s roles in EFRAG and CEAOB once Brexit takes effect—including whether to continue providing financial support to EFRAG—still must be determined.
“Our participation after the UK leaves the EU will depend on the terms of Brexit,” Timberlake said.
FRC doesn’t plan to address any EU standards over the next two years as Brexit negotiations proceed, he said.
Any additional disclosure requirements for audits that the EU might adopt, for example, would be handled though the council’s international standards on audit (ISA).
“If further EU legislation required the inclusion of further information in an annual report, auditors will audit that in accordance with ISA (UK) 720,” Timberlake said.
Amid Brexit uncertainty over the next few years, FRC won’t sit back and simply watch events unfold, the council said in a February 2017 report on auditing.
Along with enhancing audit enforcement, “our proposed priorities also include playing an active role with other regulators in helping address the challenges and opportunities of Brexit and remaining influential internationally,” it said.
To contact the reporter on this story: David R. Jones in London at firstname.lastname@example.org
To contact the editor responsible for this story: S. Ali Sartipzadeh at email@example.com
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)