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ASIC has released its focus areas for full and half-years ending 31 December 2022:

• asset values
• provisions
• solvency and going concern assessment
• events occurring after year end and before completing the financial report
• disclosures in the financial report and operating and financial review.

Although the areas are targeted to companies subject to ASIC reviews, the changing circumstances, uncertainties and risks highlighted will also impact public sector entities and their auditors:

• the availability of skilled staff and expertise, which can impact on revenue and costs
• the impact of rising interest rates on future cash flows and on discount rates used in valuing assets and liabilities
• inflationary impacts that may differ between costs and income
• increases in energy and oil prices
• geopolitical risks, including the Ukraine/Russia conflict
• impacts of climate change and climate related events
• commitments and policies on climate and carbon emissions by governments
• technological changes and innovation
• COVID-19 conditions and restrictions during the reporting period
• changes in customer preferences and online purchasing trends
• use of virtual meetings and more flexible working arrangements
• the discontinuation of financial and other support from governments, lenders and lessors, including any possible increases in the level of insolvencies
• legislative and regulatory changes
• other economic and market developments.

The Australian Securities & Investments Commission released its report on the findings from its audit inspections for 12 months to 30 June 2022. The inspection covered 45 audit files at 14 firms and focused on 146 key audit areas.

The report shows an overall increase in the percentage of negative findings from 32% last year to 36% this year, with the largest number of negative key audit area findings continuing to relate to revenue and receivables and asset values and impairment of non-financial assets. Other areas of ASIC’s findings included the audit of inventories, taxation, investments and financial instruments, expenses and payables and provisions.

As the audit areas of revenue and receivables, and asset values and impairment of non-financial assets have historically had large numbers of negative findings, the report includes case studies of good practice on these key audit areas.

ASIC stated that the increase in negative findings is potentially due to their focus on a small number of high-risk audits and higher risk key audit areas, inclusion of audits of large unlisted entities and the impact of COVID-19 conditions.

Although the results are specific to private sector listed and unlisted entities, the report will be of interest to all audit firms, directors, audit committees and other stakeholders interested in financial reporting and audits.

The Public Accounts Committee (PAC) issued their report on the quadrennial review of the Audit Office of New South Wales (the ‘Audit Office’). The PAC appointed O’Connor Marsden and Associates to conduct the statutory review. The report showed that the Auditor-General is complying with auditing standards and practices in carrying out the functions under the Government Sector Audit Act 1983 and that the Audit Office is well functioning and staffed by professional and dedicated auditors.

The report made six recommendations to further strengthen and improve the effectiveness and efficiency of the Audit Office. Two of recommendations are directed to PAC around engaging Parliament to better support the powers and independence of the Auditor-General and the Audit Office. The other recommendations were addressed to the Audit Office.

Following this report, the NSW Government has responded to the recommendations made in the report.

NSW Treasury released TPG22-21 NSW Public Private Partnership Policy and Guidelines: Preparation, Procurement and Contract Management (the Guidelines), which are based on the following principles:

• ensure PPPs are procured in a professional and transparent manner, minimising tender costs and providing fair opportunity to all prospective private sector participants
• ensure consistency of risk allocation between PPPs in NSW, except where there are project specific reasons to depart from this risk allocation
• ensure stability of PPP delivery structures, with sustainable debt financing and robust commercial and financial structures
• the NSW Government will not guarantee private sector borrowings
• the delivery and operation of service enabling public infrastructure with an acceptable level of risk retained by the State
• encourage innovation in the provision of infrastructure and service delivery
• ensure the timely disclosure of information on contracts and tenders
• support a collaborative approach to risk allocation between Government and the private sector, consistent with principles outlined in the NSW Government’s 10-point commitment to the construction sector.

The Guidelines are mandatory for all GSF agencies and replace the following pronouncements:

• TPP17-07 – NSW Public Private Partnership Guidelines 2017
• TC15-16 – Managing Public Private Partnership (PPP) Contracts
• TPP15-02 – Budgeting for Availability based Public Private Partnerships.

The Guidelines are intended to provide Responsible Agencies, private sector participants, advisers and other stakeholders with a streamlined guide on the NSW Government specific requirements for PPP preparation, procurement and management. These Guidelines have been approved by the NSW Government Cabinet Infrastructure Committee of Cabinet.

The Guidelines apply to a wide range of projects and encompass both User-charge PPPs and Availability PPPs. Generally, the Responsible Agency, subject to being accredited in accordance with the accreditation program for construction procurement, has overall responsibility for procuring and delivering a PPP consistent with these Guidelines, and for ensuring the project will meet its service delivery requirements and relevant outcome-focused performance objective.

NSW Treasury has also published the PPP Assessment Framework ‘Guidance for completing a qualitative assessment on a project’s PPP suitability at Strategic Business Case stage to inform the Procurement Strategy’ to provide guidance to Responsible Agencies for completing an initial, high-level, qualitative assessment to determine whether a capital project is potentially suitable for a PPP.

Topics discussed included:

AASB Meeting Highlights – 14-15 December 2022

• fair value measurement for not-for-profit public sector entities
• insurance activities in the public sector
• sustainability reporting
• amending standards – non current liabilities with covenants and corrections and repeals
• service performance reporting
• intangible assets
• research update.

AASB Meeting Highlights – 10 November 2022

• sustainability reporting
• proposed amendments to IFRS for SMEs and the possible effect on AASB 1060
• lease liability in a sale and leaseback
• insurance activities in the public sector
• auditor engagement-related disclosures

Latest news, accounting standards and work-in-progress documents from the AASB included:

Topics discussed included:

IASB Meeting Highlights – 13-15 December 2022

• goodwill and impairment
• maintenance and consistent application – lack of exchangeability (amendments to IAS 21)
• financial instruments with characteristics of equity
• equity method
• rate-regulated activities
• digital financial reporting strategy
• disclosure initiative – subsidiaries without public accountability: disclosures.

IASB Meeting Highlights – 22-24 November 2022

• maintenance and consistent application – OECD Pillar 2
• maintenance and consistent application – supplier finance arrangements
• business combinations under common control
• rate-regulated activities
• post implementation review of IFRS 9
• dynamic risk management
• IFRS 9 amendments to classification and measurement
• goodwill and impairment
• disclosure initiative – subsidiaries without public accountability: disclosures

IASB Meeting Highlights – 18-20 October 2022

• rate-regulated activities
• contractual cash flow characteristics
• equity method
• taxonomy
• disclosure initiative – targeted standards-level review of disclosures
• maintenance and consistent application – IFRIC update and provisions
• post implementation review of IFRS 9
• disclosure initiative – subsidiaries without public accountability: disclosures
• goodwill and impairment

Latest news from the IFRS Foundation included:

Topics discussed included:

IPSASB Meeting Highlights – 6-9 December 2022

• conceptual framework – limited scope update – measurement
• property, plant, and equipment
• measurement
• other lease-type arrangements
• sustainability reporting
• transfer expenses/revenue
• conceptual framework – limited scope – next stage
• presentation of financial statements.

IPSASB Meeting Highlights – 27 October 2022

• conceptual framework – limited scope update – measurement
• other lease-type arrangements
• sustainability reporting board update.

Recent news from the IPSASB included:

Topics discussed included:

AUASB Meeting Highlights – 28-29 November 2022

• 2022-23 technical work plan – update
• sustainability – update
• LCE group audits exposure draft – update
• public sector guidance statement – update
• audit evidence exposure draft – approval
• not-for-profit assurance (including GS019 withdrawal)
• IAS 1 changes and impact on AUASB standards – update
• key audit matters consultation paper – approval
• technology PAG – update
• audit quality – update
• review for ‘Matters for AUASB’ in ANCAAR research report.

Latest news from the AUASB included:

Topics discussed included:

IAASB Meeting Highlights – 5-9 December 2022

• strategy & work plan 2024-2027
• audits of less complex entities
• going concern
• fraud
• listed entity & PIE
• sustainability assurance.

Latest publications from the IAASB included:

Topics discussed included:

APESB Meeting Highlights – 7 December 2022

• proposed revisions to APES 215 Forensic Accounting Services
• proposed revisions to the non-assurance service provisions of APES 110
• update on sustainability
• update on awareness of APESB pronouncements
• update on post implementation review for APES 305 and APES GN 30
• project update on technology project
• world congress of accountants 2022
• update from CPA Australia on sustainability initiatives

Latest news and media releases from the APESB included:

Topics discussed included:

IESBA Meeting Highlights – 29 November, 2, 7 & 15 December 2022

• sustainability
• engagement team – group audits independence
• tax planning
• technology project
• IESBA strategy and work plan 2024-2027
• public interest entity rollout.

IESBA Meeting Highlights – 1 November 2022

• sustainability

Latest news and publications from the IESBA included:

Treasury’s recent releases and other guidance included:

DPC released the following memos and circulars:

PSC released the following circulars and memos:

NSW Procurement Board’s recent Directions included:

Inquiries and Reports tabled in NSW Parliament included:

Inquiries and Reports tabled in NSW Parliament included:

Recent publications included:

Recent media releases included:

Recent IPART media releases, and other materials included:

Recent news included: