European audit reform trilogue
In the light of the trilogue discussions with the Lithuanian EU Council Presidency, the European Parliament and the European Commission on the European audit reform, FEE sent a letter to co-legislators and other interested parties on audit reform proposals. FEE draws attention to a number of key matters related to audit reform on which the co-legislators are expected to make decisions. This letter is more particularly focused on the difficult application in practice of some key elements of the proposals.

The trilogue discussions have so far not reached an agreement, the third trilogue hearing will take place on 4 December 2013. See also the press articles ‘EU ministers and MEPs in logjam over auditor rotation’ (Source: EurActiv), more..., and  ‘British MEP Sajjad Karim confident of deal on EU audit reform’ (Source: AccountancyAge). more...

 

Philippe Maystadt, special adviser to Commissioner Michel Barnier, presents his recommendations for enhancing the EU’s role in international accounting standard-setting.  more... FEE is very pleased for Mr. Maystadt to speak about his findings at the 2 December joint ACCA/FEE event. 
 

ESMA reviews Accounting Practices of financial institutions
The European Securities and Markets Authority (ESMA) has published a Review of the comparability and quality of disclosures in 2012 IFRS financial statements of listed financial institutions. more... ESMA will also provide suggestions to the International Accounting Standards Board (IASB) on those areas where it believes additional IFRS guidance can improve the quality and transparency of financial statements. Read the full report

 

The European Parliament committee on Legal Affairs presented a number of amendments to its draft report on the Proposed Directive on disclosure of non-financial and diversity information issued on 17 October 2013. The plenary debate in the European Parliament is expected to take place on 3 February 2014. See also the FEE factsheet on this issue.
 

On 15 November 2013, the Council of the European Union’s Ministers on Economic and Finance (ECOFIN) met in Brussels. On the agenda were International Accounting Standards (exchange of views on the adoption process, EFRAG governance and funding issues), standard VAT return (Council’s working group is expected to start examining the proposal in December), Taxation of savings income (broad support for the proposed amended directive) and prevention of money laundering (the aim of rapidly agreeing a general approach was confirmed). more...

 

Members of the European Parliament approved amendments to the so-called Solvency II legislation, which requires the EU's €8 trillion insurance industry to put in place capital buffers large enough to cover investment risks. Formal endorsement by the EU Council provided, Solvency II will become operational from 1 January 2016. more...

 

The European Commission has proposed amendments to the Council Directive on the taxation of parent companies and subsidiaries of different Member States. more... The revision of the Parent Subsidiary Directive is one of the measures as announced in the European Commission’s Action Plan for a more effective EU response to tax evasion and avoidance. more...

 

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its draft report on the proposed directive as regards a standard VAT return. more... The vote in the ECON committee is scheduled on 30 January 2014. The plenary debate is scheduled on 25 February 2013.
 

The European Commission has published practical guidelines to prepare businesses for the new VAT rules for telecoms and e-services, which will enter into force in 2015.
 

Taxation of the Digital Economy
The European Commission has appointed the members of the High Level expert group on Taxation of the Digital Economy it has created last month. The task of this small group of seven experts will be to identify improvements in the current way of taxing the digital economy in the EU, weighing up both the benefits and risks of various approaches. The first meeting of the group is planned to take place on 12 December 2013. more...
 

The OECD is also tackling the matter and seeks general comments regarding the appropriate approach to addressing the tax challenges of the digital economy. more...

 

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has tabled its report on the proposal for a Council directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation for the plenary debate scheduled on 10 December 2013. The vote in the plenary is scheduled on 11 December 2013. more...

 

The OECD invites public comments on a discussion draft on technical changes to be included in the next update to the current OECD Model Tax Convention. The aim is to incorporate clarifications, updates and editorial corrections. Deadline: 15 January 2014 more...

 

A joint committee draft report of the European Parliament committees on Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs on the proposal for a directive of the European Parliament and of the Council on the Prevention of the use of the financial system for the purpose of money laundering and terrorist financing has been tabled. The committee debate is scheduled for 22 January 2014 and the plenary sitting is due to take place on 11 March 2014. more...
 

The draft opinion of the Committee on Legal Affairs (JURI) has been adopted in its meeting on 26 November 2013. more... FEE is analysing the amendments and will contribute where appropriate.
 

The purpose of the handbook is to raise the awareness of tax examiners and auditors of issues concerning bribery and other forms of corruption and provide guidance on how to recognize indicators of possible bribery or corruption in the course of regular tax examinations and audits. more...

 

The report aims at helping national supervisory authorities when designing or, if necessary, revising and enhancing their own Risk Based Supervision (RBS) model. more...

 

The European Parliament has approved the Horizon 2020 package, a new, seven year research and innovation funding programme for investments and grants aimed at societal challenges (includes investments in health, energy, transport, climate action and freedom and security research projects), excellent science (includes grants to top-level individual researchers, and investments in future technologies and training for researchers), and industrial leadership (includes investments in biotechnology and space technologies, access to risk finance and support for innovative small firms). Adoption by the EU Council provided, Horizon 2020 will run from 2014 to 2020 with a budget of just over €70 billion. more... At least 11% of the Horizon 2020 budget should go to small and medium sized enterprises (SMEs). more...
 

The European Commission has already appointed 15 groups of independent experts to advise on priorities for Horizon 2020, amongst others expert groups on ‘Access to risk finance (debt and equity financing)’ and ‘Innovation in small and medium-sized enterprises (SMEs)’. more...

 

The European Parliament has also approved an EU programme for the Competitiveness of Enterprises and SMEs (COSME) for 2014-2020. more... COSME aims to facilitate and improve access to finance and markets for small and medium-sized enterprises (SMEs), support entrepreneurs and create more favourable conditions for business creation and growth. Formal endorsement by the EU Council provided, at least 60% of the programme’s €2.03 billion budget shall be used to provide funding through risk-capital or loan guarantees for SMEs. Other parts of the programme will focus on helping national authorities to reduce bureaucracy and SMEs to get access to markets. more...

 

The survey is part of a broader study requested by the European Commission on Corporate Income Taxation (CIT) in Europe. The objective of the study is to understand how different CIT tax regimes affect small and medium-sized entities (SMEs) compared with larger enterprises and to identify good practices in terms of SME taxation. It contains 30 multiple-choice questions and should not take longer than 15 minutes. more...

 

The report published by the European Commission finds that one out of three SMEs did not get the finance they needed in 2013. more... See also the press release.

 

2013 is likely to mark a turning point for the EU SMEs. After five years of an uncertain economic environment, 2013 is expected to be the first year since 2008 with a combined increase in aggregated employment and value-added of EU’s SMEs. The total employment in the EU SMEs is expected to increase by 0.3% and value-added by 1% as compared to 2011. Preliminary forecasts expect the positive developments further accelerating in 2014. more...

 

Further to the European Commission’s report on implementing harmonised public sector accounting standards (EPSAS), DG Eurostat has launched a public consultation on the governance principles and structures for such standards, in order to collect views from widest range of stakeholders. more... FEE will contribute.
 

The EU and the US held the second round of the Transatlantic Trade and Investment Partnership (TTIP) talks in Brussels from 11–15 November 2013. The next round of TTIP talks will take place in Washington DC in the week of 16 December. After the December round, the two Parties will take stock, identify areas of convergence and areas where political guidance might be needed. more...

 

The Council of the EU has adopted the revised Professional Qualifications Directive. The main features of the directive include the creation of a European professional card, partial access to certain professions and the recognition of traineeships. more... FEE had contributed to the whole process. more...

 

 

Are you a practitioner in a small- or medium-sized practice (SMP)? Then take the IFAC SMP Quick Poll. The poll should take only five minutes to complete and is being conducted semi-annually by IFAC in 2013 to take a snapshot of the key issues confronting SMPs and their SME clients. Polling will close on December 31, 2013. Look for the results in the next issue of the SMP eNews. See the results from previous polls on the IFAC website at IFAC SMP Quick Polls. 
 

The International Accounting Standards Board (IASB) announced the completion of a package of amendments to the accounting requirements for financial instruments (IFRS 9). The IASB is continuing to consider limited amendments to the classification and measurement requirements already included in IFRS 9 and is working on finalising the new expected credit loss impairment model. more...

 

The Notice of the Call sets out the upcoming opportunities for membership on the IFAC Board and Committees as well as the International Auditing and Assurance Standards Board (IAASB), International Accounting Education Standards Board (IAESB), International Ethics Standards Board for Accountants (IESBA), and International Public Sector Accounting Standards Board (IPSASB). more... The official Call for Nominations for the Independent Standard-Setting Boards in 2015 will be issued on 15 January 2014, and nominations may be submitted from 15 January to 15 March 2014.
 

Prof. Linda de Beer has been approved as the chair of the Consultative Advisory Group (CAG) to the International Auditing and Assurance Standards Board (IAASB) by the Public Interest Oversight Board (PIOB). As a member of the IAASB CAG, FEE wishes great success to Linda de Beer for this new mandate. more...

 

The IIRC pilot programme yearbook 2013 indicates how Integrated Reporting progressed over the last year and where it heads next. more...

 

 

FEE Board News
 

In their meeting on 5 November 2013, FEE Board members discussed FEE’s priorities in view of the forthcoming EU elections and appointment of the new European Commission, made final preparations for the FEE Members’ Assembly on 18 December 2013, endorsed applications for FEE membership from the Institute of Certified Accountants of Montenegro and the Serbian Association of Accountants and Auditors, discussed the outcome of Board and Working Party assessments as well as several of FEE events. They also adopted a number of comment letters featured in the section “recent publications”.

 

FEE President André Kilesse spoke at the 12th FCM Annual Conference in Tirana, Albania on 4 November 2013 about the ‘Role of the Audit Profession and Oversight Principles’.

FEE attended the 3rd meeting of the European Commission Working Group "Bolstering the Business of Liberal Professions" on 5 November 2013. This group convenes representatives of the Commission and European and national organisations of liberal professions in order to promote support activities and ensure that their needs are at the base of the European policy in this field.

FEE hosted the Board strategy meeting of the Norwegian Institute of Public Accountants (DnR) on 6 and 7 November 2013. FEE CEO Olivier Boutellis-Taft presented how the EU is functioning and the main challenges facing the accountancy profession. FEE Deputy CEO Hilde Blomme updated participants on the current status of the Audit Policy debate.

FEE CEO Olivier Boutellis-Taft attended IFAC’s Council and Board meeting on 13 - 15 November 2013 in Seoul, South Korea. He spoke on a panel on ‘Key Developments in Ethics’.

FEE President André Kilesse addressed the ACCA Council on 23 November 2013 in London, UK.

FEE President André Kilesse and FEE Deputy CEO Hilde Blomme were invited to meetings of EGIAN, the European Group of International Accounting Networks and Associations, on 26 and 27 November 2013 in Frankfurt am Main, Germany. André Kilesse informed participants of the SME Market Focus Group about FEE’s objectives and activities regarding SME/SMPs.

Hilde Blomme attended the main meeting and updated participants on EU matters accounting, auditing, tax, public sector accounting and SMEs/SMPs.

Myles Thompson, Chair of the FEE Auditing Working Party, represented FEE as a panellist at a conference on auditor reporting jointly organised by ACCA and FRC.

The following FEE Working Parties held meetings or conference calls in November to proceed with their projects, their major agenda items debated are highlighted below:

• 6 November: Banks Working Party: Country-by-country reporting under CRD IV

• 14 November: Accounting Working Party: IASB Discussion Paper ‘A Review of the Conceptual Framework for Financial Reporting’

• 27 November: Corporate Reporting Policy Group: EFRAG and ARC Governance Review, Integrated Reporting developments

• 28 November: Auditing Working Party: Auditor reporting matters, audit policy, IAASB work plan