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	ISSUE 5 \| MAY 2022


	At-A-Glance Diversity, equity and inclusion (DEI) considerations have been a focus of attention in the business community. The accounting profession is no exception. Recent reports indicate where progress has been made in many areas of concern, while pointing out where more can be done. This edition of the Audit & Accounting Alert highlights the results from a number of pertinent reports. Our Worldwide Update is again split into two sections. The first covers COVID-19 news from organizations across the globe, while the second covers other news.


	Gerald Herter - Editor


	Diversity, Equity and Inclusion in the Accounting Profession Spotlight Studies report progress and challenges


	The status of diversity, equity and inclusion (DEI) has received an increasing amount of attention in recent years generally, as well as in the accounting profession. The November 2018 edition of the Audit & Accounting Alert, referred to a survey from the CFA Institute that analyzed the proportion of women that were audit firm partners, CEO’s, or Board members of public firms at that time. The results were underwhelming. Only 15% of the lead engagement partners were women, while 5% of CEO’s were women and 21.2% of corporate board members were women. In a new study, “Diversifying Global Accounting Talent: Actionable Solutions for Progress,” issued April 21, 2022, jointly by Institute of Management Accountants (IMA), the California Society of CPAs (CalCPA) and the International Federation of Accountants (IFAC), along with fintech company World Wide Generation, the perception of diversity was further assessed. The study found that while overall impressions of diversity have improved, with about two-thirds of males indicating that the profession was equitable and inclusive, less than 60% of females thought so. In the United States only a third or so of women believed that the profession was equitable and inclusive. According to the study, “More than 40% of female respondents in each region studied, and as many as 73% of women in the U.S., cited instances of bias affecting recruitment, assignments, peer-to-peer interactions, promotions, compensation, mentoring and sponsorship, and retention efforts, including the following factors: • Women do not consistently receive fair treatment in the recruitment process. • Women do not have equitable access to sponsors or mentors within their organization. • Leaders demonstrate unfair prejudice or bias against women that negatively affects promotion. • There is greater emphasis on recruitment than retention of women.” The study also found that the proportion of women in leadership positions was less than for men, and that the lack of equitable and inclusive factors played a role in women leaving their jobs and the profession. These conditions appeared to be prevalent for other minorities as well, though there was less data available to draw from. Responding to the revealed concerns, the developers of the report conducted extensive research that resulted in an inventory of 79 specific actions that organizations can take to advance the cause of DEI. In recent years, accounting for sustainability has been characterized by the three areas of environmental, social and governmental, or ESG. The workforce falls into the S, the social aspect of sustainability. Recognizing that the United Nations in 2015 adopted 17 Sustainability Development Goals, each with related targets, the study identified the five goals that corresponded to the workplace, and focused the actionable items around them. The actions fall into one of the two strategic objectives of 1) attracting diverse talent or 2) retaining and promoting diverse talent. Wherever an organization is in the process of their DEI program, the actionable items should be immensely helpful in working toward the goals as well as for fleshing out the details for sustainability disclosures in financial statements. Other recent reports have weighed in on DEI. A group led by the Association for Accounting Marketing conducted a survey in the spring of 2022 to assess how accounting firms are progressing. Of the firm marketing personnel responding, about half indicated that the firm had done something about DEI. While about 60% would recommend their firm to others, only a third or so of non-white respondents would do so. Also, while a majority felt that their firm was at least on par with other firms, 40% felt their firm was behind on DEI measures. In another demographic, MAX Solutions, an Australian employment firm, in the fall of 2021 issued a survey report, “Breaking the Age Barrier,” that addressed the challenges of older people gaining employment. 85% of their mature age customers believed that employers were reluctant to hire them, while 30% of employers acknowledged that reluctance. On a positive note, the Office of Minority and Women Inclusion (OMWI) of the U.S. Securities and Exchange Commission (SEC), published on May 2, 2022, the “2020 Diversity Assessment Report, Diversity and Inclusion in the Financial Securities Industry,” summarizing responses to a voluntary self-assessment of diversity policies and practices within financial firms. 98% of respondents’ firms consider diversity and inclusion in strategic plans covering employment practices. 70% proactively promote a diverse pool of candidates for their corporate boards. 88% include diversity and inclusion practices and 62% show results on their websites. 55% keep lists of minority and women owned businesses that can compete for contracts. While these reports just scratch the surface of the DEI issues that impact sustainability for accounting firms and their clients, the trend indicates that progress has been made, and greater attention has been focused in this area. The practical tools will be helpful as firms strive to attain a more equitable workplace and society. Also, Deloitte, a longtime proponent of DEI, has recently launched the DEI Institute, a new service area to assist organizations toward enhanced productivity and profits through a culture of diversity. Further details can be found at Diversifying Global Accounting Talent: Actionable Solutions for Progress.


	Worldwide Update Periodic roundup of recent and upcoming actions and activities by auditing and accounting organizations throughout the world.


	COVID-19 Related International IASB – International Accounting Standards Board (www.ifrs.org) Coronavirus Information and resources – link – https://www.ifrs.org/news-and-events/2020/03/the-coronavirus-and-the-foundations-work/ IFAC – International Federation of Accountants (www.ifac.org) COVID-19 Resources from IFAC's Network – link - https://www.ifac.org/knowledge-gateway/series/COVID-19-resources-ifacs-network ACCA – Association of Chartered Certified Accountants (www.accaglobal.com/) Coronavirus Information and resources – link - https://www.accaglobal.com/us/en/cam/coronavirus.html Update on the Coronavirus and Impact for Association Activities – link - https://www.cimaglobal.com/Members/Update-on-Coronavirus/ CIMA – Chartered Institute of Management Accountants (www.cimaglobal.com) Update on the Coronavirus and Impact for Association Activities – link - https://www.cimaglobal.com/Members/Update-on-Coronavirus/ VRF- The Value Reporting Foundation (www.thevrf.org) The Value Reporting Foundation is the result of the merger of the International Integrated Reporting Council and the Sustainability Accounting Standards Board on June 9, 2021. World Economic Forum – (www.weforum.org) The COVID Action Platform – link - https://www.weforum.org/platforms/covid-action-platform - focuses on three priorities: 1. Galvanize the global business community for collective action. 2. Protect people’s livelihoods and facilitate business continuity. 3. Mobilize cooperation and business support for the COVID-19 response.


	Africa, Europe, India, and the Middle East (AEIME) FRC – Financial Reporting Council of the UK (www.frc.org.uk) FRC guidance for companies and auditors during COVID-19 crisis – link - https://www.frc.org.uk/covid-19-guidance-and-advice. ICAEW - Institute of Chartered Accountants in England and Wales (https://www.icaew.com/) Coronavirus – updates – link - https://www.icaew.com/insights/coronavirus. EFRAG – European Financial Reporting Advisory Group (www.efrag.org) No new developments


	Americas, Asia, Australia and New Zealand (AAANZ) AICPA – American Institute of Certified Public Accountants (www.aicpa.org) AICPA Coronavirus (COVID-19) Resource Center – link - https://www.aicpa.org/news/aicpa-coronavirus-resource-center.html FASB – Financial Accounting Standards Board (www.fasb.org) FASB Response to COVID-19 – link - https://www.fasb.org/COVID19 GASB – Governmental Accounting Standards Board (www.gasb.org) GASB Response to COVID-19 – link - https://www.gasb.org/COVID19 COSO - The Committee of Sponsoring Organizations of the Treadway Commission (www.coso.org) No new developments PCAOB – Public Company Accounting Oversight Board (www.pcaob.org) PCAOB Response to COVID-19 – link - https://pcaobus.org/Pages/response-to-COVID-19.aspx SASB – Sustainability Accounting Standards Board (www.sasb.org) See The Value Reporting Foundation above. SEC – Securities and Exchange Commission (www.sec.gov) SEC Coronavirus (COVID-19) Response – link - https://www.sec.gov/sec-coronavirus-COVID-19-response CAANZ - Chartered Accountants Australia and New Zealand (https://www.charteredaccountantsanz.com/) Financial Reporting and Audit Guide: Financial reporting and audit issues stemming from COVID-19 – link - https://www.charteredaccountantsanz.com/tools-and-resources/client-service-essentials/reporting/financial-reporting-and-audit-guide-financial-reporting-and-audit-issues-stemming-from-covid19


	Other Updates International IASB – International Accounting Standards Board (www.ifrs.org) Compilation of Agenda Decisions Volume 6, published May 5, 2022. These agenda decisions help with understanding issues relating to IFRS 9 Financial Instruments, IFRS 16 Leases, IAS 7 Statement of Cash Flows, and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. IFAC – International Federation of Accountants (www.ifac.org) International Public Sector Accounting Standards Board - Advancing Public Sector Sustainability Reporting, consultation paper issued May 9, 2022, “to evaluate the demand from stakeholders for global public sector specific sustainability reporting guidance, as well as the degree of support for IPSASB developing such guidance, the priority areas for coverage, and how this might be approached.” Comment period ends September 9, 2022. International Public Sector Accounting Standards Board - International Public Sector Accounting Standard (IPSAS 44), Non-current Assets Held for Sale and Discontinued Operations, issued May 4, 2022, “specifies the accounting for assets held for sale and the presentation and disclosure of discontinued operations.” Effective January 1, 2025, with early application permitted. International Ethics Standards Board for Accountants (IESBA) - Benchmarking International Independence Standards Phase 1 Report: Comparison of IESBA and US SEC/PCAOB Frameworks, report released May 6, 2022. “The publication details the findings of a study comparing the provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code)—in particular the independence provisions applicable to audits of financial statements of public interest entities (PIEs)—with the relevant rules of the U.S. Securities and Exchange Commission (SEC) and the US Public Company Accounting Oversight Board (PCAOB). International Auditing and Assurance Standards (IAASB) - The Fraud Lens – Interactions Between ISA 240 and Other ISAs, guidance issued May 5, 2022, “illustrates the relationship and linkages between International Standard on Auditing (ISA) 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, and other ISAs when planning and performing an audit engagement and reporting thereon.” Anti-Money Laundering, The Basics, Installment 9 - Tools to Fight Back, released April 27, 2022, “highlights the tools the professional accountant has at their disposal to fight back against money laundering.” Mindset and enabling skills of professional accountants - A Competence Paradigm Shift: Paper 4, released April 27, 2022, “recognizes that the accountancy profession has a strong foundation to build on, but an enhanced technological literacy is essential in the information age.” Audit Fees Survey 2022: Understanding Audit and Non-Audit Service Fees, 2013-2020, study issued April 25, 2022, “to answer questions about the cost of audit and how it compares to the fees companies pay for other professional services provided by statutory auditors.” Diversifying Global Accounting Talent: Actionable Solutions for Progress,” report issued April 21, 2022. See article in this issue for details. ACCA – Association of Chartered Certified Accountants (www.accaglobal.com) Accounting for a better world: priorities for a transforming profession, report released April 12, 2022, provides “an overview of the contribution the profession could make in transforming the world for the better. It identifies seven core areas of focus, as well as sharing case studies and stories - bringing to life why the accountancy profession matters, and why it remains integral in helping economies and wider society to advance in the future. CIMA – Chartered Institute of Management Accountants (www.cimaglobal.com) No new developments. VRF - The Value Reporting Foundation (www.thevrf.org) No new developments. IIRC - International Integrated Reporting Council (www.theiirc.org) See The Value Reporting Foundation above. World Economic Forum – (www.weforum.org) The promise of TradeTech: Policy approaches to harness trade digitalization, report published April 12, 2022. “TradeTech – the set of technologies that enables global trade and its digitalization – is a critical part of supply chain resilience and a path to more efficient and inclusive trade… Emerging technologies, such as artificial intelligence, blockchain and distributed ledger technology, paired with international policy coordination could propel global trade and accelerate economic recovery.”


	Africa, Europe, India, and the Middle East (AEIME) FRC – Financial Reporting Council of the UK (www.frc.org.uk) No New Developments ICAEW - Institute of Chartered Accountants in England and Wales (https://www.icaew.com/) No New Developments EC – European Commission (https://ec.europa.eu/) No New Developments EFRAG – European Financial Reporting Advisory Group (www.efrag.org) Exposure Draft - European Sustainability Reporting Standards (ESRS), issued April 29, 2022, are the first set of standards and “cover the full range of sustainability matters: environment, social, governance and cross-cutting standards.” Comment period ends August 8, 2022. EFRAG's Recommendations and Feedback Statement on Accounting for Crypto-Assets (Liabilities), released April 29, 2022, “summarises the main comments received by EFRAG on its Discussion Paper - Accounting for Crypto-Assets (Liabilities) (the 'EFRAG DP') and includes EFRAG's recommendations for developing IFRS requirements for crypto-assets (liabilities).”


	Americas, Asia, Australia and New Zealand (AAANZ) AICPA – American Institute of Certified Public Accountants (www.aicpa.org) No new developments FASB – Financial Accounting Standards Board (www.aicpa.org) Exposure Draft - Reference Rate Reform (Topic 848) and Derivatives and Hedging (Topic 815) - Deferral of the Sunset Date of Topic 848 and Amendments to the Definition of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rat, issued April 20, 2022, “would extend the period of time preparers can utilize the reference rate reform relief guidance and expand the Secured Overnight Financing Rate (SOFR)-based interest rates available as benchmark interest rates. Comment period ends June 6, 2022. GASB – Governmental Accounting Standards Board (www.gasb.org) Statement 99: Omnibus 2022, issued May 9, 2022, contains guidance addressing various issues from prior GASB statements. Generally effective for various periods beginning after June 15, 2022. COSO - The Committee of Sponsoring Organizations of the Treadway Commission (www.coso.org) No new developments PCAOB – Public Company Accounting Oversight Board (www.pcaob.org) No new developments SASB – Sustainability Accounting Standards Board (www.sasb.org) No new developments SEC – Securities and Exchange Commission (www.sec.gov) 2020 Diversity Assessment Report, published May 2, 2022, “analyzes information received from regulated entities in response to Office on Minority and Women Inclusion’s 2020 invitation to conduct and submit voluntary self-assessments of their diversity policies and practices.” See article in current issue for further details.


	Additional A&A News Authenticity Sells in Accounting The ASC 842 leasing standard) U.S. bans accounting services to Russia in added sanctions Accounting for employee retention credits SEC climate proposal would expand auditors’ roles SEC adds China's JD.com to list of over 80 firms facing delisting risk Accounting Today's complete coverage of the coronavirus impact Accountancy Age's Resource on UK regulations on accountancy during coronavirus California CPA Society Coronavirus Resources and Information Accountingweb's Coronavirus Content Series Accountancy Daily Corona Virus Resources China Briefing's Coronavirus Insights for Your Business in China


	Audit & Accounting Alert is a publication of Integra International intended to highlight emerging issues in the profession. The goal is to give Integra members an awareness of developments impacting the practice of Audit & Accounting enabling them to stay on the forefront of industry trends.This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors forspecific advice. Editor Gerald E. Herter Email: [email protected] www.Integra-International.net © 2021 Integra International. All Rights Reserved. If you wish to stop receiving email from us, you can simply remove yourself by visiting http://members.integra-international.net/members/[email protected]ational.net&h=d50d3dcd13bded266b7434d33633377b4a1b363a.