The International Accounting Standards Board issued an amendment to the fair value option in International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement. In response to regulators’ concerns that the option provision in the 2003 revisions of IAS 39 might be misused, the IASB limited its application to financial instruments that meet certain conditions. The amendment takes effect January 1, 2006, with earlier application encouraged.
The IASB also amended International Financial Reporting Standard (IFRS) 1, First-time Adoption of International Financial Reporting Standards, and the Basis for Conclusions on IFRS 6, Exploration for and Evaluation of Mineral Resources. The amendments clarify the board’s intentions regarding an exemption for companies first adopting IFRSs before January 1, 2006. Information on both amendments is available at www.iasb.org/news .
The International Federation of Accountants (IFAC) released a revised Code of Ethics for Professional Accountants, which establishes a conceptual framework promoting the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior ( www.ifac.org/news ). It requires all accountants to identify threats to these principles and, where threats are identified, to apply safeguards to prevent the principles from being compromised. The revision is effective June 30, 2006, but may be implemented before then.
IFAC also issued an ED, Proposed Revised Section 290, Independence—Assurance Engagements ( www.ifac.org/eds ), proposing changes in the definition of the term network firm . The proposed revisions would classify one firm as a network firm of another if the two share a brand name or significant professional resources, revenues, profits, costs or expenses. Network firms are required to be independent of an audit client of a firm within the network. Comments are due September 30.
The International Auditing and Assurance Standards Board (IAASB) of IFAC released an international standard on review engagements (ISRE; www.ifac.org/guidance ) and two EDs of proposed international standards on auditing (ISA; www.ifac.org/eds ). ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, outlines the general principles of such a review, provides guidance on the inquiries, analytical and other review procedures the auditor performs and prescribes the review report’s content. The standard, which can be downloaded free at www.ifac.org/store , is effective for periods beginning on or after December 15, 2006, with earlier adoption permitted.
Comments on the two EDs—ISA 701, The Independent Auditor’s Report on Other Historical Financial Information, and ISA 800, The Independent Auditor’s Report on Summary Audited Financial Statements —are due October 31, 2005.