Together with ICAEW, The International Federation of Accountants (IFAC) today released the fourth installment in its Anti-Money Laundering: The Basics educational series: Installment 4: Asset Transfers.
The publication is part of a 6-month short series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment four examines asset transfers, one of the primary ways in which criminals layer or integrate the proceeds of crime into the legitimate economy.
Anti-Money Laundering: The Basics is featured on both the IFAC and ICAEW websites and available for download for free. IFAC is featuring the series on a new landing page alongside other relevant information on anti-money laundering (AML).
To be globally relevant, the Anti-Money Laundering: The Basics series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point.
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The revisions provide guidance that supports ISQM 2 in addressing the eligibility of an individual to serve in an EQR role, focusing on the critical attribute of objectivity. Among other matters, the guidance:
Elaborates on the need to identify, evaluate and address threats to compliance with the fundamental principle of objectivity that might arise in the appointment of an individual as an EQR for a given engagement;
Explicitly refers to and supports the requirement in ISQM 2 for a firm to establish, as a condition for eligibility, a cooling-off period of two years before an engagement partner can assume the EQR role on the same engagement; and
Emphasizes that this cooling-off requirement in ISQM 2 serves the dual objective of supporting compliance with the fundamental principle of objectivity and the high quality of engagements.
The guidance may also apply in situations where, as a safeguard to address identified threats to compliance with the fundamental ethics principles, an individual is appointed as an appropriate reviewer for work performed.
“It is in the public interest that individuals trusted to serve as engagement quality reviewers act with unquestioned objectivity, given the nature and importance of that role,” said IESBA Chairman Dr. Stavros Thomadakis. “This new guidance is intended to reinforce the guardrails around this important function. I commend the extensive coordination efforts between the IESBA and IAASB in finalizing this guidance, and acknowledge the Public Interest Oversight Board’s useful advice on this project.”
The enhanced guidance will become effective December 2022.
The IESBA believes a single set of high-quality ethics standards enhances the quality and consistency of services provided by professional accountants, thus contributing to public trust and confidence in the accountancy profession. The IESBA sets its standards in the public interest with advice from the IESBA Consultative Advisory Group (CAG) and under the oversight of the Public Interest Oversight Board (PIOB).
These revisions address the objectivity of an engagement quality reviewer (EQR) and other appropriate reviewers. This project dovetailed with the International Auditing and Assurance Standards Board’s (IAASB’s) development of International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews, which was finalized in December 2020.
ED 75 proposes an IFRS 16, Leases aligned model for lease accounting in the public sector. For lessees, as with the IPSASB’s previous proposals in ED 64, ED 75 proposes a right-of-use model that will replace the risks and rewards incidental to ownership model in International Public Sector Accounting Standard® (IPSAS®) 13, Leases. For lessors, ED 75 proposes to substantially carry forward the risks and rewards incidental to ownership model in IPSAS 13 in response to ED 64 comments and practical IFRS 16 implementation experience.
Issued alongside ED 75, the Request for Information will provide the IPSASB with further information on the issues that need to be considered in accounting for concessionary leases and other arrangements similar to leases that are quite common in the public sector. This will then allow the IPSASB to determine the nature and extent of the additional guidance required in phase two of the Leases project.
“In light of the responses to ED 64, Leases, and emerging practical experience with implementing IFRS 16, the IPSASB decided to revise its overall approach to the Leases project,” said IPSASB Chair Ian Carruthers. “The proposals in ED 75 will improve the transparency of lease accounting in the public sector, while allowing it to benefit from the private sector experience in implementing IFRS 16. The Request for Information will provide the IPSASB with further background on the more complex lease-related transactions common in the public sector, enabling the Board to decide what further guidance is required.”
How to Comment To access the Exposure Draft, its summary At-a-Glance document, and the Request for Information or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments are requested by May 17, 2021. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Consultation Paper to their members and employees.
About the IPSASB The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
Exposure Draft 75, Leases, and Request for Information, Concessionary Leases and Other Arrangements Similar to Leases
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