Financial Reporting zone

Financial reporting briefs: January 2008

The International Auditing and Assurance Practices Board (IAASB) recently issued a series of new and replacement international accounting standards, and the Auditing Practices Board (APB) would welcome comments form the public pending its response.

The IAASB are proposing a replacement ISA 265, intended to improve communications between the auditor and management in deficiencies of internal control; a revised ISA 402, that aims to take into account the growing complexities arisen from the increasing use of third party service organisations; and four redrafted standards relating to the IAASB Clarity Project.

The IAASB Clarity documents may be read here. Responses and comments can be sent direct to the IAASB.

9 January - FSA penalties fall to six-year low

Despite the coming of the credit squeeze, poor general data security and the demise of Northern Rock, penalties handed out by the Financial Services Authority (FSA) for poor regulatory compliance in 2007 fell to their lowest level for six years.

According to new figures published by the City watchdog, it issued £5.3 million worth of fines over the past 12 months in comparison to last year's total of £13.3 million.

As well seeing an annual reduction of just over 60% in total penalties, the average individual fine decreased by a similar amount, from £470,000 to £232,000, representing a 51% reduction.

Notable fines issued in 2007 was the £1.26 million levied on Norwich Union for failing to prevent £3.3 million of identity fraud, and Nationwide Building Society’s £980,000 charge for inadequate data security measures after a staff laptop was stolen which contained confidential information on 11 million customers.

The publication of the FSA figures also shows that the body failed to hand out a multi-million pound fine for the first time in six years.

Previous financial reporting briefs:

December 2007
November 2007
October 2007
Septmeber 2007
August 2007
July 2007