Save content
Have you found this content useful? Use the button above to save it to your profile.
UK Endorsement Board stirs into life AccountingWEB
iStock-_sezer_ozger_uk_overhaul

UK Endorsement Board stirs into life

by

In case you missed it, the organisation responsible for approving international accounting standards for use in the UK has been undergoing an overhaul.

6th Sep 2022
Save content
Have you found this content useful? Use the button above to save it to your profile.

After being appointed the permanent chair of the UK Endorsement Board (UKEB), chartered accountant and interim chair Pauline Wallace has freshened up the standard-setting body with two new board members.

Wallace’s term of office was announced on 30 August and will officially start on 11 September 2022. As the interim chair for the past two years, she appointed the UKEB’s inaugural board and oversaw the adoption of its first major international accounting standard, IFRS 17 Insurance Contracts.

The official transition does not seem to have held up her recruitment activities, as two days later Wallace today announced the appointment of former Deloitte economist Robin Cohen and former HSBC managing director Edward Knapp to the board. The newcomers join a 13-strong committee made up of the great and the good from big accounting firms and other prominent City organisations. 

A few days later, the board set up its first ad-hoc advisory group to explore issues affecting preparers of accounts for rate-regulated industries and put out a call for volunteers to join it.

What do you do?

What is this UKEB of which we speak and why does it matter, you might ask. It actually plays a key role in shaping the accounting standards used by listed UK companies. 

When the UK left the European Union in 2019, it ceased to be part of the European Financial Reporting Advisory Group, which manages the formal endorsement mechanism for applying International Financial Reporting Standards across the Continent. 

So, the UKEB was created to fill the need for a British endorsement mechanism, duplicating the work being carried out in Europe and similar approval processes in other international jurisdictions.

Technical navel-gazing

In the case of IFRS 17, for example, the UKEB devoted months of consultation, discussion with stakeholders and technical analysis to review the suitability of the international standard. It produced a 184-page report full of boilerplate explanations that could be summarised in one paragraph (3.181): “We conclude that IFRS 17 meets the criteria of understandability, relevance, reliability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management.”

Leavitt Walmsley partner and AccountingWEB contributor Steve Collings explained, “They are there for a reason and are doing an OK job. In the first two years, you wouldn’t expect much divergence. When Brexit happened, all the EU standards were frozen into UK company law, so the UKEB had to pick up and carry on from there.”

It’s probably better for everyone concerned that the UKEB pursues the rubber-stamp path rather than interfering radically with what has passed through the IFRS mechanisms. If all the other global endorsement boards got too active, we would end up with a mishmash of international standards that were all different from each other, somewhat undermining their intended purpose.

Replies (1)

Please login or register to join the discussion.

Jez Williams, Apex Professional Consulting
By Jez Williams
07th Sep 2022 11:24

While we’d all love more brevity in this sector, I think it would be worth tempering the cynicism by pointing out that IFRS 17 is not only complex and a significant change in approach, but as the world’s insurance centre, the the UK likely to be most affected by the new standard.

Endorsing IFRS 17 was the UKEB’s first real test and therefore they may have felt pressure to prove their mettle with a comprehensive response, leaving nothing unsaid.

Thanks (0)