Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
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Understanding and Implementing AASB 124 - Related Party Transactions

This covers the board and management of CPA Australia
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Understanding and Implementing AASB 124 - Related Party Transactions

Post by JWheldon » Sun Oct 08, 2017 11:15 pm

Here is a NSW Office of Local Govt, video on youtube for members to Understanding and Implementing AASB 124 - Related Party Transactions.

It was published 18 October 2016.

You could also use these videos for your CPA CPD requirements. There are lots of videos, which are very useful for your CPD diary.

Hope this information is hopefully for members, and increases the discussion.

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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by The Nude CPA » Wed Oct 11, 2017 12:26 pm

CPA Australia would try to charge $54 for something like this...

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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by nakedadmin » Wed Oct 11, 2017 5:48 pm

The Nude CPA wrote:
Wed Oct 11, 2017 12:26 pm
CPA Australia would try to charge $54 for something like this...
The Naked Webmaster

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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by JWheldon » Wed Nov 08, 2017 3:29 pm ... ework.aspx

Attached for members reading AASB Research Report No55 - Financial Reporting Requirements Applicable to Charities. Interesting reading.
Extract from page 15 of attached
"Interaction between regulations and the AASB’s reporting entity concept
30. In accordance with paragraph 40 of the AASB’s Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity, “Reporting entities are all entities (including economic entities) in respect of which it is reasonable to expect the existence of users dependent on general purpose financial reports for information which will be useful to them for making and evaluating decisions about the allocation of scarce resources”.
31. Paragraphs 19-22 of SAC 1 provide guidance for identifying the likely existence of dependent users, including consideration of:
a) separation of management from economic interest
b) economic or political importance or influence
c) financial characteristics, such as the size of revenue, assets, employees, indebtedness, scarce resources and other financial characteristics.
32. The high degree of subjectivity involved when identifying dependent users means the reporting entity concept has been applied in a way that results in some entities that should prepare GPFSs being treated as non-reporting entities and preparing only SPFSs, and vice-versa. This is supported by empirical research described in AASB Essay 2014-1 The Critical Role of the Reporting Entity Concept in Australian Financial Reporting; as well as AASB Research Report No 1 Application of the Reporting Entity Concept and Lodgement of Special Purpose Financial Statements (2014). Furthermore, more recent research has found that: “… more than 87% of the variation in charities’ financial reporting choice [between GPFSs and SPFSs] cannot be explained by the model containing the three indicative factors from SAC 1 [see paragraph 31 of this Report above]. Generally, the results show that the charities do not consistently apply the guiding rules in SAC when deciding on whether to prepare GPFR or SPFR.”18
33. It is evident that many regulators have seemingly made extensive use of the reporting entity concept by directly referencing ‘the preparation of financial statements and notes to the financial statements in accordance with AASB accounting standards’ in their requirements. For example, this is the case for all:
a) medium and large charities registered with ACNC (see Table A1.1 in Appendix A1)
b) large co-operative charities registered with NSW Fair Trading (see Table A2.2 in Appendix A2).
34. Ideally, application of the reporting entity concept contained in AASB accounting standards would result in consistent financial reporting of charities within Australia (ie a level playing field). As will be discussed in the forthcoming AASB Consultation Paper referred to in paragraph 4 above, arguably in the future regulators should only be requiring charities to publicly lodge financial statements that are GPFSs (which could suggest that the current two Tiers of GPFSs currently contemplated in AASB 1053 [full GPFSs and RDR GPFSs] need to be expanded). Preparation of SPFSs implies there are no users who need the information that cannot command it for themselves, and therefore begs the question of why such financial statements are required to be publicly lodged. "

"Interaction between regulations and professional obligations of accountants
42. A final layer of complexity in the interaction between legislation/regulations applicable to charities and AASB accounting standards is the role the accounting profession plays. In the absence of legislation/regulations specifying financial reporting requirements for charities, and indeed potentially despite any relief that legislation/regulations might intend to provide to charities (including, potentially, those charities that regulators deem to be too insignificant to impose annual financial reporting requirements on), AASB accounting standards might still be applicable to a greater or lesser extent through professional requirements.
43. Accounting Professional and Ethical Standard APES 205 Conformity with Accounting Standards issued by the Accounting Professional and Ethical Standards Board sets professional and ethical obligations with respect to fundamental responsibilities for members20 involved with the preparation, presentation, audit, review or compilation of GPFSs or SPFSs21 of entities in the private and public sectors. Specifically, it provides mandatory
(20 Per APES 205, Section 2: a member “means a member of a Professional Body that has adopted this Standard as applicable to their membership, as defined by that Professional Body”. In Australia, Chartered Accountants Australia and NZ, CPA Australia and the Institute of Public Accountants have adopted this Standard as mandatory for their memberships.
21 Per APES 205, Section 2: “Financial Statements means a structured representation of historical financial information, including related notes, intended to communicate an entity’s economic resources or obligations at a point in time or the changes therein for a period of time in accordance with a financial reporting framework. The related notes ordinarily comprise a summary of significant accounting policies and other explanatory information. … The requirements of the financial reporting framework determine the form and content of the Financial Statements and what constitutes a complete set of Financial Statements.”)

requirements (in bold-type below) and guidance (in normal type) instructing members to take all reasonable steps22 to:
a) “… apply the principles and guidance provided in the Statements of Accounting Concepts and the Framework for the preparation and presentation of Financial Statements issued by the AASB when assessing whether an entity is a Reporting Entity” (paragraph 4.1 of APES 205)
b) “… apply Australian Accounting Standards when they prepare and/or present General Purpose Financial Statements that purport to comply with the Australian Financial Reporting Framework”23 (paragraph 5.1 of APES 205)
c) “… ensure that the Special Purpose Financial Statements, and any associated audit report, review report or compilation report clearly identifies:
i.) that the Financial Statements are Special Purpose Financial Statements
ii.) the purpose for which the Special Purpose Financial Statements have been prepared
iii.) the significant accounting policies adopted in the preparation and presentation of the Special Purpose Financial Statements”2

"AASB Outreach: Australian Reporting Framework – Charities

As part of our Australian Financial Reporting Framework project, on the AASB recently released a research paper on the current financial reporting requirements for charities.

In November the AASB is hosting outreach sessions designed to inform charities and stakeholders and to assist them in preparing for the upcoming Australian Charities and Not-for-profits Commission legislative review commencing 3 Dec 2017.

This is a great opportunity to have your say and to drive a positive change for financial reporting within the sector.

The soon-to-be-released AASB Discussion Paper Possible Options for Improving the Financial Reporting Framework applicable to Charities Registered with the ACNC will be used to generate conversation and discussion around the type and nature of improvements required.

The sessions will facilitate open and interactive discussion addressing the following topics:

What is a good framework?
What are the key reporting issues currently affecting your charity or client?
How can we address these issues?
Possible options of financial reporting framework "

Event details - go to the link ... ework.aspx

Tuesday 14 November, Brisbane – register
Thursday 16 November, Sydney – register
Monday 20 November, Adelaide – register
Tuesday 21 November, Melbourne – register
AASB_RR_05_10-17 - Financial Reporting Requirements applicable to charities.pdf
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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by Brett Stevenson » Thu Nov 09, 2017 5:05 pm

Great find (again) JWheldon. I think somewhere in your family history there must have been a librarian!!
I have just registered for the Sydney one.
I wrote a bit of a critique recently of the draft report on LinkedIn suggesting that they may have missed the elephant in the room with their research paper.
That being that financial reports of charities need to make sure they present a 'true and fair ' view of the organisation. Not in the sense of the audit report (which we know to be almost a box-ticking exercise that is increasingly losing its meaning) but in the sense that the report needs to give a very open and transparent view of the charity.
The report (and the project under which it was undertaken by the AASB) seems to be missing this obvious point (I thought).
I have included the article here but it is worth noting that Steven Taylor is the only one of the AASB board members who was prepared to come out and speak very forthrightly about the CPA fiasco.
Hats off to him for that, and I reckon that alone provides the AASB with greater credibility.
I appreciate CPA is not a charity but the issue of financial reporting is the common thread.
LinkedIn article AASB.pdf
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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by JWheldon » Thu Nov 09, 2017 10:09 pm

It is interesting that both the audit board and the accounting board, and ASIC understand the problem with the accounting compliance and audit compliance for years.

There has been continuous problems, not only with the general purpose financial reporting, but also the performance of the audit and what is "True and Fair". Auditor's argue about cost of undertaking the audit and ability to be competitive, as highlighted in the AFR articles recently. The industry seems more concerned with limiting its liability to a point, that the confidence in the auditor by the individuals, they are supposed to be assisting has disappeared. The question then becomes what is the point of the auditor? If the audit industry was a defective car, and that car continued to have accidents, and caused serious injury to the individuals driving that vehicle and the general public, then lawyers and government would take action. Yet the boards in control of the industry, have been slow to undertake change, and the government does not really appear interested. Do we have to wait for another RSL, HSU, etc to occur, but this time, millions of dollars are shifted overseas to tax havens and lost? How can anyone have confidence in the CPA Australia audit, when issues about the auditors performance on issues like remunerations go unanswered, or the financial reports do not appear to be"True and Fair", or the general purpose reporting is going down the line of providing reduced disclosure. Even Greg Medcraft raised serious concerns, which appear to have gone unanswered by the relevant boards, except for the Big Four accounting firms, who do the majority of the work, and argue about technology and cost.

CPA Australia, the so called Not For Profit organisation, continued to publish to the membership, that it was the leader in doing the right thing in the accounting field, both morally and ethically, but appeared to only do the minimum to comply and the minimum to disclose. Lets not forget that CPA Australia has on it website, that the board has to undertake its duties to a very high standard? What standard? It produced ethical standards for those in public practice and for the general membership, and even forced members to undertake quality assurance reviews, but those in control of CPA Australia, seemed to be doing the opposite. The so called judge of the industry, had no oversight nor accountability, nor direction, except to provide wealth creation for a small selective few at the expense of the general membership. The check and balances which are supposed to be in the accounting system have gone in the wrong direction.

CPA Australia needs its own quality assurance review every few years, because the members have no confidence in the auditor and have no assurance, nor ability to seek answers, when individuals like Jeff Hughes, Adam Awty, Graeme Wade, and Alex Malley have shut down discussion and review, because they had their own vested interests and reasons not to discuss or nor to disclose.

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Re: Understanding and Implementing AASB 124 - Related Party Transactions

Post by Brett Stevenson » Sat Nov 11, 2017 9:35 am

I think JWheldon you have provided a profound insight into the 'tragedy' of what has happened at CPA - one could call it hypocrisy.
Here we are as a supposed standard setter yet at the leadership level we have shown complete disregard for the standards we are meant to uphold.
Whenever I hear of the commendations to Jim Dickson for being so co-operative with the IRP or with the new board, or of Alex Malley on radio saying this was all the fault of a small number of members (even unemployed ones at tat from a recent comment made), or of the unwillingness of the IRP and presumably the new board to take any action against those who were responsible, I just think these people have missed the critical issue in this whole matter.
They seem more concerned with covering up and trying to avoid any had decisions, but in so doing they are just compounding the very problem CPA has.
In effect we have been shown (to the whole wide world) to have failed miserably in living up to the standards we purport to uphold, and rather than come out and deal with the issues strongly, we are just trying to sneak away and reestablish the organisation on pretty weak foundations.
They have to be kidding. It is just cementing the impression people have of CPA which at the moment is non too flattering despite all the hype and sales talk. We need the new board to come out and make some really strong and tough decisions to show things have really changed. That will give not only the watching world a clear message but will also bring out the strengths in the membership.
Just pandering to this 'lets limit the damage and try to go softly softly' just confirms to everyone exactly what we do not need - a CPA Australia which is weak.

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