Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government how many former employees of KPMG sit on the UK Endorsement Board.
Answered by Earl of Minto - Minister of State (Ministry of Defence)
Three Members of the UK Endorsement Board are former employees of KPMG.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government whether they have assessed, or will assess, the risk to UK public interest of the setting of international accounting standards being influenced by (1) rogue states, in particular where financial crime and human rights abuses occur, (2) accounting firms with global networks which co-operate with rogue states, (3) accounting firms with global networks which engage in corrupt practices overseas, (4) accounting firms which engage in corrupt practices in the UK, and (5) accounting firms' former employees who have been prosecuted for tax evasion.
Answered by Earl of Minto - Minister of State (Ministry of Defence)
The UK Government is confident that appropriate safeguards are in place to prevent undue influence on international accounting standards development from rogue states or actors engaging in corrupt practices. The International Financial Reporting Standards Foundation maintains rigorous due process in standard-setting, including public consultation on standards, public non-technical Board meetings, and a due diligence oversight committee to monitor adherence to its Due Process Handbook. UK endorsement of international standards through the UK Endorsement Board is also subject to rigorous safeguards, including in-depth background checks before Board members are appointed and an annual report on its technical work for the Secretary of State.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, further to the Written Answer by the Earl of Minto on 25 May (HL7684), what work the UK Endorsement Board has undertaken to consider the effect of the Economic Crime and Corporate Transparency Bill on its work to assess international accounting standards; and what steps they have taken to ensure compliance with the public interest test provided under regulation 7(1) of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019.
Answered by Earl of Minto - Minister of State (Ministry of Defence)
The Economic Crime and Corporate Transparency Bill has no effect on the content of companies’ accounts or the accounting standards they use for that purpose.
The UK Endorsement Board endorses and adopts individual international accounting standards for use in the UK. It carries out that work in accordance with criteria set out in the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019.
Whether a standard is likely to be conducive to the long-term public good is assessed at individual standard level with reference to the matters set out in regulation 7(2) of that Statutory Instrument.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government why the position of Chief Executive Officer of the Financial Reporting Council is not currently advertised on the public appointments website, given that the current CEO resigned in February 2023.
Answered by Earl of Minto - Minister of State (Ministry of Defence)
The campaign to find a new Chief Executive Officer for the Financial Reporting Council is now live. The job advertisement can be accessed on the public appointments website at https://apply-for-public-appointment.service.gov.uk/roles/7439.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government why the website of the UK Endorsement Board for accounting standards shows it has been supporting reduced disclosures applicable to Companies House-filed accounts, given that the Economic Crime and Corporate Transparency Bill is amending the Companies Act accounting exemptions so as to increase the disclosure of financial information to help deal with financial crime.
Answered by Earl of Minto - Minister of State (Ministry of Defence)
The Economic Crime and Corporate Transparency Bill removes exemptions from filing accounts for small and micro entities rather than amend the content of those accounts, as determined by international accounting standards or UK accounting standards.
The UK Endorsement Board’s publication commented on the proposals for a new international accounting standard set out in the Exposure Draft Subsidiaries without Public Accountability. These proposals would permit eligible subsidiaries to apply international accounting standards with some reduced disclosure requirements.
The proposed international accounting standard should reduce costs and complexity for eligible subsidiaries but continues to require more disclosures than the equivalent UK accounting standard.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, with regard to investment in the UK stock market by pension funds, what assessment they have made of whether the use of Financial Reporting Standard 17 and International Accounting Standard 19 complies with regulation 7(1) of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/685), which requires that use of a standard be conducive to the long-term public good of the UK, and the Endorsement Board assessment that this requirement should include the consideration of any adverse affect on the UK economy.
Answered by Lord Johnson of Lainston - Minister of State (Department for Business and Trade)
Financial Reporting Standard 17 Retirement Benefits was superseded by Financial Reporting Standard 102 from 1 January 2015 onwards. As Financial Reporting Standard 102 is a UK standard, and not an international accounting standard, it is not subject to the assessment criteria set out in SI 2019/685.
In 2003, the EU formally adopted International Accounting Standard 19. The standard, and subsequent amendments were assessed against similar criteria to those in SI 2019/685, now used by the UK Endorsement Board.
No retrospective assessment of International Accounting Standard 19 was required, or was conducted, for the UK’s onshoring of EU adopted international accounting standards following the UK’s exit from the EU.