Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government why the UK Endorsement Board’s analysis for the endorsement of IFRS 17 made no assessment of whether the need to override the application of a standard would be "extremely rare".
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board’s Endorsement Criteria Assessment (ECA) for IFRS 17 sets out the results of the UK Endorsement Board’s assessment of the standard against the adoption criteria in SI 2019/685. The ECA states that this assessment has not identified any requirement of IFRS 17 that would prevent individual or consolidated accounts prepared using the standard from giving a true and fair view of the entity’s assets, liabilities, financial position and profit or loss. Following discussion of this matter by the UK Endorsement Board at its meeting on 9 May 2022, the final version of the ECA makes specific reference to the fact that the UK Endorsement Board is satisfied that the circumstances in which the application of IFRS 17 would result in accounts which did not give a true and fair view would be extremely rare.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government why the UK Endorsement Board has not commented on (1) the opinion from Mr Todd QC and Mr Rivett, and (2) the other six opinions it placed on its website for the purpose of endorsement of IFRS 17.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board has sought advice to clarify the legal position and the approach to be taken when assessing an international accounting standard against the criteria in Regulation 7(1)(a) of SI 2019/685 (the true and fair view criteria). In April 2022, it obtained an Opinion from Counsel on the interpretation of Regulation 7(1)(a). This Opinion was only one piece of a wide range of information that has been considered by the UK Endorsement Board as part of its responsibilities relating to the endorsement and adoption of international accounting standards.
The UK Endorsement Board website contains links to prior Counsel opinions, that were obtained by a number of different organisations, in order to provide contextual background for stakeholders.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government why the UK Endorsement Board took no account the two opinions of George Bompas QC in its analysis for the endorsement of IFRS 17 despite linking to those opinions on its website.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board has sought advice to clarify the legal position and the approach to be taken when assessing an international accounting standard against the criteria in Regulation 7(1)(a) of SI 2019/685 (the true and fair view criteria). In April 2022, it obtained an Opinion from Counsel on the interpretation of Regulation 7(1)(a). This Opinion was only one piece of a wide range of information that has been considered by the UK Endorsement Board as part of its responsibilities relating to the endorsement and adoption of international accounting standards.
The UK Endorsement Board website contains links to prior Counsel opinions, that were obtained by a number of different organisations, in order to provide contextual background for stakeholders.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government why the UK Endorsement Board’s analysis for the endorsement of IFRS 17 made no assessment of the statutory setting in which the endorsement criteria in the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019, SI 2019/685, sits, including sections 72, 712 and 836 of the Companies Act 2006.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board’s project on adoption of IFRS 17 and its final assessment directly address the adoption criteria and other requirements set out in SI 2019/685. The UK Endorsement Board’s Endorsement Criteria Assessment, available on the UKEB’s website, makes explicit reference to this legislative context.
The sections of the Companies Act 2006 referenced in the question are not specifically matters that the UK Endorsement Board is required to address under the terms of Regulation 7 of SI 2019/685.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government why the UK Endorsement Board’s analysis for the endorsement of IFRS 17 made no separate assessment of the requirement in the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019, SI 2019/685, regulation 7(1), which sets out the criteria for the endorsement of an accounting standard.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board undertook a significant project to assess IFRS 17 against the adoption criteria set out in Regulation 7(1) of SI 2019/685, that must be met before an international accounting standard may be adopted for use in the UK. Results of its assessment against those criteria are set out in its Endorsement Criteria Assessment, containing sections specifically addressing each of the Regulation 7(1) adoption criteria. The Endorsement Criteria Assessment can be found on the UKEB’s website.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether Pauline Wallace, Chair of the UK Endorsement Board, was involved in defending PwC against the Financial Reporting Council’s action in respect of PwC’s audit of Mayflower plc; and if so, whether she worked with Mike Ashley as part of that defence.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Pauline Wallace was at partner at PwC between 2002 and 2013. The judgement for the tribunal between the Accountancy Investigation and Discipline Board and PwC was provided in 2006 and is available on the FRC’s website. HM Government does not hold information on whether Pauline Wallace had any involvement in the tribunal.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether the UK Endorsement Board has undertaken an analysis of what constitutes 'reliability' in the context of audited accounts and its endorsement criteria; if not why not; and whether any analysis includes positions from case law of applying the requirements of the Companies Act 2006.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board has been delegated powers to consider new international accounting standards for UK adoption only; it has no remit over audit policy and audit standards.
This includes an assessment of the compatibility of new standards with the requirements of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685 (IAS Regulations). The IAS Regulations require that “the standard 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.” These requirements were on-shored from EU legislation on the UK’s exit from the EU and have long been understood in the context of adoption of international accounting standards.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether the UK Endorsement Board has undertaken an analysis of what constitutes 'reliability' in the context of audited accounts and its endorsement criteria; and whether any such assessment excludes positions that resemble those of the large accounting firms that were criticised in the Commons Business, Energy and Industrial Strategy Select Committee's report The Future of Audit, published on 2 April 2019.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The UK Endorsement Board has been delegated powers to consider new international accounting standards for UK adoption only; it has no remit over audit policy and audit standards.
This includes an assessment of the compatibility of new standards with the requirements of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685 (IAS Regulations). The IAS Regulations require that “the standard 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.” These requirements were on-shored from EU legislation on the UK’s exit from the EU and have long been understood in the context of adoption of international accounting standards.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government, further to the Written Answer by Lord Callanan on 19 April (HL7620), to set out how the UK Endorsement Board seeks to ensure that the statutory criteria for endorsement have been met.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
It has not proved possible to respond to this question in the time available before Prorogation. I will correspond directly with the noble Baroness.