Pitopito Kōrero

Latest news and information

July 2022


Major climate milestone ahead

It is now 18 months since the Government announced its intention to implement mandatory reporting on climate risks and we are now a month away from releasing the third and final consultation of the suite of Climate-related Disclosure Standards.

What’s coming
A suite of documents will be released, including a consultation document that provides contextual information about the proposals along with key questions and exposure drafts of the following New Zealand Climate Standards (NZ CS).

  • NZ CS 1 sets out the disclosure requirements relating to Governance, Risk Management, Strategy, Metrics and Targets and the assurance requirements  
  • NZ CS 2 covers the first-time adoption provisions
  • NZ CS 3 provides general requirements and principles for preparers.  

We will also be releasing draft staff guidance, one for all climate reporting entities and another specific to managers of registered managed investment schemes. Also included will be comparison tables showing key differences between the exposure drafts and the Task Force on Climate-related Financial Disclosure Recommendations, and the International Sustainability Standards Board’s draft climate standard (IFRS S2 Climate-related Disclosures).  
 
We appreciate there will be a lot to take in during the 2 month consultation period so an overview of the the key documents will be provided at a virtual launch event on 28 July. Register here to attend.

 

Disclosure of Fees Paid to Audit Firms

This week we launched our consultation on proposed requirements to enhance the disclosure of fees paid by a reporting entity to its audit or review firm. The extent to which an entity pays its audit firm for other services, in addition to the financial statement audit, is often seen as a key indicator of a possible threat to the auditor’s independence, making this disclosure of high interest to users of an entity’s financial statements. The proposed amendments introduce a new requirement for entities to disclose fees for audit services which will create greater consistency in what entities are reporting. The following categories are included in the proposed amendments:

A. Audit or review of the financial statements
B. Other non-audit or review services
             (i) Audit or review related services 
             (ii) Other assurance services 
             (iii) Taxation services 
             (iv) Other services 

We are particularly interested in hearing whether the proposed amendments will improve transparency in relation to auditor independence, and contribute to greater consistency in the disclosures. Consultation closes 30 September 2022.

 

Auditor independence strengthened 

We have now amended the non-assurance services and the fee-related provisions of Professional and Ethical Standard 1, particularly in relation to audits of public interest entities. The revisions include a prohibition on the provision of a non-assurance service that might create a self-review threat to an audit client that is a public interest entity.  
 
Our explanation for decisions made summarises the New Zealand changes. the changes were made following a period of extensive consultation which enabled us to clarify the high threshold that needs to be met before a firm may provide tax planning or advisory services to a public interest entity audit client.  

 

In brief   

Upcoming Events

  • Assuring Greenhouse Gas Emissions Disclosures: 29 June
  • Launch - Climate-related Disclosures Final Consultation: 28 July

Consultations


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