Rapid changes in stakeholder expectations, technology and economic landscapes are creating new and enhanced risks in the financial reporting structure that are expected to affect the roles and responsibilities of management, audit committees and auditors beyond the 2019 year-end financial reporting season. Therefore, companies need to be agile and should continue to look ahead and prepare for the difficult issues on the horizon. The recent American Institute of Certified Public Accountants (AICPA) conference on current Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) developments highlighted the emerging issues to be considered by companies in the US GAAP. In this edition of Accounting and Auditing Update (AAU), we cast our lens on some of the key emerging issues discussed at the conference.
In India, the automotive industry is experiencing a slowdown and this phase is likely to pose many financial reporting implications for the companies operating in the sector. In our article, we unravel some of the key financial reporting areas where there could be an impact due to slowdown in the automotive industry.
To strengthen regulatory norms in relation to Related Party Transactions (RPTs) undertaken by listed companies in India, the Securities and Exchange Board of India (SEBI) constituted a working group in November 2019 under the Chairmanship of Mr. Ramesh Srinivasan. The working group submitted its report to SEBI with proposed changes to the current provisions of RPTs such as revised definition of related party, mandatory prior approval of audit committee for all RPTs and revised materiality thresholds for prior approval of RPTs. Our article on the topic provides a summary of the key recommendations made by the working group in its report.
As is the case each month, we have also included a regular round-up of some recent regulatory updates in India and internationally.