Regulatory and Public Policy updates

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EY - Policy Pulse April 2017

Policy Pulse

The UK is currently experiencing a wide range of regulatory changes, and the way we do business is evolving fast. Policy Pulse provides you with the insight and questions that will help you navigate your way through these developments and capitalise on the opportunities they present.

The latest edition discusses:

  • Defining more effective measurement and reporting of a company’s value
    The time has come to rethink how we account and report on organisational performance: shifting from an implicit understanding of the value a company’s broader activities bring to stakeholders, to explicit external verifiable evidence of outcomes. Recent developments, such as integrated reporting and the strategic report, have made significant enhancements to the quality and usefulness of reporting. However, there is still a significant and increasing disconnect between the different stakeholder groups and their information requirements.
  • Challenges ahead for FRC
    In December 2016 the Financial Reporting Council (FRC) published its draft plan, budget and levy for 2017/18. It outlines a range of regulatory duties and proposed initiatives, with an indication of costs and an explanation of funding. In this edition of Policy Pulse we seek views from the FRC on some of the challenges that it will face in the coming months e.g., corporate reporting, audit quality and the actuarial profession.
  • Artificial intelligence: panacea or paradox?
    In describing the audit of the future we talk about how artificial intelligence (AI) will help us to analyse a company’s data sets (referred to as Audit Data Analytics (ADA)). AI helps us to analyse more information than ever before, including ‘unstructured data’ (e.g., documents and records such as company contracts), and if AI helps the profession to optimise ADA, then ADA’s merits are enhanced.
  • IFRS 16: leases make their way onto the balance sheet
    In January 2016 the International Accounting Standards Board (IASB) issued new requirements for accounting for leases under International Financial Reporting Standard 16 (IFRS 16). We consider the implications for companies and the steps they should take to minimise the challenge of adopting the new standard: including the use of document scanning technology and data algorithms to extract key contract information quickly and efficiently, in order to get a head start with impact calculations.
  • Behavioural modelling for higher quality auditing
    Expert modelling is the replication of high performance through a process of enquiry into and explication of the cognitive patterns of people who consistently produce outstanding results. The process of developing the EY Expert Model began by engaging a wide group of stakeholders in a workshop to assess a sample of audits that all achieved a high quality score. This enabled psychologists to draw out specific sets of outcomes that define a high quality audit for EY.
  • Getting to grips with the Green Paper on Corporate Governance Reform
    January 2017’s Policy Pulse included an article on executive remuneration with a brief reference to the UK Government’s Green Paper on Corporate Governance reform, published on 29 November 2016. Here we focus on the Green Paper and some of the potential implications for companies.
  • Cybersecurity wake-up call
    In recent years there has been a significant increase in cybersecurity breaches impacting personal data across organisations in all sectors, even those organisations and individuals who believed they were secure. These incidents have led to more regulatory interventions from the UK Government and supranational bodies. Two key initiatives are the development of a UK National Cybersecurity Strategy and EU General Data Protection Regulation (GDPR), which provide clear evidence of growing concerns over cybersecurity and data privacy in the regulatory community.
  • Recent regulatory developments worth watching – December to March 2017
    We look at 15 examples of regulatory developments which may have implications for reporting, auditing and/or governance. Examples range from the Financial Reporting Council’s review of corporate governance and stewardship in the UK, to HM Treasury’s Money Laundering Regulations.