BaFin audits Gerresheimer over revenue recognition

Transfer pricing is undergoing an identity shift, from compliance cost sink to strategic catalyst. Insights from our 2025 State of Transfer Pricing Report, and perspectives from Reuben Sagar and Maria Helander in the recent article on The CFO, show why the shift is happening now: 💡 Only 14% of firms use structured transfer pricing data, while 92% still lean heavily on external advisors. 💡Leading companies are moving from reactive audits to being “always audit ready.” 💡Technology and AI are enabling finance teams to focus less on admin and more on strategy. 💡 Rising global tax complexity is turning transfer pricing into a board-level discussion. The takeaway is clear: transfer pricing is no longer just about compliance. With the right platform and mindset, it becomes a catalyst for efficiency, transparency, and competitive advantage. 👉 Read the full article here: https://lnkd.in/ejJxRCCU #CFO #transferpricing #taxtech #Aibidia #financeleadership

Great insights by Maria Helander and Reuben Sagar on why transfer pricing is no longer just a back-office compliance task - it’s now a strategic priority on the CFO agenda.

Understanding Related Party Transactions (RPTs): Risks, Tests & Disclosures In financial reporting, few areas raise as much scrutiny as Related Party Transactions (RPTs). What are Related Party Transactions? A related party transaction occurs when a company enters into arrangements with entities or individuals that have close connections — such as subsidiaries, associates, key management, or shareholders with significant influence. Standards to Note IAS 24 – Related Party Disclosures defines and governs disclosure of related parties. IAS 27/IFRS 10 address control and consolidation when group relationships exist. IFRS 11 applies when joint arrangements are involved. How to Identify Related Parties in line with the standard: Common ownership or parent-subsidiary relationships Key management personnel and their close family members Transactions with entities under significant influence (e.g., associates, joint ventures) Examples of RPTs: Intercompany sales or transfers of goods Loans or guarantees between group entities Management fees or royalty arrangements Asset transfers or shared services 🚩 Risks of Related Party Transactions: Non-arm’s length pricing → manipulation of profits or costs Hidden liabilities or off-book arrangements Incomplete disclosure → misleading financial statements Test of RPTs: Obtain related party list from management and governance. Review board minutes, shareholder registers, and contracts to detect undisclosed parties. Perform journal entry reviews for unusual transactions. Match intercompany balances across group entities for consistency. Test pricing against market/arm’s length benchmarks. Disclosure Requirements (IAS 24): Nature of the relationship Types of transactions Amounts involved (transactions, balances, commitments) Outstanding balances (terms, guarantees, provisions for doubtful debts) Example: Imagine a consumer goods company selling raw materials to its distribution subsidiary at a discounted rate. ✔️ Accounting Treatment: Revenue should be recognized in line with IFRS 15, but pricing and terms must reflect that it’s not an arm’s length transaction. ✔️ Disclosure: Under IAS 24, the company must disclose the relationship, the nature of the transaction, the amounts, outstanding balances, and pricing policy. Key Takeaway: Related party transactions are not inherently wrong — but transparency, fair presentation, and robust audit procedures are critical to maintaining trust. 👉 How does your organization ensure RPTs are properly captured and disclosed?

NFRA GUIDELINES ON AUDIT OF NON-FINANCIAL IMPAIRMENT The National Financial Reporting Authority (NFRA) has issued its fourth series of guidance on Auditor-Audit Committee Interactions, focusing on the audit of accounting estimates and judgments, specifically concerning the impairment of non-financial assets under Ind AS 36 and SA 540. Driven by the need to improve audit quality and reinforce communication, the document addresses key requirements of the Companies Act, 2013 and SEBI LODR, which mandate the Board and Audit Committee to review accounting estimates. The guidance details the technical requirements for impairment testing, defining concepts like recoverable amount (the higher of fair value less costs of disposal and value in use) and Cash Generating Units (CGUs). It outlines numerous external and internal impairment indicators and specifies the complex steps involved in estimating future cash flows and appropriate discount rates, particularly for assets like goodwill and intangible assets with indefinite useful lives. The document concludes by providing a comprehensive list of potential questions the Audit Committee should pose to the statutory auditors, covering areas such as the evaluation of internal controls, management’s impairment process, reliance on expert opinions, calculation of terminal values and the transparency of disclosures.

Myth: “Technical accounting is just about digging through standards — it adds no strategic value.” Too many organizations still treat technical accounting as a purely compliance cost center — something relegated to journals, footnotes, and auditor back‑and‑forth. But that’s a flawed view. Reality check: -Technical accounting informs strategic decisions. Whether you’re evaluating an M&A, restructuring, lease vs buy, or software capitalization, judgmental accounting estimates influence transaction structure, timing, and disclosures. -It’s a radar for risk. Early technical accounting review can flag earnings volatility, restatement risk, or internal control gaps before they surprise stakeholders or trigger regulatory scrutiny. -It shapes narrative — not just numbers. In today’s environment, investors and regulators expect transparency on assumptions, sensitivities, and transitions. Technical accounting teams are uniquely positioned to bridge numbers and narrative. -Efficiency by design. If you embed technical accounting thinking early into your processes (not just at period close), you reduce “fire drills,” rework, and audit friction. Pro tip you can act on now: Choose one “strategic project” in your organization — say a new product launch, a major contract renegotiation, or integration planning — and mandate that a technical accounting reviewer is part of the planning team from day one (not afterward). Track how many accounting assumptions or structural changes shift because of early identification. When you do that, technical accounting stops being “compliance.” It becomes a strategic enabler and risk mitigator. Visit us at https://lnkd.in/gP3tiQgs

I’ve seen firsthand how early technical accounting involvement in projects or transactions transforms decision-making. It’s not just compliance—it’s a strategic advantage when done right.

The IRS just furloughed 35,000 employees. As a CA, my first thought was: "How does this affect examination risk?" Then I read the Bloomberg report. "Audit functions, examinations of returns, and non-automated collections were to stop." That one line changed everything. Here's what's happening: The IRS doesn't stop receiving returns. They stop examining them properly. Which means: → Automated flags still trigger → Human review capacity drops to 53% → Examination backlogs compound daily → When staff returns, they'll prioritize obvious issues This creates a documentation advantage. Why quality matters more right now: In normal operations, you can file with "good enough" documentation. If the IRS has questions, you get a soft notice. You clarify. You move on. But when the IRS is backlogged? There's no bandwidth for clarification calls. Your documentation needs to answer questions before they're asked. Consider these scenarios: R&D Tax Credit: Normal times: IRS inquiry letter, you provide additional backup Backlog times: Thin documentation = immediate examination escalation Cost Segregation Study: Normal times: Reviewer calls to discuss methodology Backlog times: No call. Just full examination if engineering report isn't comprehensive International Returns (5471/8865): Normal times: Minor errors get correction notices Backlog times: Errors compound across review layers The pattern? Documentation that would've survived with clarification now needs to be audit-proof from day one. What I'm advising: Don't rush complex returns to meet arbitrary deadlines. Use this enforcement capacity gap strategically: ✓ Review supporting schedules - Can an examiner understand without calling? ✓ Strengthen technical memos - Does your election clearly cite authority? ✓ Organize backup documentation - Are substantiation requirements obvious? ✓ Cross-check consistency - Do your K-1s reconcile with entity returns? This isn't about being cautious. It's about being professional.

1. The Educational Post (Focus on Proactive Preparation) This post is designed to provide quick, high-value advice to business owners and finance professionals on year-round preparation. Post Content: Subject: Don't Scramble! 3 Must-Do’s for Year-Round Tax Audit Readiness 🛡️ A tax audit doesn't have to be a stressful scramble. The secret? Proactive, consistent documentation. Stop thinking of it as a year-end chore and start building your audit defense daily. Here are the 3 non-negotiables we advise all our clients on: The 3-Way Reconciliation: Match your Books of Account \longleftrightarrow Bank Statements \longleftrightarrow Statutory Returns (GST/TDS). Discrepancies here are audit red flags. Regular reconciliation turns a 3-week audit into a seamless review. Voucher Vetting is Vital: Every expense must have a corresponding, legible original bill/receipt. For cash transactions, ensure your internal payment vouchers are signed and authorized. No receipt = No deduction. It's that simple. The Digital Archive: Invest in a secure, systematic digital storage system. Having all your sales invoices, purchase bills, and fixed asset records instantly searchable and indexed is a game-changer. Digital organization saves time, space, and stress. Question for the Finance Community: What is the single biggest documentation hurdle your team faces every year? Share your challenge below! #TaxAudit #Compliance #FinanceTips #Bookkeeping #TaxCompliance #AuditReady

7 October 2025 Auditor Independence Under Fire: ASIC’s Report 817 and Why Independence Still Matters ASIC’s Report 817 Building Trust has laid bare a serious issue in Australia’s audit profession — nearly one-third of auditors reviewed were found likely to have breached independence rules under the Corporations Act and APES 110. From failure to rotate audit partners, to acting as both auditor and company secretary, to providing tax and financial reporting calculations for audit clients, the breaches reveal a worrying pattern: too many auditors are still taking a “tick-the-box” approach to independence. As ASIC Commissioner Kate O’Rourke put it, independence underpins “trust and confidence in the financial information being audited.” When that independence is blurred, so too is the credibility of the financial report itself. For company directors and CFOs, the message is clear — don’t ask your auditor to help prepare your accounts or perform technical accounting calculations. Under APES 110, doing so creates a self-review threat that can invalidate audit independence. Instead, when complex accounting questions arise during audit or reporting season, engage an independent accounting advisor — one who’s outside the audit relationship. That’s exactly what we do at financialreporting.com.au We provide objective, audit-independent technical accounting advice to help management resolve complex AASB issues ethically and transparently. Independence isn’t bureaucracy. It’s the foundation of trust. Let’s protect it. https://lnkd.in/g6KD-P5y Contact: Rob Mackay rob@financialreporting.com.au +61 412 824 087

It’s fascinating timing. Just weeks after the Chartered Accountants Worldwide / Edelman DxI Global Trust Report declared that Chartered Accountants are now the world’s third most trusted profession (83%), overtaking scientists and closing the gap on doctors and engineers, ASIC Report 817 exposes widespread independence breaches among Australian auditors. On one hand, the profession’s reputation for integrity, confidentiality, and ethical conduct has never been stronger globally. On the other, ASIC’s findings reveal that trust can’t be assumed — it must be continually earned. These two narratives collide at the core of professional ethics: independence is not procedural, it’s perceptual. When an auditor advises on accounting treatments or prepares calculations for their audit client, they cross the invisible line from assurance to advocacy — and in doing so, risk eroding the very trust the profession depends on. That’s why financialreporting.com.au exists: to provide independent accounting and financial reporting advisory support for companies and auditors who want technical expertise without compromising independence. Trust isn’t built in boardrooms or surveys — it’s built in the discipline to say, “that’s not our role.”