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September 14, 2008

News briefs

Court upholds watchdog’s constitutionality… Japan releases liability research…CIMA reaches 75,000 members…IASB works towards consolidated consolidation standard…Banks increase fair value disclosures…

LEGAL Court upholds watchdog’s constitutionality

The Court of Appeals for the District of Columbia Circuit has ruled that the manner in which US Public Company Accounting Oversight Board (PCAOB) board members are appointed and overseen under the Sarbanes-Oxley Act is constitutional. This had been challenged in the matter of Free Enterprise Fund v. Public Company Accounting Oversight Board. Commenting on the decision, US Securities and Exchange Commission chair Christopher Cox said the creation of the PCAOB was a central feature of the Sarbanes-Oxley Act and that its continued existence is “vital to protecting investors and furthering the public interest in the preparation of accurate and informative audit reports”.

EVENTS NZ institute celebrates 100 years

The New Zealand Institute of Chartered Accountants is celebrating 100 years. Formerly known as the New Zealand Society of Accountants, the organisation was officially established on 15 September 1908. New Zealand Minister of Commerce Lianne Dalziel acknowledged the contribution the institute has made over the past 100 years, and said: “It is encouraging to see that almost 100 years after accountancy was introduced as part of the Bachelor of Commerce degree in 1911, the institute still believes in the importance of educating the next generation.”

AUDITOR AVAILABILITY Japan releases liability research

The Japanese Institute of Certified Public Accountants has published an overview of the nation’s new limited liability audit corporation system. Japan’s Certified Public Accounting Law was changed in June 2007 to allow firms to choose between operating as a limited liability partnership or non-limited liability partnership. Previously, all accounting firms were required to be organised as non-limited partnerships.

STANDARDS Public sector standard amended

The International Public Sector Accounting Standards Board (IPSAS) has proposed amendments to IPSAS 5 Borrowing Costs in an exposure draft. The amendments aim to reflect the capitalisation of borrowing costs as part of the cost of an asset. Comments should be submitted to the IPSAS by 7 January 2009.

EDUCATION CIMA reaches 75,000 members

Michelle Forrest has become the UK-based Chartered Institute of Management Accountants’ 75,000th member. Forrest is a management accountant for UK Premier League club Bolton Wanderers. She has worked in the club’s finance department for 18 months and is responsible for the production of the management accounts, covering budget preparation, asset management, year-end activities and cash flow management. This includes the financial side of player transfers.

STRATEGY IASB and FASB update MoU

The International Accounting Standards Board and the US Financial Accounting Standards Board have updated their 2006 Memorandum of Understanding (MoU), restating their aim to complete their major joint projects by 2011. The update is so that countries due to complete convergence to IFRS that year, including Canada, India, Japan and Korea, will not be adversely affected. The boards said they have completed, or made significant progress on, seven of the 11 areas identified by the MoU.

STANDARDS IASB works towards consolidated consolidation standard

The International Accounting Standards Board (IASB) is holding a series of roundtable meetings as part of its project to publish a single IFRS on consolidation, replacing IAS 27 Consolidated and Separate Financial Statements and the interpretation SIC-12 Consolidation – Special Purpose Entities. The objective of the roundtable meetings is to progress the project by obtaining public comment at an early stage. The views received in the roundtable discussions are expected to help the IASB shape forthcoming proposals for the new standard.

RESEARCH Banks increase fair value disclosures

Global banks have demonstrated an increase in fair value disclosures and in the range and depth of structured financial disclosures since the onset of the credit crunch, according to a report from PricewaterhouseCoopers Global. Based on the 2007 annual reports of 22 global banks, the report reviewed bank disclosure requirements for the three areas most affected by market events: fair value, structured finance and risk management. It also benchmarked current findings against the corresponding 2006 report.

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