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July 14, 2008

Region round-up


• CPA Australia has suggested preparers of financial reports whose financial years end on 30 June 2008 could consider early adoption of the Australian accounting standards AASB 8 Operating Segments and AASB 2008-2 Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations Arising on Liquidation. The institute said proprietary companies and for-profit unlisted public companies, except for those entities with immediate plans to list on a stock exchange, that adopt AASB 8 early are permitted to discontinue with segment reporting because of the standard’s narrower scope of application. The institute also noted that co-operatives and partnerships may benefit from early-adoption of AASB 2008-2, a standard that amends AASB 132 Financial Instruments: Presentation.


Asia Pacific

• The Philippine Financial Reporting Standards Council has approved the adoption of amendments to IFRS by the International Accounting Standards Board. The amendments are to IAS 32 Financial Instruments: Presentation; IAS 1 Presentation of Financial Statements (revised 2007) – Puttable Financial Instruments and Obligations Arising on Liquidation; IFRS 2 Share-based Payment – Vesting Conditions and Cancellations; IFRS 3 Business Combinations; and IAS 27 Consolidated and Separate Financial Statements. They are intended to improve accounting for particular financial instruments that are classified as financial liabilities. The revisions are based on comments from previous exposure drafts and are expected to be effective from 1 July 2009.

• The Hong Kong Securities and Futures Commission (SFC) has re-appointed Angelina Lee as non-executive director for a two-year term beginning 1 August 2008.

SFC chairman Eddy Fong said: “I am delighted to be able to continue working with Mrs Lee, whose insights and advice have benefited the SFC a great deal over the past two years. I am certain the SFC and the Hong Kong financial market will continue to benefit from her wealth of experience and expertise.”

CPA Australia has helped establish a A$750,000 ($715,600) scholarship programme to address the skills shortage and raise the standard of the profession in Singapore. The scholarship is the result of a relationship between CPA Australia, 11 leading Singapore employers and three local universities who will fund more than 300 accounting students through a post-graduate course. The course will teach knowledge of global accounting standards and ethics. The Big Four are all participating in the programme.

• The Christchurch-based partners of KPMG New Zealand have resigned to join a competitor firm. Paul Kiesanowksi has been named as the new managing partner of the Christchurch office and is being supported by additional partners from other KPMG offices, the Big Four firm said. According to Christchurch daily newspaper The Press, the rival firm is Ernst & Young and the combination will bring Ernst & Young’s representation in New Zealand’s third-largest city to nine partners and 150 staff.

• The Australian Government has amended the Trade Practices Act to recognise new CPA Australia professional standards schemes in Victoria, South Australia, Western Australia, the Northern Territory, the Australian Capital Territory and Queensland, effective from 12 June 2008. The New South Wales scheme was prescribed in October 2007. This prescription has the effect of limiting the occupational liability of scheme members to an action for contravention of section 52 of the Trade Practices Act, in the same way as occupational liability is limited under the relevant state and territories laws of the applicable Professional Standards Act.

Africa, Middle East, South Asia

Africa, Middle East, South East Asia• The Institute of Cost and Management Accountants of Pakistan (ICMAP) has appointed a new executive director. Mushtaq Ahmed Madraswala, who was previously a consultant with National Bank of Pakistan, has 27 years of diverse experience in managing, reporting and system development for control functions of banking and finance. He has a long association with ICMAP and was chairman of the Karachi branch council for 15 years.

• The South African Institute of Chartered Accountants (SAICA) has recorded a rise in the pass rate of part one of its qualifying examination – 53 percent passed this year, up from 46 percent in 2007. The institute also reported an increase in the pass rate among black African first-time candidates from 54 percent in 2007 to 63 percent in 2008. There was an 80 percent pass rate among Thuthuka students. At present SAICA has 20,885 members based in South Africa who hold the chartered accountant designation of whom 973 are black African.

• Two new courses have been launched following an agreement between the Institute of Cost and Works Accountants of India and the Indira Gandhi National Open University. The courses will focus on financial and cost accounting, management accounting and financial strategies.

• The Arab Society of Certified Accountants (ASCA) has been accredited by the Accountants Licensing Committee at the Yemeni Ministry of Industry and Trade. The accreditation came as part of several revisions the ministry introduced to the law that regulates the accounting profession, according to a letter sent to ASCA by the Yemeni department. These revisions aim to make accounting more consistent with global developments, especially in light of negotiations for Yemen to join the World Trade Organization, the letter said.

• The Dubai Financial Services Authority (DFSA) has entered into three agreements with international regulators in Ireland, Belgium and Malta. The DFSA and each regulator have agreed to share and co-operate in the supervision of financial institutions and conduct of enforcement investigations within respective jurisdictions.

• The Institute of Chartered Accountants of India has issued an exposure draft of the Revised Standard on Auditing (SA) 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors).

SA 600 is based on the revised and redrafted International Standard on Auditing 600, which was issued by the International Auditing and Assurance Standards Board in October 2007.


Europe• The managing partner of Grant Thornton UK corporate advisory services has been elected as the chairman of the Institute of Chartered Accountants in England and Wales corporate finance faculty. Ian Smart takes over from Chris Ward as chair of the faculty, which has more than 6,400 members and includes more than 90 member firms.

• The European Financial Reporting Advisory Group has recommended the EU adopt the amendments to IFRS that the International Accounting Standards Board published in May 2008 as part of its annual improvements process.

The amendments comprise 34 individual changes that focus primarily on providing clarification and additional guidance on IFRS. They do not introduce fundamental changes to existing IFRS literature.

• Ben van der Veer, the chairman of KPMG Netherlands, is leaving the firm on 1 October. van der Veer has been with the Big Four firm for 32 years and has been chair since 1999. He will be succeeded by vice chairman Herman Dijkhuizen.

As chair of KPMG Netherlands, van der Veer has been a member of the board and management committee of KPMG International. For the past three years he was also chairman of the board of KPMG Europe, Middle East and Africa (EMEA). The network has not yet announced who will replace van der Veer as chair of KPMG EMA.

• The UK Financial Reporting Council expects to make progress on a review of the complexity and relevance of corporate reports during the next quarter. The regulator will also modify the investigation and disciplinary scheme for the profession.

In its quarterly strategic progress and planning report, the regulator also said it intends to distribute to audit firms reports on individual audits reviewed by the Audit Inspection Unit.

• The Institute of Certified Public Accountants in Ireland has reported positive membership growth and recently granted its 400th firm licence. The professional body said it grew by 9 percent in 2007, 3 percent higher then the national average among accountancy bodies in Ireland.

• Christopher Hogg’s position as chair of the UK Financial Reporting Council (FRC) has been extended by one year. His term is now due to end on 31 December 2009. UK Parliamentary Under Secretary of State for Trade and Consumer Affairs Gareth Thomas commented: “Sir Christopher has done much good work as chair of the FRC, in particular in putting in place new governance arrangements for the FRC. I have asked him to stay on for an additional year to ensure that the changes are fully bedded down.”

• Amadou Raimi has been re-elected as chairman of Deloitte France for another three years. The audit specialist has been chairman of the French firm since 2004.

Raimi has also been a member of Deloitte Global’s board since 2006 and its vice-chairman since last June. Deloitte was listed as France’s fifth largest firm in last year’s International Accounting Bulletin France survey. 

North America, Latin America   Americas• The American Institute of Certified Public Accountants, the Institute of Internal Auditors and the Association of Certified Fraud Examiners have teamed up to produce new guidelines for fighting fraud. Managing the Business Risk of Fraud: A Practical Guide outlines principles for establishing effective fraud risk management, regardless of the type or size of an organisation. The five key principles within the guidance address governance, risk assessment, fraud prevention and detection, investigation and corrective action. The guide can be downloaded for free from the three organisations’ websites.

• The US-based Institute of Internal Auditors (IIA) has appointed a new chair. Deloitte US partner Patricia Miller will act as a spokesperson for the IIA on all issues relating to internal auditing. She will also work to build mutually beneficial relationships between the IIA and other professional organisations, as well as be responsible for leading meetings.

• The accountancy profession is critical to the development of the Caribbean, according to Trinidad and Tobago Prime Minister Patrick Manning. He was speaking at the annual conference of the Institute of Chartered Accountants of the Caribbean (ICAC). Manning said the goal of development in the region is to improve the lives of people, and a key factor in realising this objective is through a high level of efficiency in the deployment of financial resources in public and private sectors. He said this was impossible to achieve without the guiding, monitoring, reporting and clarifying of roles that accountants play.

CMA Canada has published four new management accounting practices on managing and measuring organisational risk. These include organisation uncertainty and risk, the sources of organisation risk, managing organisation risk and measuring organisation risk. The publications can be downloaded from the CMA Canada website.

• The American Institute of Certified Public Accountants (AICPA) has received more than 360 minority accounting scholarship applications following a recent student leadership workshop. ‘Lead the Way, Make a Difference, Become a CPA’ emphasised the importance of obtaining the CPA credential and highlighted the flexibility and various career paths of the accounting profession. The leadership workshop is a component of the AICPA minority initiatives committee’s strategy to promote diversity in the profession.

• A recent survey of US audit committee members found only 28 percent were “very satisfied” they understood the process that management used to identify and assess significant business risks. Only 21 percent were “very satisfied” with the risk reports they received from management. The study also noted that 74 percent of audit committee members said the communication and co-ordination of risk oversight activities among the audit committee, board and other committees could be improved. The research was conducted by KPMG’s Audit Committee Institute and the National Association of Corporate Directors, which surveyed 281 of its audit committee members.

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