ASIA-PACIFIC
• The Hong Kong Institute of Certified Public
Accountants (HKICPA) will continue to liaise with Hong
Kong’s Financial Reporting Council (FRC) and Ernst
& Young (E&Y) during investigations into the Big Four
firm’s auditing of Akai Holdings.
Last month, Hong Kong police searched
E&Y’s local offices and seized original working papers in
connection with the suspected forgery of Akai’s audit
documents.
The Big Four firm was in court last month
facing allegations it was negligent in its audits of Akai from 1997
to 1999.
E&Y settled with the liquidator of the
Chinese consumer electronics company for an undisclosed amount and
suspended one of its partners after finding some of the documents
in the audits of Akai could “no longer be relied on”.
The HKICPA said once sufficient evidence
emerged from the FRC and police investigations to show that
institute members may have been involved in the falsification of
documents, it would initiate its disciplinary process.
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By GlobalData• The Korean Institute of Certified
Public Accountants will train accounting staff at central
government agencies and public organisations as part of an
agreement with the Ministry of Strategy and Finance.
The agreement was signed after Korea adopted
accrual accounting and double-entry bookkeeping for governmental
accounting on 1 January 2009.
The institute said more than 1,000 people have
signed up for the training but due to budget constraints, only 740
will be able to participate.
They include accounting personnel from 48
major government agencies.
• New Zealand has become one of the first
countries to apply the full set of clarified International
Standards on Auditing (ISAs), according to the local professional
accountancy body. For audits of financial statements covering
periods beginning on or after 1 October 2009, auditors complying
with New Zealand auditing standards will also be able to assert
compliance with ISAs.
New Zealand Institute of Chartered
Accountants general manager for standards and advocacy
Bruce Bennett said this change will complete a process of
strengthening auditing and financial reporting in New Zealand that
began in 2005.
“Over the past four years, we have been progressively adopting
the international standards and educating our members on these new
standards,” he said.
NORTH AMERICA, LATIN AMERICA
• American Institute of Certified Public
Accountants (AICPA) president and chief executive Barry
Melancon has told the US President’s Economic Recovery Advisory
Board that a comprehensive tax reform is needed.
“The dynamic American economy is rebounding
slowly and, we believe, is burdened by an unnecessarily cumbersome
and somewhat outdated income tax system,” Melancon said.
“In particular, we see significant problems
for small businesses arising from the increasing complexity of the
tax law.”
The AICPA said the US Congress is likely to
take up tax reform as a major legislative challenge beginning in
January.
• The US Federal Accounting Standards
Advisory Board (FASAB) has issued a new standard for
estimating the historical cost of general property, plant and
equipment.
Statement of Federal Financial Accounting
Standards (SFFAS) 35 amends SFFAS 6 and 23 and clarifies that
reasonable estimates of original transaction data historical cost
may be used to value general property, plant and equipment.
The FASAB is responsible for setting
accounting standards for the US Federal Government.
• The national average salary for US finance
and accounting positions is expected to decline less than 1 percent
next year, according to a survey from recruiters Ajilon.
Chief financial officers and treasurers are
among the positions that will witness a sharp wage decrease, with
the national average salary expected to drop almost 8 percent next
year, compared with 2009.
The survey was compiled by combining national
salary data from hundreds of Ajilon’s staff recruiting for finance
and accounting positions at companies in 75 major markets across
North America.
• The US Public Company Accounting
Oversight Board (PCAOB) has changed the effective date of
new rules that require reporting by registered public accounting
firms and provide for succeeding to the registration status of a
predecessor firm.
The postponement will allow the PCAOB to
resolve technical issues related to deploying its new online system
for processing and publishing filings on the new forms.
It will not affect the timing of the first
annual reports required from registered firms, which will still be
due on 30 June 2010 for the 12 months ending 31 March 2010.
• Almost three-quarters of US executives want
the US Securities and Exchange Commission (SEC) to
approve its proposed IFRS road map or a modified version of it,
according to a survey by Deloitte US.
The study found 51 percent of respondents
thought the SEC should approve the proposed road map but consider
pushing back the mandatory deadline by a year, and 19 percent
believe the SEC should approve its proposed road map “as is”.
Opinions were split on the approach to
convergence.
Thirty-nine percent of respondents wanted the
International Accounting Standards Board and Financial Accounting
Standards Board to achieve as much convergence as possible between
now and 2011, and then focus on IFRS conversion.
The same number wanted the two groups to
extend the convergence plan over the next 5 to 10 years.
• More than 47 percent of Canadians who hold
the chartered financial analyst designation are not very confident
that they have a full understanding of what the impact of IFRS will
be on the companies they invest or follow, according to a survey by
PricewaterhouseCoopers Canada. Twenty percent were not at all
confident.
Canada is due to complete its transition to
IFRS by January 2011.
EUROPE
• Supervision of the financial sector in
Europe is set to be revamped through the formation of a series of
new regulatory organisations. The EC has adopted draft legislation
that aims to reinforce financial stability throughout the EU,
identify systematic risks at an early stage and foster cohesion and
co-operation in emergency situations.
The legislation will create a new
European Systemic Risk Board (ESRB) to detect
risks to the financial system as a whole.
It would also set up a European System
of Financial Supervisors, composed of national supervisors
and new authorities to oversee the banking, securities, insurance
and occupational pensions sectors.
Three new European supervisory authorities
will be created by transforming existing committees. The
Committee of European Banking Supervisors will
become the European Banking Authority, the
Committee of European Insurance and
Occupational Pensions Committee will
become the European Insurance and Occupational Pensions
Authority and the Committee of European Securities
Regulators will become the European Securities and
Markets Authority.
In addition to assuming the existing functions
of the committees, the new authorities will be responsible for
developing proposals for technical standards; resolving cases of
disagreement between national supervisors, where legislation
requires them to co-operate or agree; and contributing to ensuring
consistent application of technical community rules.
• The UK Audit Practice Board
(APB) has issued updated guidance on the auditing of complex
financial instruments. The updated practice note (PN) 23 modernises
an earlier version created in 2002.
It is aimed at assisting auditors address
current considerations that are relevant in the audit of financial
statements of entities that use complex financial instruments.
The guidance widens the scope of PN 23 to
cover other complex financial instruments, as well as derivatives,
as many of the audit considerations are the same, the APB said.
• A recent survey of UK accountants found 86
percent regularly work past normal working hours and 52 percent do
so every day.
The study, by online accounting provider
e-conomic, also found 38 percent of respondents regularly work past
10pm, and 22 percent of those that have children said it is quite
normal for them to not get home in time to see their children
before bedtime.
The most popular response when asked what
single thing would most improve their work life balance was ‘less
work for a higher margin’ and 28 percent thought they were
over-worked and under-paid.
The e-conomic survey was conducted this month
among 2,000 accountants.
• Des Hudson has been appointed chairman of
the Taxation Disciplinary Board by the
Chartered Institute of Taxation (CIOT) and the
Association of Taxation Technicians. Hudson is
currently chief executive of the Law Society of England and Wales
and was previously chief executive of the Institute of
Chartered Accountants of Scotland. His four-year term
begins on 1 November 2009.
• There is no case for any significant changes
in the UK’s governance rules in the wake of the financial crisis,
according to a recent study by the Institute of Chartered
Accountants of England and Wales (ICAEW) Foundation.
The report, Getting it Right, found
that over the past few years more effort has been made to
strengthen risk identification processes and ensure board
committees spend more time overseeing risk management.
Most of the non-financial company boards are
satisfied that their risk management is working well thus there is
no need for new governance structures and processes.
• The Institute of Chartered
Accountants in England and Wales has launched a register
that is intended to give courts greater confidence in the evidence
presented by members of the accounting profession. The forensic
accountant and expert witness accreditation scheme was developed in
response to pressure from the UK Government for improved
credibility of evidence presented to the legal system.
• The UK Financial Reporting
Council (FRC) has updated guidance to assist directors of
UK companies when making assessments of going concern. The guidance
is based on three principles: the process directors should follow
when assessing going concern; the period covered by the assessment;
and the disclosures on going concern and liquidity risk.
The guidance takes into account feedback from
market participants on a series of documents published by the FRC
in the past 12 months.
AFRICA, MIDDLE EAST, SOUTH ASIA
• Claims the Indian government has tightened its control over the
Institute of Chartered Accountants in India (ICAI)
and diluted the power of the institute’s president have been
refuted by the institute.
Earlier this month, Indian media reports
suggested one rule change, approved by the ICAI’s financial
committee, would require all financial issues at the ICAI to be
cleared consensually by members of the committee. The committee is
made up of three government nominees, the president and the
vice-president.
Previously, the ICAI president had the
authority to approve spending. The ICAI said there has been no
change in the composition of the finance committee since last year.
The rumours of efforts to curb the ICAI presidential powers follow
criticism from ICAI past president Sunil Talati about reckless
spending by current ICAI president Uttam Agarwal. Last month,
Talati called for a rethink of the extensive powers granted to ICAI
presidents when they take office.
• The Institute of Chartered
Accountants in England and Wales (ICAEW) and the
Institute of Chartered Accountants of Bangladesh
(ICAB) have signed a memorandum of understanding (MoU) to work
together to develop the accounting and auditing professions in
Bangladesh. The two institutes will continue their work to develop
a new ICAB qualification, look at examination requirements allowing
members of one body to access membership of the other, co-operate
on developing membership support and liaise on technical matters.
The agreement between the two bodies was signed on 26 October by
ICAEW president Martin Hagen and ICAB president Nasir Ahmed.
