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February 14, 2010

Region Round-up

• The Institute of Certified Public Accountants of Singapore (ICPAS) has appointed key members to its council…

• Tricia O’Malley has been appointed chair of the Canadian Accounting Standards Board (AcSB)…

• The Malta Institute of Accountants has issued a special standard for smaller entities, according to Deloitte’s IFRS website…

• The South African Institute of Chartered Accountants (SAICA) has become a certified training partner of the Global Reporting Initiative (GRI)…


• The Institute of Certified Public Accountants of Singapore (ICPAS) has appointed key members to its council. Ernest Kan has been appointed president of the ICPAS council after Tan Boen Eng stepped down from the position at the institute’s annual general meeting. Gerard Ee will join Kan on the council as vice-president and Khoo Ho Tong as treasurer.

Ernst & Young China (E&Y) has asked its staff to take low-pay leave in a bid to save operating costs amid the economic downturn, according to media reports. The initiative will encourage E&Y staff to take 40 days of low-pay leave between July 2009 and June 2010. Those who agree to participate in the programme will get 20 percent of their usual salary while retaining all of the benefits of a full-time employee.

Deloitte Malaysia’s corporate advisory services practice has become the first professional services firm to become an observer member of the Islamic Financial Services Board. Seven other observer members were also admitted, including Etiqa Takaful Berhad (Malaysia), Maybank Islamic Berhad (Malaysia), Barwa Bank (Qatar), Woori Investment and Securities (South Korea), Islamic Insurance Company (Sudan), Al Hilal Takaful Company (United Arab Emirates) and Moody’s Middle East Limited (United Arab Emirates).

KPMG Australia and Macquarie Bank have joined forces to create a full-scale carbon trading simulation under the proposed Carbon Pollution Reduction Scheme (CPRS). The simulation is designed to test drive clients’ emissions trading strategies and assess their skills, knowledge and business readiness in order to participate in the scheme. KPMG head of climate change, sustainability and water Jennifer Westacott said that with the CPRS set to go live in less than two years and a potential first permit auction in early 2010, business can not afford to be “sitting on its hands”.

• Internal audit in Malaysia has expanded its role in the risk management process with increased coverage of strategic and business risks, according to a survey by the Institute of Internal Auditors (IIA) Malaysia and Ernst & Young. The Internal Audit Practice in Malaysia 2008 Survey found that risk management is now regarded as a necessary competency for internal audit.

The respondents were from a cross section of key industries in Malaysia, including financial services, manufacturing, trading and services, oil and gas, plantations and property development.

It found that internal audit functions are growing in terms of size, skills and experience to meet the increasing and evolving needs of the organisations. Retention and recruitment of suitable internal audit talent was a key issue.

North America, Latin America

• Tricia O’Malley has been appointed chair of the Canadian Accounting Standards Board (AcSB). O’Malley previously chaired the AcSB from 1999 to 2001. She is currently director of implementation activities at the International Accounting Standards Board where she supports the International Financial Reporting Interpretations Committee’s development of official interpretations of IFRS. O’Malley will succeed Paul Cherry in mid-June.

• US Securities and Exchange Commission (SEC) acting chief accountant James Kroeker is pleased with the Financial Accounting Standards Board’s (FASB) proposed guidance for fair value measurement and impairment of financial instruments, but hopes the board will continue to reconsider accounting for all financial instruments. Kroeker said the FASB guidance directly addresses two recommendations made in the SEC’s December report on mark-to-market accounting, which he authored. He added that he hopes the board continues to reconsider accounting for all financial instruments, which was also recommended in the SEC report.

• Accounting rules must continue to be examined to require certain large, interconnected firms and markets to build up loan loss reserves that look forward and account for losses in downturns, according to US Treasury Secretary Tim Geithner. Geithner made the comments to a House Financial Services Committee hearing as he outlined the US government’s proposed framework for regulatory reform. Reducing systemic risk was one of four key struts outlined in the plan.

• Canada will adopt the clarified International Standards on Auditing (ISAs) as Canadian Auditing Standards (CAS) for audits of financial statements for periods ending on or after 14 December 2010.

The International Audit and Assurance Standards Board recently completed a five year project to clarify or redraft the 36 ISAs and the international standard on quality control. The adoption commitment by Canada’s Auditing and Assurance Standards Board (AASB) follows similar moves in jurisdictions including the UK and Korea.

The AASB said the approved CAS contain a few amendments from the wording of the ISAs.

• The American Institute of Certified Public Accountants, its subsidiary CPA2Biz and software provider Intacct have formed an alliance to develop a new version of Intacct’s on demand financial management and accounting applications. The alliance also aims to help SMEs control the scale of technology to improve their financial performances, financial advice and make better business decisions.

• The Public Company Accounting Oversight Board has issued a staff audit practice alert reminding auditors of their responsibilities in conducting reviews of interim financial information and annual audits in the light of new Financial Accounting Standards Board changes to fair value measurements and other-than-temporary impairments.

• A new IFRS navigation tool has been launched by Deloitte US to help companies transition to IFRS. The tool helps define, develop and track the company’s overall work plan.

It has scheduling features to help monitor and track resources and milestones, customisable modules to help identify accounting differences between US GAAP and IFRS, and portals to provide a view into tasks assigned to the user.


• A discussion paper on performance reporting has been prepared by the European Financial Reporting Advisory Group (EFRAG) and Spanish standard-setter Instituto de Contabilidad y Auditoría de Cuentas. The paper explores issues about the presentation of financial performance information that the International Accounting Standards Board and US Financial Accounting Standards Board’s recent discussion paper on financial statement presentation does not address. Comments are invited by 30 September.

• The UK Auditing Practices Board (APB) has issued ISA (UK and Ireland) 700 (revised) The Auditor’s Report on Financial Statements in order to facilitate a more concise auditor’s report. The revision followed a consultation on what changes should be made to UK auditors’ reports to reflect changes introduced by the Companies Act 2006. The revised ISA aims to facilitate shorter auditors’ reports.

• The Malta Institute of Accountants has issued a special standard for smaller entities, according to Deloitte’s IFRS website. The standard, General Accounting Principles for Smaller Entities (GAPSE), can be used by Maltese entities that meet criteria including fewer than 250 employees, assets below €17.5 million ($22.9 million), revenue below €35 million, not publicly traded and not financial institutions.

Previously all limited liability companies in Malta had been required to use IFRS.

• The European Financial Reporting Advisory Group (EFRAG) supervisory board has re-appointed six members of its Technical Experts Group (TEG). Mike Ashley, Alan Dangerfield, Catherine Guttmann, Hans Schoen, Thomas Seeberg and Michael Starkie will continue on the board for one year following their re-appointment. Araceli Mora has joined the TEG for a two year term.

• The Federation of European Accountants (Fédération des Experts comptables Européens – FEE) is unconvinced freeing up the ownership structures for audit firms will increase choice in the European audit market and supports market mechanisms rather than regulatory reform. The views were part of the group’s 14-page response to the EC’s consultation on control structures in audit firms and their consequences on the audit market.

The accounting body said there was no single element that could create more choice and less concentration in general but solving the liability issues both at member state level and globally was an essential precondition.

• UK Alternative Investment Market- (AIM) and PLUS-quoted companies with a turnover of £50 million ($80 million) will be regarded as major audits when the Professional Oversight Board (POB) conducts its 2009 audit inspections.

The watchdog said it reduced the market capitalisation threshold from £100 million to £50 million due to the significant reduction in the overall market capitalisation of these companies during the past year.

• The UK Financial Reporting Council’s (FRC) 2009-10 budget has revealed the core operating costs of its accounting, auditing and corporate governance will increase by 5 percent to £12.5 million ($18.3 million).

This is a reduction of £200,000 compared to the draft budget published in December 2008.

In relation to actuarial standards and regulation, it expects core operating costs to increase by 4 percent to £2.3 million.

Africa, Middle East, South Asia

• The Chartered Institute of Management Accountants (CIMA) has opened an office in Karachi, Pakistan, in response to the increasing demand for international finance professionals throughout the region.

CIMA director Andrew Harding said the average GDP growth in Pakistan is 6-8 percent and the country is an exciting emerging market that is attracting multinationals from around the globe.

“Our new office in Karachi will allow us to offer even greater support to our existing members and students and to create opportunities for the talented young people of Pakistan,” he said.

• The ICAI has formulated a framework for corporate affairs standards. The framework will be used to develop a benchmark, concepts, principles, practices and procedures in relation to the standards.

An ICAI committee has already drafted a corporate affairs standard that covers topics including business valuation and auditors’ appointment. The institute hopes the standards will ensure Indian corporate governance is benchmarked with global best practices.

• The Institute of Chartered Accountants of India (ICAI) has chosen 1,240 firms for a peer review in the wake of the Satyam scandal, according to media sources.

The Securities and Exchange Board of India (SEBI) recommended that all listed companies be audited by only those firms or auditors that have been issued a peer review certificate by the ICAI peer review board.

The institute has previously put 4,000 firms through a peer review and is said to be planning to fast-track the latest group.

• The South African Institute of Chartered Accountants (SAICA) has become a certified training partner of the Global Reporting Initiative (GRI).

GRI guidelines are considered international standards for sustainability reporting. SAICA is currently organising training courses based on the GRI process.

• The ICAI and CPA Australia have signed an agreement to allow qualified members of each institute to gain reciprocal membership. The ICAI has about 150,000 members and CPA Australia more than 122,000.

Under the memorandum, the two bodies will form closer working relationships through joint continuous professional development activities, knowledge sharing and close collaboration in international forums.

CPA Australia also recently signed a memorandum of co-operation with the Samoa Institute of Accountants.

• The Arab Society of Certified Accountants has signed an agreement with the Development Institute for Science & Computer in Dubai to train certified accountants.

The courses will qualify accountants under the Arab Certified Professional Accountant curriculum and also offer training in accordance with international accounting and auditing standards.

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