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September 29, 2009

Region Round-up


• Brian Blood has been appointed chief executive of the Confederation of Asian and Pacific Accountants (CAPA).

He has spent 27 years with Big Four accounting firms, including 16 years as a partner. During his time with the Big Four, he worked across the corporate, government and not-for-profit sectors. His career focused on external audit and since the mid-1990s has concentrated on building internal audit and business risk advisory practices.

Blood is a life member of CPA Australia and a fellow of the Institute of Chartered Accountants in Australia. He was president and chairman of CPA Australia in 2002 and served on the board for three years.

In 2003, he was honoured with a Centenary Medal for services to the accounting profession in Australia.

• A new leadership team has taken over at Malaysia’s Financial Reporting Foundation (FRF) and the Malaysian Accounting Standards Board (MASB).

Ali Abdul Kadir replaced Johan Raslan as chairman of the FRF in July. Kadir is a former chairman of Ernst & Young Malaysia, chairman of the national Securities Commission and head of Asia for the Dubai Investment Group. He has been actively involved in international regulatory circles as a member of the executive committee of the International Organisation of Securities Commission (IOSCO), chairman of IOSCO’s Asia-Pacific regional committee and chairman of the Islamic Capital Market Task Force.

Three recent high-level appointments at the MASB were Mohammad Faiz Azmi as chairman, Susela Devi as executive director and Tan Bee Leng as technical director.

• The Japanese Institute of Certified Public Accountants (JICPA) has launched an IFRS website designed to provide IFRS-related information in Japanese.

The content includes new IFRS pronouncements, the latest developments at the International Accounting Standards Board (IASB) and recent IFRS developments in other countries.

KPMG Australia has issued a guide for financial officers on managing the financial impacts and reporting of carbon emissions.

The guide identifies areas CFOs need to consider in response to the introduction of a price for carbon and associated reporting and compliance requirements.

These include understanding an entity’s position in relation to the introduction of Carbon Pollution Reduction Scheme and requirements of the National Greenhouse and Energy Act 2007; managing the financial impacts; overseeing reporting and assurance; and providing an overview of the collection and processing of carbon emissions data.

• The Australian Accounting Professional & Ethical Standards Board (APESB) has issued a standard for members in public practice who perform insolvency services.

APES 330 Insolvency Services, formerly APS 7, sets out mandatory requirements and guidance in respect of issues including fundamental responsibilities, independence, quality control and fees and expenses.

The standard is effective for insolvency services commencing on or after 1 April 2010. Early adoption is permitted.


• Charles Niemeier has announced he intends to stand down as a board member of the US Public Company Accounting Oversight Board (PCAOB) in the near future. Niemeier’s term ended on 25 October 2008, but board members may remain in their positions until a successor is appointed. Niemeier was a founding member of the PCAOB and has been a vocal critic of US adoption of IFRS. He was also touted as a front runner for the position of chief accountant at the US Securities and Exchange Commission. However, this position recently went to James Kroeker.

• The US Financial Accounting Standards Board (FASB) has proposed to improve disclosures about fair value measurements that use significant unobservable inputs. The board said users have requested more information in these circumstances due to the uncertainty and subjectivity involved. Therefore, the FASB has proposed disclosures about any significant effects on fair value measurements if reasonably possible alternative inputs were used. The changes would come as an update to Fair Value Measurements and Disclosures—Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification, originally issued as FASB Statement No. 157, Fair Value Measurements. They would affect all entities required to make disclosures about recurring and nonrecurring fair value measurements.

• The American Institute of Certified Public Accountants (AICPA) has appointed Carol Scott as vice president of business, industry and government. Scott joins the AICPA from publicly-listed home improvement and building products company Masco Corporation, where she was vice president of finance and human resources. At the AICPA, Scott will set strategic direction and execute programmes on behalf of the executive officer, financial officer, controllers and other CPAs. She will also be an advocate for members in industry and government and oversee AICPA projects.

• The Canadian Accounting Standards Board (AcSB) has appointed 17 members to its IFRS Discussion Group (IDG). The group will be chaired by Ernst & Young’s Doug Cameron. It is still seeking an additional financial statement user. Its first meeting will take place on 25 November in Toronto.

• The US Center for Audit Quality (CAQ) has released an IFRS guide that is intended to provide all capital market stakeholders a timely, accessible and objective introduction to the current debate over a single set of global accounting standards. The CAQ has previously expressed the belief that investors would benefit if issuers around the world prepared financial statements using a single set of high-quality accounting standards. However, executive director Cindy Fornelli has acknowledged that many stakeholders may have questions about the potential impact of adoption of IFRS.

• The US National Association of State Boards of Accountancy (NASBA) has accredited the Institute of Management Accountants’ (IMA) live webinar events as an approved source of continuing professional education (CPE) credits. Accounting professionals with certifications including the Certified Management Accountant and Certified Public Accountant can now use IMA webinars to meet their annual CPE requirements.


• The European Financial Reporting Advisory Group (EFRAG) does not believe the International Accounting Standard Board’s (IASB) recent exposure draft on income taxes improves the existing IAS 12 and said it should not be used as a basis for a revised standard.

In a comment letter to the IASB, EFRAG said a fundamental objective of the project was to achieve convergence with US GAAP. However, the US Financial Accounting Standards Board has deferred any decision on whether to undertake projects that would eliminate differences in the accounting for tax under IFRS and US GAAP, therefore this objective will not be achieved.

EFRAG also said the changes lack workable principles and asked that the IASB conduct field tests.

• Finnish professional body HTM/GRM has elected Jukka Silvo as its new chairman. He replaces Ossi Saarinen.

HTM/GRM is one of the two Finnish member bodies of the Nordic Federation of Public Accountants (NRF).

• The European Federation of Accountants (Fédération des Experts Comptables Européens – FEE) has issued guidance on cross-border codes of conduct in the EU internal market. The guidance is a response to an EC directive on services in the European internal market that requires the EC to encourage drawing up codes of conduct aimed at the provision of services or the establishment of a provider in another member state. FEE said the IFAC code of ethics could be used as a reference for ethics for European accountants.

• The UK Accounting Standards Board (ASB) has amended the standard FRS 20 (IFRS 2) Share-based payment group cash settled share-based payment transactions.

The amendments correspond to those issued by the International Accounting Standards Board (IASB) in June 2009.

It clarifies both the scope of the standard and the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payments transaction.

The amendment maintains the equivalence between FRS 20 and IFRS 2.

Entities are required to apply the amendments retrospectively for annual periods beginning on or after 1 January 2010.

• Grant Thornton UK has cited a recent merger, the recession and natural attrition as the root causes of a 17 percent partner decline in the 2008/09 financial year. The firm revealed its partnership dropped from 286 to 237 partners.

Grant Thornton chief executive Scott Barnes said there was “nothing unusual” about the contracting partnership. He said one of the reasons was the firm’s merger with Robson Rhodes in 2007. Another cause cited was the recession with some partners departing to go to other organisations and others being asked to leave.

Barnes said the mid-tier firm is still on the lookout for new partners and in the past month admitted two more.

Last month, UK firm BDO Stoy Hayward announced 10 percent of the partners from its UK business would be leaving the firm.

• The contraction of the UK publicly listed audit market is continuing at a steady speed, according to the latest quarterly rankings by business and financial data provider Hemscott.

The top five auditors of UK listed companies lost a combined total of 36 audit clients in the three months to 3 August 2009. This comes on top of a combined total of 33 audit clients lost in the three months to 6 May 2009.

The overall ranking of the top five auditors remains unchanged. KPMG lost four clients to finish with 381, PricewaterhouseCoopers (PwC) was down two to 339, Deloitte lost seven to finish with 309, Grant Thornton dropped nine clients to finish with 286 and Ernst & Young was down 14 to 271.


• South Africa has issued a new version of its code on corporate governance to reflect changes to the country’s Company Act and lessons learned from the financial crisis. The third version of the King Report on Corporate Governance includes a revised chapter on risk management and a new chapter on IT governance.

New requirements include an annual integrated report that focuses on the impact of the organisation in the economic, environmental and social sphere. The integrated report must also include a statement by the audit committee to the board and shareholders on the effectiveness of internal financial controls.

The positioning of internal audit as a strategic function that conducts a risk-based internal audit and a written assessment of the company’s system of internal control, including internal financial controls must also now be reported.

• The National Institute of Accountants (NIA) and the Institute of Chartered Accountants Sri Lanka (ICASL) have agreed to mutual recognition of their respective qualifications. NIA chief executive officer Andrew Conway said the agreement would help members work internationally.

“This agreement grants members of both institutes the eligibility of admission to the other body, paving the way for Australian accountants to practise in Sri Lanka or vice-versa,” he said.

Both bodies will promote the transfer of skills and knowledge between members of each institute through study tours, joint conferences, seminars and congresses, and other professional development activities.

• The Institute of Chartered Accountants of India (ICAI) has issued two exposure drafts for standards based on international public sector accounting standards.

Accounting Standard for Local Bodies (ASLB) 5: Property, Plant and Equipment, allows users of financial statements to separate information about an entity’s investment in its property, plant and equipment and the changes in such investment.

ASBL 6: Events After the Reporting Date proscribes when an entity should adjust its financial statements for events after the reporting date and the disclosures that the entity should give about the date when the financial statements were authorised for issue and about events after the reporting date. The deadline for comment on both is 30 November.

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