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September 14, 2007

Region round-up

Region round-up

Asia-Pacific

Asia Pacific• The Australian Auditing and Assurance Standards Board (AUASB) is seeking comments on a draft standard covering the review of financial reports and other historical information. The proposed standard modernises the existing standard to align it with other related assurance standards and clarifies the assurance practitioner’s obligations when conducting reviews. The exposure draft is available on the AUASB website. Comments are required by 31 October 2007.

• The Malaysian Institute of Accountants has held its 2007 regional conference with the objective of developing the understanding of business, accounting and finance professionals on key developments in the Iskandar Development Region, which is the new main southern development corridor in Johor.

• The Australian government has proposed changes to the thin capitalisation rules in income tax legislation in an attempt to address what it called the “adverse impacts” of the adoption of the Australian equivalents to IFRS (AIFRS). Differences between AIFRS and the former Australian GAAP resulted in the thin capitalisation positions of some entities being substantially affected. A transitional period during which entities could elect to use either AIFRS or Australian GAAP to make thin capitalisation calculations will begin to expire from 31 December 2008.

• The New Zealand Institute of Chartered Accountants has developed a new web-based guide to help not-for-profit groups find appropriate business tools and information. The institute’s not-for-profit committee chair, Carolyn Cordery, said: “We need not-for-profit organisations so that society runs smoothly, particularly since the government is contracting more and more with such organisations to deliver services in the community.”

Deloitte China has become a sponsor of China’s first global business journalism programme, which launches at Tsinghua University this month. Deloitte said the goal of the initiative is to create a new generation of business journalists able to produce insightful, balanced coverage of China’s markets and the global economy.

• Filipino firm Diaz Murillo Dalupan (DMD) has promoted four senior personnel to full partnership. Arnulfo Romero and Bethuel Tanupan have been named partners in the tax and corporate services division. Jozel Francisco Santos and Rowie Evacitas have been made partners in the audit and business assurance division; both are products of the firm’s professional career development programme. DMD has more than 100 staff members. The firm joined the Leading Edge Alliance in March this year.

Deloitte Australia is launching a production pilot of eXtensible Business Reporting Language (XBRL) for the preparation of financial reports for a selection of middle market clients. Deloitte Digital chief executive Peter Williams said he expects the XBRL-based solutions currently being developed will “deliver huge cost savings” for business, regulators and government.

Africa, Middle East, South Asia

Africa, Middle East, South East Asia• The Institute of Chartered Accountants in India (ICAI) has unveiled the makeup of its disciplinary committee and disciplinary board. ICAI president Sunil Talati is the presiding officer of both bodies. Joining him on the disciplinary board are ICAI council member Rajkumar Adukia and Indian Government nominee Suman Kumar Nayak. Other members of the committee include council members S Santhanakrishnan and Abhijit Bandyopadhyay as well as government choices RK Handoo and MP Lohia.

• Several South African companies have criticised the application of IFRS, saying it does not represent a realistic and true reflection of a company’s financial performance, the South African Institute of Chartered Accountants has said. The institute’s executive president Ignatius Sehoole said the companies’ criticism comes annually. “Not only is it a way of explaining why their results have not met expectations, but it is also a fine decoy for focusing attention away from more sensitive corporate issues,” he commented.

Deloitte South Africa has backed the South Africa Institute of Chartered Accountants qualification. The Big Four firm said the qualification is internationally accepted, respected and highly paid. “It opens up opportunities to specialise in disciplines as interesting and diverse as auditing, corporate finance, information technology, marketing, fraud investigation and investment advice,” Deloitte stated.

• The council of the Institute of Cost and Works Accountants of India recently elected Chandra Wadhwa as president and Kunal Banerjee as vice-president for the years 2007 and 2008.

KPMG East Africa has admitted four new partners. Philip Muema has been admitted as a tax partner and will assist clients to set up operations in Kenya. Benson Ndung’u has been admitted as an audit partner responsible for the KPMG Uganda practice. David Leahy has been appointed as a partner in the advisory services with particular responsibility for internal audit services. Jacob Gathecha has been admitted as an audit partner at KPMG Kenya.

• The Dubai Financial Services Authority (DFSA) has entered into a memorandum of understanding with the Hellenic Capital Market Commission of Greece. DFSA chief executive David Knott said: “The Hellenic Capital Market Commission has been a valued member of the International Organisation of Securities Commissions and an active participant in the work of the Committee of European Securities Regulators, adopting and harmonising international standards in Europe and continuing to establish world class standards in the regulation of capital markets.”

• The South African Institute of Chartered Accountants (SAICA) has revealed that 171 new cases of alleged improper conduct from chartered accountants (CAs) in South Africa were opened during 2006. SAICA project director for ethics and discipline Jan Dijkman said the number is marginally higher than in 2005, although the improprieties are “minuscule” when compared to the more than 26,000 registered CAs in South Africa. Dijkman said many of the cases related to minor complaints.

 Europe

Europe• The UK Financial Reporting Review Panel has published its activity report for the year to 31 March 2007. The panel reviewed 311 sets of accounts of which 227 were prepared under IFRS and 84 under UK GAAP. The report completes the panel’s findings from its review of first-time implementation of IFRS. The panel found a “good level” of compliance with international accounting requirements but identified areas for improvement, including accounting policies, disclosure of judgements and estimates, new standards and interpretations, intangible assets, impairment testing and related party disclosures.

• The Russian Institute of Internal Auditors has teamed up with KPMG Russia for a research project on the state and development of internal auditing in Russia. Chairs of audit committees, chief executives and directors of divisions performing internal audit functions are being asked to take part.

• About 50 chartered accountants (CAs) in Ireland are planning to walk across fire in the hope of raising more than €30,000 ($42,250) for two Irish charities. Institute of Chartered Accountants in Ireland young professionals committee chair Shauna Greely said: “In addition to satisfying some people’s desire for a modern day accountants’ inquisition, we are also raising money for two great causes.” The institute has also launched a new €200,000 advertising campaign to raise the profile of CAs.

PricewaterhouseCoopers Switzerland has sponsored the creation of a new professor specialising in financial accounting at the University of Bâle, Zurich. The five-year position is the first partnership in a series of engagements between the Big Four firm and educational institutions.

• The UK Financial Reporting Council has announced the appointment of Ian Wright as its new director of corporate reporting. Wright has also been appointed deputy chair of the Financial Reporting Review Panel and will be responsible for the strategic outcome on corporate reporting and the needs of investors for high-quality information.

• Flexible working hours are more important to female accountants in business than their male counterparts, according to a survey from the Institute of Chartered Accountants in England and Wales (ICAEW) and recruiter Robert Half. ICAEW chief executive Michael Izza said: “It is a subject that will continue to dominate UK business for some time and it will be interesting to see if flexible working will become a bigger issue to men.”

• First-time IFRS implementation by Alternative Investment Market (AIM) listed companies this year has resulted in delays to interim announcements, KPMG UK research has found. This has left a glut of announcements expected before the 30 September deadline for companies with December year-ends. Only around 40 percent of AIM companies with December year ends and a market capitalisation of £10 million ($20.2 million) or more have released their interims this month, compared to 50 percent at the same time in 2006.

Alvarez & Marsal has named Michael Keppel as Geschäftsführer (managing partner) and co-head of the firm’s turnaround and performance improvement practice in Germany.

North America, Latin America

Americas• The Certified General Accountants Association of Canada (CGA-Canada) has launched an interactive web-based tool designed to assist auditors of federal political campaigns. The Elections E-Guide includes new changes to Canada’s Elections Act that came into effect in January 2007. President and chief executive of CGA-Canada Anthony Ariganello said: “Although a general federal election is not on the immediate horizon, the guide will help in educating and informing campaign workers while assisting with compliance.”

• The Accounting Standards Executive Committee of the American Institute of Certified Public Accountants has issued an exposure draft of a proposed audit and accounting guide on airlines that addresses many new accounting issues relevant to the airline industry. It includes chapters dedicated to air cargo and regional carriers.

• The International Accounting Standards Board (IASB) is seeking comments on a proposal to improve the accounting for joint arrangements. Exposure Draft 9 Joint Arrangements proposes a replacement to the existing standard IAS 31 Interests in Joint Ventures, and represents the first major revision to the standard since it was issued in 1990. The review forms part of the IASB’s project with the US Financial Accounting Standards Board to reduce differences between IFRS and US GAAP. The main focus of the proposal includes shifting the focus from legal form to contractual rights and obligations.

• The Bahamas Institute of Chartered Accountants has elected Daniel Ferguson as its president for the next two years. Council members elected to serve for the 2007-2008 administrative year include: Lawrence Lewis (vice-president), Roslyn Minnis (secretary) and Kendrick Christie (treasurer).

• Mat Young has become the inaugural director of congressional and political affairs at the American Institute of Certified Public Accountants (AICPA). The 32-year-old is returning to public policy advocacy after 1.5 years in Canada as an independent political consultant. He will be charged with covering several issues for the institute, including the Sarbanes-Oxley Act and tax policy. AICPA has also appointed William Roberts, a former White House reporter for Bloomberg News, as director of media relations in its Washington, DC office.

• The US Securities and Exchange Commission (SEC) has charged 69 auditors with issuing audit reports on public companies despite not being registered with the Public Company Accounting Oversight Board (PCAOB). The SEC administrative orders have named 37 unregistered audit firms and 32 audit partners whom it claims participated in the preparation and issuance of their unregistered firms’ audit reports. According to the regulator, these firms and partners did not comply with a fundamental requirement of the Sarbanes-Oxley Act – that accounting firms that prepare and issue audit reports of public companies must be registered with the PCAOB.

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