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January 14, 2008

Region round-up

• The Accounting Standards Board of Japan has released two accounting standards and an issue paper for public comment…

• The Institute of Chartered Accountants of Nigeria is holding its second annual Western Districts conference in Lagos from 11 to 14 February…

• Daniel Dunga has replaced Hennox Mazengera as executive director of the Society of Accountants in Malawi (SOCAM)…

• Local governments and authorities in the UK are to prepare their accounts using IFRS from 1 April 2010…

Asia-Pacific Asia Pacific• The Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority, and the Singapore Exchange have established the Audit Committee Guidance Committee (ACGC). The new body will develop practical guidance for audit committees to strengthen corporate governance practices of listed companies in Singapore. The ACGC will be chaired by former KPMG Singapore managing partner Bobby Chin Yoke Choong. ACGC members will be drawn from the business community as well as stakeholder groups, including the Institute of Certified Public Accountants of Singapore and the Singapore Association of the Institute of Chartered Secretaries and Administrators.

• The Accounting Standards Board of Japan has released two accounting standards and an issue paper for public comment. The Accounting Standard for Construction Contracts (Statement No 15) and the Guidance on Accounting Standard for Construction Contracts (Guidance No 18) are available in Japanese only. The issue paper on accounting for research and development costs has been published for comment until early February.

• A report from three Australian institutes has highlighted a selection of areas where they believe the International Accounting Standards Board’s proposed IFRS for SMEs can be improved. The CPA Australia, Institute of Chartered Accountants of Australia and National Institute of Accountants findings include: more clarity is required in the area of offsetting deferred tax, accounting for contingent consideration and in the financial assets and financial liabilities; understanding was limited in relation to the ‘relevant and reliable’ concept to the selection of accounting policies; and disclosure reductions were minimal for reporting entities and increased substantially for non-reporting entities that previously adopted minimal disclosures.

• The Australian Accounting Standards Board released an exposure draft on proposed amendments to determining the cost of an investment in a subsidiary, jointly controlled entity or associate. The draft incorporates the International Accounting Standards Board’s exposure draft on proposed amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate.

• Foreign companies operating in China are to pay more corporate tax as part of reforms aimed at equalising treatment of domestic and overseas companies. The Chinese government is to introduce a new 25 percent corporate tax rate for both international and domestic companies. Previously, domestic rates were 33 percent while many overseas companies paid 15 percent or less, or were granted tax holidays. Grant Thornton UK China Group head Stephen Weatherseed said the tax package also encourages hi-tech and environmentally friendly industries through lower 15 percent rates and other incentives.

• Japanese firm Ernst & Young ShinNihon (E&Y) has completed the inward transfer of 1,065 employees from former PricewaterhouseCoopers Global (PwC) Japanese member firm Misuzu Audit Corporation. Misuzu announced a wind-down of operations and split from PwC early last year following two accounting scandals. E&Y ShinNihon said the transferees have been undergoing intensive training in auditing techniques and tools since early July to enable them to quickly adapt to their duties with their new employer.

Africa, Middle East, South Asia Africa, Middle East, South East Asia• The Institute of Chartered Accountants of Sri Lanka has revealed W Fernando will take over as president for the years 2008-2009. He will be joined in a leadership capacity by vice-president D Mudalige.

Arab Society for Certified Accountants chair Talal Abu-Ghazaleh has called for a preliminary meeting to convene next month at the World Trade Organization headquarters in Geneva, to officially announce the launch of the Arab Coalition for Bilateral Trade. “The coalition will support the role of the services sector in bilateral trade and national economies of the Arab countries. This preliminary meeting will determine the specifics of establishing such a coalition; its administration and headquarters as a regional and private Arab foundation,” Abu-Ghazaleh said.

• The National Board of Accountants and Auditors Tanzania is holding a seminar on the theme of Audit – Security, IT and Governance on 2 February in the Southern Highlands city of Morogoro. The seminar is targeted at auditors, accountants, audit committee members, directors, heads of accounting institutions and students. Topics for discussion will include auditing and risk management, effectiveness and challenges of audit committees in Tanzania, the continuing impact of the Sarbanes-Oxley Act on organisations, auditing in promoting good governance and techniques for dealing with latest IT audit-related issues.

• The Institute of Chartered Accountants of Nigeria is holding its second annual Western Districts conference in Lagos from 11 to 14 February. The theme of the conference is Corporate Governance Re-Engineering: The Challenges to the Accounting Profession. The conference will involve two plenary sessions to address the issues and challenges related to social responsibility and corporate governance and the role of chartered accountants regarding ethics, integrity and corporate governance.

• The Institute of Chartered Accountants of Pakistan is seeking applicants from among its final level accounting students for a student exchange programme with the Institute of Chartered Accountants of Sri Lanka and the Institute of Chartered Accountants of Nepal. The exchange is part of the South Asian Federation of Accountants’ student exchange programme.

• Daniel Dunga has replaced Hennox Mazengera as executive director of the Society of Accountants in Malawi (SOCAM). Mazengera is one of the longest-serving council members on the Eastern Central and Southern African Federation of Accountants. In a farewell speech recently, he revealed that SOCAM has grown to about 500 members in just over a decade and has a net worth of MWK48 million ($338,000).

Europe Europe• The UK Accountancy and Actuarial Discipline Board (AADB) has proposed changes to its disciplinary scheme to encourage the principles of fairness, transparency and proportionality. Mike Fogden, the AADB’s chairman, said: “The board is confident that the changes it is proposing will further strengthen the disciplinary process in public interest cases.”

• The Institute of Chartered Accountants in Ireland (ICAI) members have approved 13 new post-qualification specialisation awards to be offered by the institute. The awards consist of masters programmes, diplomas, certificates and a specific tax qualifications. They include a diploma in IFRS, a diploma in managing people, a masters in corporate leadership, a masters in information systems strategy, certificate in executive leadership, diploma in US GAAP, certificate in director’s duties, diploma in wealth management, diploma in forensic accounting, diploma in corporate finance, chartered tax consultant, diploma in financial services and a diploma in project management.

• The Institute of Chartered Accountants in England and Wales has revealed the three candidates for its vice-president role. Ian Hayes, the managing director of Vataxworld, Gerald Russell, a senior partner at Ernst & Young UK and Paul Wagstaff, a client partner at HLB Vantis Audit have put their names forward for election. Voting by members of council will close on 4 February. The result will be announced at the institute’s council meeting on 6 February. The successful candidate will take office in June 2008.

• The European Court of Auditors has announced the appointment of its 11th president. Da Silva Caldeira, who has been elected to the position for the next three years, has been a member of the court since March 2000. Caldeira will be responsible for the court’s effective management and will also represent the institution’s external relations.

Mazars Group has recruited former secretary general of the Committee of European Securities Regulators, Fabrice Demarigny, to head the firm’s capital market activities. Demarigny spent six years working on the European single market and has worked at the French securities regulator.

• Local governments and authorities in the UK are to prepare their accounts using IFRS from 1 April 2010. The Chartered Institute of Public Finance and Accountancy (CIPFA) outlined details of a two-year programme to develop and implement a new IFRS-based code of practice for local authority accounting. CIPFA said the timetable should ensure councils have enough time to prepare for the move to IFRS. It will also allow a review of the contents of local authority accounts to be undertaken in order to identify the scope for simplification.

• The UK Financial Reporting Council (FRC) is to focus heavily on confidence in corporate reporting and governance as well as potential risks to the profession, including the impact of credit market turbulence, as part of its strategic plan for the next two years. The council’s proposed budget for corporate governance, reporting and accounting related activities is to increase by 9 percent to £11.9 million ($23.3 million) for 2008/2009. The FRC said it is planning to monitor corporate reporting and governance, increase participation in the development of international standards and modify the UK regulatory regime to reflect changes in UK and EU legislation, such as the EU Directive on Statutory Audit.

North America, Latin America Americas• The American Institute of Certified Public Accountants (AICPA) has welcomed efforts by the US Financial Accounting Standards Board (FASB) to simplify US GAAP as part of its codification project. AICPA president and chief executive Barry Melancon commented: “The codification represents a simplification of the enormous body of accounting standards. It renders GAAP more understandable and accessible for research.” FASB’s Accounting Standards Codification project involves organising thousands of pronouncements into a single and easily accessible source. The FASB recently launched the verification phase of the project.

US Securities and Exchange Commission chair Christopher Cox told a recent American Institute of Certified Public Accountants conference that IFRS, XBRL [extensible business reporting language] and mutual recognition are coming to the US. “Reporting by foreign private issuers using a single IFRS platform will help American investors analyse and get more readily comparable information from the US-registered foreign companies in which they invest. That’s precisely what the commission in 1981 cited as our objective. So now, a quarter century later, we’ve succeeded,” Cox said. The regulator said XBRL is on the threshold of becoming the universal language of business information and will “do for information sharing what IFRS will do for financial reporting”.

• The Certified General Accountants Association (CGA) of British Columbia has elected Patrick Keller as its president for 2008. Keller is an electronic commerce audit specialist for the Canada Revenue Agency in Penticton. His role at the CGA chapter is to represent members and students to the business community, educational institutions, government and the public. Keller was first elected to the institute’s board in 2002.

• Anthony Hopwood, a professor of operations management at Saïd Business School, Oxford, has received the 2008 lifetime contribution award from the management accounting section of the American Accounting Association. The lifetime contribution award, which was sponsored by the American Institute of Certified Public Accountants, recognises individuals who have made an important mark on management accounting education, research and practice.

• Canada’s Audit and Assurance Standards Board has affirmed its decision to adopt International Standards on Auditing as Canadian Auditing Standards (CAS). The board said CAS will become effective for audits of financial statements for periods beginning on or after 15 December 2009. To date, four CAS have been completed, four are in the final completion stage, 22 have been issued as exposure drafts and five are expected to be issued as exposure drafts within the next quarter.

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