•The Australian Financial Reporting Council
will develop apaper that will discuss different options for establishing an
accounting standard in the Australian context of an emissions
trading scheme. This decision was one of several made when the
council met in Canberra recently.
Other major outcomes of the meeting included: the proposal to
form an Australian expert panel to give advice in relation to the
credit crunch and valuations; and a statement from the chairman of
the Australian Audit and Assurance Standards Board that Australia
should proceed on the assumption that the adoption date for the
International Auditing and Assurance Standards Board clarity
standards will be 1 January 2010.
• The
Australian Auditing and Assurance Standards Board
has released its first assurance standard on compliance
engagements. Assurance Standard (ASAE) 3100 Compliance Engagements
will assist with the audit or review of an entity’s compliance with
requirements under legislation, regulation, company policies,
statutory requirements and enforceable contractual obligations.
The board previously provided subject matter-specific guidance
to auditors on areas of compliance. Practitioners will need to use
this standard for reporting periods or engagements commencing on or
after 1 October 2008. Early adoption is permitted.
• The Accounting Standards Board of Japan has
released a draft accounting standard on disclosures about fair
value of investment and rental property and its implementation, as
well as a further six draft standards on business combinations and
related matters. The drafts are available only in Japanese.
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By GlobalData• Deloitte New Zealand has admitted three new
partners, bringing the firm’s number of full equity partners to 77.
Brendan Lyon will become a partner in the risk and assurance team,
Shari Carter will be a partner in the accounting and advisory team
and Richard Kirkland will be a partner in the enterprise risk
services team.
• The Australian Auditing and Assurance Standards
Board has issued Guidance Statement (GS) 008 The Auditor’s
Report on a Remuneration Report Pursuant to Section 300A of the
Corporations Act 2001.
In complying with the guidance, the auditor’s report will now
have two distinct sections: the conventional section that includes
the auditor’s opinion on the financial report; and a new section,
which contains the auditor’s opinion on the remuneration
disclosures in the directors’ report.
• Ernst & Young Australia (E&Y) and a
group of influential chief financial officers have produced a guide
to help companies prepare non-statutory reports. The guide is a
response to a growing trend for Australian companies to produce
narrative-based reports because annual reports are becoming too
complex.
• Australian consolidator WHK Group has
acquired four new businesses under ‘tuck-in’ arrangements with
existing member firms. The combined acquisitions bring A$5.5
million ($5.3 million) in annual revenue to the stock
exchange-listed member of Horwath International.
Africa, Middle East, South Asia
• A memorandum of
understanding is to be formulated between the United Nations
Educational, Scientific and Cultural Organization and Middle East
professional services group the Talal Abu-Ghazaleh
Organization (TAGorg). The memorandum will draw up a
comprehensive strategic plan for co-operating in capacity-building
in the Arab region. This will include education, qualification and
training in the public and private sectors. TAGorg chairman Talal
Abu-Ghazaleh said: “TAGorg’s policy is dependent on
capacity-building as a culture whose main beneficiary is those who
own it and not who provide it.”
• The Institute of Chartered Accountants of
Pakistan (ICAP) has adopted the revised International
Federation of Accountants (IFAC) Code of Ethics with some
amendments. In announcing the move, the ICAP noted: “[The]
replacement of Section 9 (now Section 290) of ICAP Code relating to
independence, which is one of the significant changes in the
revised IFAC Code, was already approved and implemented by the
[ICAP] Council in its 171st meeting held on 29 April 2005. In the
revised IFAC Code there is no significant change in the section
relating to independence.” The code is effective for Pakistani
chartered accountants on 1 January 2009. Section 290 is applicable
to assurance engagements when the assurance report is dated on or
after 1 January 2009.
• The first distance learning centre to offer the
Association of Accounting Technicians (AAT)
accounting qualification has opened in Cape Town, South Africa. The
UK-based AAT’s accounting qualification is offered at centres in
Cape Town, Centurion and Johannesburg, however, the distance for
many students to get to these centres previously imposed a physical
barrier to being able to study the AAT.
According to the AAT, the South African Institute of Chartered
Accountants has supported the UK-based association offering its
diploma in South Africa to help fill a gap in the accounting
technician market.
• The Dubai Financial Services Authority (DFSA)
has entered into a Memorandum of Understanding (MoU) with the
Financial Services Board of South Africa (FSB). The signing took
place between DFSA chief executive David Knott and FSB executive
officer Rob Barrow during the annual conference of the
International Organization of Securities Commissions (IOSCO) in
Paris recently. Knott said: “The Financial Services Board of South
Africa is a valued member of IOSCO and a leading participant in the
African and Middle East region, of which the DFSA is also a member.
Both the FSB and the DFSA are signatories to the IOSCO Multilateral
MoU, having satisfied the highest standards of co-operation and
assistance among IOSCO members.”
• The Talal Abu-Ghazaleh Organisation (TAGorg)
has opened an office in the Dubai International Financial Centre
(DIFC). TAGorg chairman and chief executive Talal Abu-Ghazaleh said
establishing the office, the organisation’s 71st, will enable it to
properly serve its clients in the DIFC with its full suite of
professional services which range from covering economic and
strategic studies to human resources and recruitment
services.
Europe
• The UK
Financial Reporting Council (FRC) has published
guidance on the use of agreements between companies and their
auditors to limit the auditor’s liability, as provided for under
the Companies Act 2006. The guidance explains what is permissible
under the 2006 Act; discusses what matters should be covered in an
agreement and provides specimen clauses for inclusion in
agreements; sets out some of the factors that will be relevant when
assessing the case for an agreement; and explains the process to be
followed for obtaining shareholder approval. The FRC will review
the impact and content of the guidance in the second half of 2010
to ensure that it incorporates developments in generally accepted
practice and any other new developments.
• FAR SRS, the professional institute for
authorised public accountants in Sweden, has reached an agreement
with the Association of Swedish Accounting
Consultants (Sveriges Redovisningskonsulters Förbund –
SRF) to give mutual recognition to members and co-operate more
closely. FAR SRS has about 4,800 members. SRF, an 800 member
book-keeping body, has previously partnered with FAR SRS to clarify
book-keeping roles and responsibilities and to ensure consistent
quality in the sector.
• The UK Accounting Standards Board has issued
a financial reporting exposure draft (FRED) of improvements to UK
financial reporting standards (FRS). The ASB has issued the FRED
with the aim of seeking to maintain the existing levels of
convergence between FRS and IFRS. The proposals include the same
improvements to FRS as those made to IFRS where the UK standard is
based on its international equivalent. The exposure draft also
proposes improvements to FRS, as well as an update to UK IFRS-based
FRS where the equivalent IFRS has been amended or updated. The
deadline for comment is 27 September 2008.
• The UK Chartered Institute of Public Finance and
Accountancy (CIPFA) has joined forces with the UK
Department for International Development (DFID) to improve public
financial management in the developing world. CIPFA and DFID are
analysing the public financial management institutional framework
and the effectiveness of systems that operate globally, regionally
and at country level. DFID’s director general of country programmes
Mark Lowcock said: “We believe that CIPFA is uniquely placed to
contribute to the necessary improvement of international public
sector accounting and auditing standards as well as
professionalisation in developing countries.”
• BDO Numerica, the BDO member firm in Poland,
has combined with the Polish member firm of Grant Thornton. It will
merge it into an accounting practice with 350 professionals and
combined fee income of €20 million ($31 million). BDO Numerica
ranked as the largest accounting firm outside the Big Four in the
International Accounting Bulletin’s inaugural survey of
the Polish profession in March this year, with fee income to
December 2007 of PLN45 million ($20.6 million). Grant Thornton was
the seventh highest international affiliate, posting a
significantly smaller fee income of PLN8.1 million.
North America, Latin America
•
The US Securities and Exchange Commission (SEC)
has launched an internal study to examine the best way financial
information can be disclosed to meet the needs of all stakeholders.
SEC chairman Christopher Cox said the regulator is investigating
the way it acquires information from public companies, mutual
funds, brokers and other regulated entities, and how it makes that
information available to investors and the markets. “With so much
new technology available to improve the quality of information for
investors as well as the way investors acquire it, we’re initiating
a broad, introspective look at our business model,” Cox said. The
study will be led by William Lutz of Rutgers University in New
Jersey.
• The US Securities and Exchange Commission has
approved a one-year extension on the compliance date for smaller
public companies to meet the Section 404(b) auditor attestation
requirement of the Sarbanes-Oxley Act.
Smaller companies will now be required to provide attestation
reports for fiscal years ending on or after 15 December 2009. The
commission has also received approval to proceed with data
collection for a study of the costs and benefits of Section 404
implementation, focusing on the consequences for smaller companies
and the effects of the Section 404 auditor attestation
requirements.
• A succession planning resource centre has been established by
the American Institute of Certified Public
Accountants (AICPA) to assist small- and medium-sized
firms. Only 35 percent of multi-owner firms and 9 percent of sole
owner firms have a written succession plan, according to a recent
survey by the AICPA. The online resource centre will provide a
variety of succession scenarios practitioners can work through,
including selling the firm; merging the firm – including both
downstream and upstream mergers; developing new leadership; and
transitioning issues associated with retiring partners and value of
the firm.
• The US Securities and Exchange Commission has
charged a former partner at Ernst & Young US (E&Y), his
friend, and his friend’s father in an insider trading scheme that
resulted in nearly $600,000 of illicit profits. The charge alleged
that from summer 2006 through to the autumn 2007, James Gansman, a
lawyer and former partner in E&Y’s transaction advisory
services department in New York, tipped his friend Donna Murdoch
about the identities of at least seven different potential
acquisitions of clients who sought valuation services from his
firm. Gansman resigned from E&Y on 19 October 2007. E&Y
told The Accountant: “The government alleges that Mr
Gansman misappropriated confidential information from Ernst &
Young about our clients. We have co-operated fully with the
government throughout its investigation.”
• Jeffrey Thomson was officially appointed as the new president
and chief executive of the US-based Institute of Management
Accountants at the Institute’s annual conference. Thomson,
who was previously the vice-president responsible for research and
applications development, has been acting in the position since
former leader Paul Sharman resigned in April this year.
