ASIA-PACIFIC
• The Indonesian Institute of Accountants (IIA)
has issued a standard for Sharia transactions and a standard for
non-publicly accountable entities.
IIA president Ahmadi Hadibroto said that as
the largest Muslim country in the world, Indonesia should set an
example of how to develop high quality Sharia accounting
standards.
The standard for private entities is based on
the draft version of the International Accounting Standards Board’s
IFRS for SMEs. It is effective from 1 January 2011 but early
adoption in 2010 is allowed.
• The Association of Southeast Asian
Nations (ASEAN) Federation of Accountants (AFA) has
encouraged its member bodies to implement IFRS for SMEs. The
federation said small and medium and non-public interest entities
form the backbone of the ASEAN economies.
“The introduction of IFRS for SMEs is a
positive step towards enhancing quality of financial reporting
without placing costly and unnecessary compliance burdens on the
SMEs in the ASEAN region,” AFA president Pengiran Haji Moksin
said.
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By GlobalDataThe AFA includes member bodies from all 10
ASEAN countries: Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.
• CPA Australia has launched
a new CPA programme in Vietnam to celebrate the first anniversary
of its presence in the country. Since launching the Vietnam office
last year, the organisation has gained more than 130 associate and
full members, plus more than 2,000 students.
“As the world emerges from recession,
professionally qualified accountants will be in greater demand than
ever before, as will the demand for accounting firms in Vietnam,”
CPA Australia chief executive Geoff Rankin said.
• The Malaysian Institute of
Accountants (MIA) has elected Abdul Rahim Abdul Hamid as
its sixth president. He succeeds Nik Hasyudeen, who has retired
following the completion of his term. Hamid previously served as
the institute’s president from 2005 to 2007. His professional
career includes more than three decades in public practice,
including a stint as deputy executive chairman at
PricewaterhouseCoopers Malaysia.
Christina Constance Foo has been appointed MIA
vice-president. She is currently a member of the board of directors
of CPA Australia and immediate past president of its Malaysia
division.
• The Institute of Certified Public
Accountants of Singapore (ICPAS) and CPA Australia have
renewed their mutual recognition agreement. Through the
arrangement, ICPAS and CPA Australia agree to reciprocal admission
of appropriately qualified members.
NORTH AMERICA, LATIN AMERICA
• Daniel Goelzer has been appointed acting
chairman of the US Public Company Accounting Oversight
Board (PCAOB). He succeeded Mark Olsen on 1 August.
Goelzer is a founding and current member of PCAOB. He previously
served as general counsel of the Securities and Exchange Commission
(SEC) and has held the offices of executive assistant to the SEC
chairman and associate general counsel in the office of the general
counsel. Earlier in his career, he worked as an auditor at Deloitte
US.
• The CPA mobility law has been passed by 45
jurisdictions across the US as of this month, according to the
American Institute of Certified Public Accountants
(AICPA). The legislation allows CPAs and CPA firms to serve their
clients across state lines with minimal licensing barriers. The
regions that have yet to allow out-of-state CPAs to practice are
California, New York, Massachusetts, Alaska, Hawaii, Virgin
Islands, Washington DC, Guam and Puerto Rico.
• The US Financial Accounting Standard
Board (FASB) has tentatively decided that financial
instruments whose fair value changes are recognised in net income
should be separately presented on the balance sheet from financial
instruments whose fair value changes are recognised in other
comprehensive income. Entities would be required to present the
fair value amount on the balance sheet. Entities could present on
the balance sheet or disclose in the notes the amortised cost
amount and the fair value adjustment amount related to the
instruments in addition to the fair value.
• A former Deloitte US audit partner has been
fined for helping Navistar Financial Corporation, a unit of the
truck manufacturer Navistar International, avoid restating its
erroneous 2003 financial statements. Thomas Linden was ordered by
the PCAOB to pay $75,000 and has been barred from
practice.
• The PCAOB has voted to
adopt Auditing Standard No 7, Engagement Quality Review (EQR) and
is seeking comment on a proposal requiring audit engagement
partners to individually sign off the audit report.
The EQR provides a framework for the
engagement quality reviewer to objectively evaluate the significant
judgments made and related conclusions reached by the engagement
team in forming an overall conclusion.
The audit engagement proposal says any
requirement for audit engagement partners to sign an audit report
would be in addition to the existing requirement for the audit firm
to sign its name on the reports.
• The Canadian Institute of Chartered
Accountants has published a document to help increase
awareness among corporate board members about business impacts and
governance issues associated with climate change. The publication
provides a series of questions corporate directors can ask relating
to the business implications of climate change.
• The PCAOB is seeking
nominations for a new investor advisory group. PCAOB member Steven
Harris will chair the group.
• The FASB and XBRL
US have completed a revision of the eXtensible Business
Reporting Language (XBRL) US GAAP Taxonomy so that it reflects the
FASB Accounting Standards Codification released last month. In
2008, the FASB created an XBRL project team that worked closely
with the XBRL US team to produce the new taxonomy. The project
involved a review of the authoritative references in the current
taxonomy and the team subsequently added the related codification
references. Public companies will now be able to link directly from
the taxonomy extension to the specific codification reference as
posted on FASB’s codification website.
EUROPE
• Claims of Big Four firms approaching rival clients and
offering cheaper audit fees are causing a stir in the Netherlands.
PricewaterhouseCoopers (PwC) claimed in Dutch newspaper
Financieele Dagblad that some of its clients were
approached by Ernst & Young (E&Y) with significantly
reduced quotes for carrying out audit work.
The spat arose partly due to disclosure rules
that came into effect this year and require listed companies to
reveal how much they paid for audit, tax and other advisory work.
E&Y Netherlands country managing partner Pieter Jongstra said
undercutting rival’s audit fees was not an E&Y strategy but
clients had demanded fee reductions of up to 30 percent in some
cases. He added the firm maintains “contact with all major
organisations in the Netherlands”.
• The UK Auditing Practices
Board (APB) has issued a revision of Practice Note 15 (I)
The audit of occupational pension schemes in Ireland for
comment. The current guidance, issued in December 2005, has been
updated due to changes in the regulatory environment for pensions
in Ireland.
• The UK’s second-highest fee earning firm,
Deloitte, has reported a 2 percent drop in annual gross revenue to
£1.97 billion ($3.3 billion) in 2009, an indicator of how badly
firms are being affected by the financial crisis. The drop is the
second by a major firm in consecutive weeks, following major US
mid-tier firm BDO Seidman’s decline of 6 percent to $620 million in
the year to 30 June 2009.
• There is a good standard of corporate
reporting in the UK according to the Financial Reporting
Review Panel’s annual activity report. The report is based
on reviews of reports and accounts prepared for the year ended 31
March 2009. Of the 326 sets of accounts reviewed, 112 companies
were approached by the panel for further information or
explanation. Of these, 68 companies have, to date, undertaken to
reflect the panel’s comments in their future reporting. Two
companies agreed to restate comparative amounts in their next set
of annual financial statements.
• Accountancy is one of several professions
that is becoming more, not less, socially exclusive over time,
according to a recent UK government report into social mobility.
Unleashing Aspiration – The Final Report of the Panel on Fair
Access to the Professions found that a typical professional
born in 1958 came from a family that earned 17 percent more than
the average family income. But for those born in 1970 the family
income gap between those who went on to pursue a professional
career and the average family had risen to 27 percent with
accountancy seeing one of the biggest shifts to more social
exclusivity.
• The Institute of Chartered
Accountants of England and Wales (ICAEW) has awarded
Stephen Zeff honorary membership in recognition of his contribution
to the accounting profession. Zeff is the past president of the
American Accounting Association, member of the European Accounting
Association and a member of the UK Accounting Standards Board’s
academic panel. He has also contributed to the ICAEW’s
international work.
• The ICAEW and the Chamber of
Financial Auditors of Romania (Camera Auditorilor
Financiari din Romania – CAFR) have signed a new Memorandum of
Understanding. The agreement states the two bodies will work
together on activities for students and members, share expertise
and experience on international and EU-related technical matters
and undertake joint initiatives targeting governments and
regulators.
ASIA
• South Africa’s Accounting Practices
Board (APB) has adopted the International Accounting
Standards Board’s (IASB) new IFRS for SMEs, becoming the first
country to do so. All non-publicly accountable entities can use the
new standard immediately.
South Africa took the usual step last year of
adopting IFRS for SMEs in draft form. Previously all entities in
South Africa, regardless of size, were required to use full IFRS.
This presented a huge burden on SMEs. The final IFRS for SMEs was
issued by the IASB on 9 July. The APB decision was reported on the
Deloitte IAS Plus website. The webmaster of IAS Plus is Paul
Pacter, who is also the IASB’s director of standards for SMEs.
• India’s Ministry of Corporate
Affairs has set up a committee to address implementation
challenges related to the convergence of Indian Accounting
Standards with IFRS. Convergence is due by 2011.
The Ministry of Corporate Affairs Secretary,
Anurag Goel, will chair a core group, which will be assisted by two
sub-groups.
The first sub-group will be chaired by
National Advisory Committee on Accounting
Standards chairman YH Malegam. This group has been charged
with identifying changes that must be made to various laws,
regulations and accounting standards to facilitate convergence with
IFRS and to prepare a clear road map for these changes.
The second sub-group will be chaired by
Infosys director Mohandas Pai. It will be comprised of a number of
chief financial officers (CFO) who will interact with stakeholders
to identify concerns related to IFRS convergence, identify problem
areas and establish how prepared stakeholders are for
convergence.
The first meeting of all three groups was held
recently. At the meeting, the Institute of Chartered
Accountants of India reported that the convergence project
is on track for completion.
The CFO sub-group reported there are some
concerns from smaller companies.
They also requested amendments to the
Companies Act and other regulations and asked for early exposure of
accounting standards that are IFRS compliant, to help them to
prepare for meeting the conversion deadline.
• The Jordanian Association of
Certified Public Accountants and the Association
of Chartered Certified Accountants have signed a
Memorandum of Understanding to strengthen co-operation between the
two bodies. The agreement will benefit the exchange of information
between the two organisations, particularly related to the
accounting profession.
The institutes will continue to work together
in areas including research and technical consultancy, quality
control practices, professional development and issues relating to
institutions, small and medium-sized enterprises.
