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July 26, 2009

Region Round-up


CPA Australia past-president Alex Malley has been appointed chief executive of the professional body. He will succeed Geoff Rankin on 12 October 2009.

Malley is currently chief executive of the Urological Society of Australia and New Zealand.

He has had more than 20 years of experience consulting to the private and public sectors and has held senior posts in academia.

He is also the immediate past-president of CPA Australia. His 18 month term ended in March this year.

Current president Richard Petty said Malley’s leadership and relationship building skills were crucial to CPA Australia’s capacity to further enhance its position as a global professional accountancy designation for strategic business leaders.

“Alex Malley’s knowledge and insight of the organisation and its members located in Australia and across the globe position him extremely well to ensure CPA Australia’s continued international relevance and appeal while retaining the highest professional standards and the quality of the CPA designation,” Petty said.

• The Chinese Vice-Minister of Finance, Wang Jun, is to be the first person from outside the UK to receive honorary membership to the Institute of Chartered Accountants in England and Wales (ICAEW).

Wang has contributed to the accountancy profession and to the finance and business world, actively promoting the adoption and implementation of new Chinese Accounting and Auditing Standards, which came into force for listed companies on 1 January 2007, the ICAEW said. He has also been an advocate for the convergence of Chinese and international accounting standards and progress made under his leadership has been recognised both by the International Accounting Standards Board and the European Securities Committee. Wang has also driven the adoption of corporate governance good practice for the largest Chinese enterprises.

Under his tenure, the Ministry of Finance introduced new company legislation, which set out comprehensive internal control requirements due to come into force for large companies on 1 July 2009.

ICAEW president Martin Hagen said Wang has been instrumental in leading reform of the accountancy profession in China.

“The policies he has pursued have introduced transparency and accountability to China’s economy as the country emerges as a world economic power,” Hagen said.

• The Association of Chartered Certified Accountants has awarded its highest number of qualifications in Vietnam. The 70 students who graduated are a record in an academic year. The certificates were handed over in Hanoi and Ho Chi Minh City.


• The US Public Company Accounting Oversight Board has amended its rules to delay the 2009 inspection deadline of 49 registered non-US public accounting firms. The amendment allows the audit watchdog to postpone, for up to three years, the first inspection of any foreign-registered public accounting firm that the board is otherwise required to conduct before the end of 2009 and that is in a jurisdiction in which the board has not conducted an inspection prior to 2009.

The delays will allow inspections to take place co-operatively with the watchdog’s non-US counterparts rather than legal disputes arising from conflicts between foreign laws and PCAOB requirements, the board said.

Financial Accounting Standards Board (FASB) chairman Robert Herz has criticised the politicisation of the US accounting standard setting process and re-emphasised the need for greater transparency in a speech to US journalists. Speaking at the National Press Club in Washington, Herz said while accounting did not cause the crisis and improvement of standards will not end it, the crisis did reveal a number of areas requiring improvement of standards and overall transparency.

• The Bahamas and Eastern Caribbean accounting institutes have signed up to a practice monitoring programme that is intended to significantly improve auditing procedures and quality assurance review systems.

Practitioners and firms will now be monitored to ensure audit reports and audit procedures comply with international standards on auditing and other internationally recognised rules.

The programme is run jointly by the Institute of Chartered Accountants of the Caribbean (ICAC) and the Association of Chartered Certified Accountants. The monitoring visits will be carried out by ACCA.

• The average salaries and average total compensation for management accountants remained steady in 2008, according to a survey by the Institute of Management Accountants (IMA).

Despite the downturn, 71 percent of respondents reported salary increases – only 3 percent less than 2007.

• The FASB has launched a new agenda project to establish an overarching framework to make financial statement disclosures more effective, co-ordinated, and less redundant.

The project was added in response to requests and recommendations received from several constituents including the Investors Technical Advisory Committee and the US Security and Exchange Commission Advisory Committee on Improvements to Financial Reporting, said FASB chairman Robert Herz.

• The US Center for Audit Quality (CAQ) will fund five research projects selected by the centre’s research advisory board. The projects include a study on the collaboration between financial statement auditors and fraud experts in fraud risk assessment and a review and model of auditor judgments in fraud-related planning tasks. They were selected from nearly 50 proposals that addressed issues including audit quality, professional judgment, professional scepticism and the value of the audit.

• One million candidates have now sat the US CPA examination online, according to the American Institute of Certified Public Accountants (AICPA).

AICPA president and chief executive Barry Melancon said reaching the one million exam mark illustrated how the CPA profession has enjoyed unprecedented growth as an attractive career choice.


• The European Financial Reporting Advisory Group (EFRAG) has appointed Pedro Solbes as chairman of its supervisory board. Solbes, who succeeds Göran Tidström, will begin his role immediately. Solbes was nominated by the EC as a public policy member of the EFRAG supervisory board earlier this month. He was the Spanish Minister of Economy and Finance from 2004 to 2009. Prior to that, he was the EC member responsible for economics and financial affairs between 1999 and 2004.

Three additional public policy members will be appointed in September after the completion of the EC nomination process.

• The Federation of European Accountants (Fédération des Experts comptables Européens – FEE) has issued four further policy statements on sustainability and the accounting profession. The policy statements are: Towards a sustainable economy: the contribution of assurance; Embedding sustainability into corporate governance; Carbon emissions information; and Sustainability and the crisis: shaping a sustainable economy.

The federation released four previous policy statements on sustainability and the accounting profession in January this year. More are planned for the future.

• A sample of European companies have swooped on the chance to reclassify their financial instruments, giving their 2008 annual accounts a boost of almost €30 billion but with insufficient fair value disclosure, according a report by the Committee of European Securities Regulators (CESR).

The CESR study selected a sample of 100 European financial companies with total market capitalisation of €503 billion, including 22 in the FTSE Eurotop 100 index.

Almost all banks surveyed took up the reclassification option.

The International Accounting Standards Board permitted the reclassification of some financial instruments in line with IAS 39 and IFRS 7 in October last year following strong political pressure from banks and governments in the UK and Europe. The amendments to IAS 39 introduce the possibility of reclassifications for companies applying IFRS, which were already permitted under US GAAP in rare circumstances.

• The Chartered Institute of Management Accountants (CIMA) has launched an online community network called CIMAsphere. CIMAsphere is a virtual community where practicing and aspiring management accounts and the wider public can share knowledge, advice and expertise. There will be several discussion boards, covering topics ranging from strategic management and economics, to financial reporting and business ethics. A team of in-house experts will also write blogs on the technical, business and policy issues relevant to members.

• The Autorité des Marchés Financiers (AMF) of France has appointed Xavier Tessier as director of international affairs in its regulatory policy and international affairs division. Tessier joined AMF in 2003 when it was founded.

In his new role Tessier will be responsible for the AMF’s international activities, specifically its participation in international and European regulatory bodies, relations with European institutions and bilateral relations with the AMF’s foreign counterparts.


• The Institute of Chartered Accountants of India (ICAI) has signed co-operation agreements with the Certified General Accountants Association of Canada (CGA) and the Bahrain Institute of Banking and Finance (BIBF). The ICAI and CGA aim to share insights into each group’s structure and operation, and regulatory framework, with emphasis on possible co-operation on professional training, education and examination, technical research, as well as representation on international professional bodies.

The accord could pave the way for mutual recognition agreements between the bodies, said CGA Canada president Tony Ducie. The ICAI and BIBF will also look to take advantage of each other’s expertise in designing distance education programmes, designing study materials for students, examination systems, and disciplinary and regulatory mechanisms.

• The ICAI has launched an eXtensible Business Reporting Language (XBRL) website. The ICAI created an XBRL group in 2007 and has since developed the taxonomy for general purpose financial statements for the commercial and industrial sector. The exposure draft of the taxonomy has already been issued and it will shortly be sent for accreditation by XBRL International. Taxonomy for banks is being prepared, and an exposure draft is expected to be issued shortly, the ICAI said.

• The Arab Society of Certified Accountants has published the Arabic version of IFRS 2009. The 2009 edition includes some basic changes made since 2008, including a revised version of IFRS 1, amendments to IFRS issued as separate documents in the first annual improvements project and amendments to IFRS resulting from revised or amended standards.

• The Institute of Chartered Accountants of Pakistan has successfully conducted its first council elections through electronic voting. The e-voting system allowed members who live overseas or in remote areas within Pakistan to vote. It generated a significant increase in voter turnout. The e-voting system was developed in-house and ran 24 hours a day for a week without any glitch, the institute said.

• The Indian securities regulator will take the unusual step of funding a class action in relation to Satyam Computers, its auditor Price Waterhouse and related parties, Indian media has revealed. The Securities and Exchange Board of India (SEBI) will provide financial support towards a class action that has been filed by Midas Touch Investor Association in the Supreme Court.

The Midas lawsuit is seeking compensation for about 300,000 investors of the IT giant, which was implicated in India’s largest fraud earlier this year. The investors collectively hold 90 million shares of Satyam. The Economic Times reports this is the first time SEBI has provided financial assistance to help investors launch a legal challenge.

The newspaper says SEBI will foot about 75 percent of the legal bill. Twenty-three SEBI-registered investor associations have access to this type of SEBI assistance in a country where lawyers charge a flat fee despite the outcome of the case.

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