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December 14, 2008

Region round-up

• The Institute of Chartered Accountants of Australia has appointed Yasser El-Ansary as tax counsel starting in January 2009.

• The Japanese Financial Services Agency has translated the Certified Public Accountants Act into English.

• The Independent Regulatory Board of Auditors (IRBA) of South Africa has appointed Bernard Agulhas as its new chief executive.

Deloitte Sweden chair Svante Forsberg has become the new chairman of Swedish professional body FAR SRS.

Asia-Pacific Asia Pacific • The Institute of Chartered Accountants of Australia has appointed Yasser El-Ansary as tax counsel starting in January 2009.

El-Ansary will take the lead role in furthering the institute's long-term relationships across all levels of government and the tax profession. El-Ansary has 14 years of experience in business and taxation advisory roles.

He is currently group tax manager for Australand Holdings and previously worked at PricewaterhouseCoopers and Rio Tinto.

• Forensic accountants giving or preparing evidence in legal proceedings in Australia will be subject to updated provisions under a revised professional standard issued by the country’s Accounting Professional & Ethical Standards Board.

Requirements for the role of expert witness will be mandatory and, for the first time, the standard will apply to accountants working in the corporate sector and in government, as well as those in accountancy firms.

The standard, APES 215 Forensic Accounting Services, will replace APS 11 Statement of Forensic Accounting Standards and GN 2 Forensic Accounting. APES 215 is effective from 1 July 2009, with early adoption permitted. It will be enforced by the three Australian professional accounting bodies.

• The Japanese Financial Services Agency has translated the Certified Public Accountants Act into English. The translations are unofficial and are to be used solely as reference material to aid in the understanding of Japanese laws and regulations. Only the original Japanese text of laws and regulations have legal effect.

• The Australia securities regulator has issued guidance on going concern, determining fair value, impairment of assets, off balance sheet arrangements and new financial instrument disclosures.

The guidance incorporates specific issues identified through the Australian Securities and Investment Commission’s review of 30 June 2008 financial reports. Entities are expected to use the guidance when preparing their year-end reports.

• A need for changes to the accounting rules for hedging and impairment were among the issues raised in a report the Australian Financial Reporting Council presented at an International Accounting Standards Board (IASB) and US Financial Accounting Standards Board roundtable in Tokyo this month.

The roundtable was the third and final held by the two standard setters to determine what issues are emerging from the global financial crisis and what actions are needed in response.

The key findings of the Australian regulator’s report include that the most pressing need for change relates to the difference between the prudential and accounting models for provisioning of loans held at amortised cost.

Change was also deemed to be needed in terms of the accounting rules for hedging and the measurement and reversal of impairment of available for sale securities.

 Africa, Middle East, South Asia

Africa, Middle East, South East Asia• The Independent Regulatory Board of Auditors (IRBA) of South Africa has appointed Bernard Agulhas as its new chief executive.

Agulhas has been involved in the auditing profession for 23 years, which includes 12 years at an audit firm, two years at the South African Institute of Chartered Accountants and five years at the IRBA itself. He has been acting chief executive of the regulator since June this year.

Agulhas has a vast amount of expertise in auditing, standard-setting, the regulatory environment, communications and international projects in both the private and public sectors.

The appointment will be effective from 1 December 2008.

• The accounting team from Transnet Freight Rail, South Africa, featured among the award winners at the Chartered Institute of Management Accountants (CIMA) 2008 financial management awards.

Transnet won CIMA’s ‘Innovation in Management Accounting Award’ for devising a practical and imaginative activity-based costing model applicable to a complex industry.

The modelling tool provided flexibility so that reports could be generated from any perspective at the click of a button, CIMA said.

The Accounting and Auditing Organization for Islamic Financial Institutions is seeking comment on the revision of Financial Accounting Standard (FAS) No. 23: Consolidation.

The standard currently states the power to control rests with the voting rights over the entity, and a parent should consolidate entities in which it, directly or indirectly through other entities, owns more than 50 percent of the voting rights.

The revision proposes that the standard should not strictly follow the legal form of control but stipulate a comprehensive criterion for identification of control over subsidiaries.

An exposure draft of the revised standard will be circulated to the international Islamic finance industry for comments and submitted to a public hearing scheduled for January 2009.

• Accounting skills shortages in South Africa could become astronomical within the next 10 years if high levels of economic growth are maintained without a drastic improvement in the supply side of the market, according to research commissioned by the South African Institute of Chartered Accountants.

SAICA said the report, The Financial Management, Accounting and Auditing Skills Shortage in South Africa, presents the first definitive research providing a credible measure of the current shortage of accountants and other financial staff, and helps predict what the future shortages are likely to be.

The study said a conservative estimate of the current skills shortage indicates a need for more than 22,000 additional people to fill financial positions in South Africa. It predicted the total number of finance positions is expected to rise from 305,000 in 2007 to between 349,000 and 460,000 in 2018.

Europe

Europe

• The UK Financial Reporting Council has released three documents aimed at helping audit committees and directors assess and plan their 2008 year-end going concern assumptions and disclosures.

The auditing regulator said the global liquidity squeeze and its impact on the wider economy increases the challenges for directors preparing corporate reports this year.

The documents do not impose any new requirements on companies or their auditors.

The FRC has also announced new arrangements for funding its activities relating to accounting, auditing and corporate governance. The council will phase in the new arrangements. For 2009-10, it will apply the preparers' levy to large private companies with a turnover of £1 billion ($1.5 billion) or more. Thereafter, it will apply the levy to large private companies with a turnover of £500 million or more.

Deloitte Sweden chair Svante Forsberg has become the new chairman of Swedish professional body FAR SRS.

The new leadership team also features vice-chairmen Anders Bäckström of KPMG and Christina Westerberg of accounting firm Gävle Dala Revision.

• The UK government’s treasury committee is seeking submissions on the role of auditors in the recent banking crisis and whether any reform to that role is required. The request is part of a wider inquiry to identify lessons that can be learned from the banking crisis. The deadline for submissions is 6 January 2009.

• The EC has released a series of recommendations and good practice guidelines on accounting systems for small enterprises. The guidance follows a project where experts from EU member states analysed accounting systems applied by sole proprietorships/traders and partnerships with unlimited liability to identify how these systems meet the needs of these small enterprises.

• Reporting on sustainability in annual reports needs improvement according to a new survey from the Federation of European Accountants (Fédération des Experts comptables Européens – FEE).

The survey studied the implementation of the amendments to EU Article 46 under the 2003 Modernisation Directive into national legislation and guidance.

The accounting body said the spirit of the Directive meant that transparency on sustainability was no longer just related to voluntary reporting and it should be included, when relevant and necessary for the understanding of the business, in the annual report.

• The European Financial Reporting Advisory Group (EFRAG) has created a new committee to increase its influence on the early stages of the international standard-setting process.

The nine-person planning and resource committee (PRC) was formed as part of a review on how to enhance EFRAG’s governance, organisation structure and operating procedures.

North America, Latin America

Americas

• One of the principal architects of the recently released US IFRS roadmap is to step down from the US Securities Exchange Commission (SEC). As the SEC’s chief accountant, Conrad Hewitt has been responsible for overseeing accounting interpretations, international accounting matters and professional practice issues. He steps down in January 2009.

• The Canadian Accounting Standards Oversight Council has reappointed Doug Hyndman as chair for a two-year term ending on 31 March 2011.

It has also appointed new members to its two subsidiary boards. Jocelyn Patenaude will join the Accounting Standards Board for a three-year term ending March 2012. Nigel Bellchamber will join the Public Sector Accounting Board for a two-year term ending March 2011.

• The US Public Company Accounting Oversight Board (PCAOB) has increased its 2009 budget to $157.6 million, up 9 percent from 2008. The board said the majority of its expenses are associated with hiring and retaining the experienced accountants needed to conduct inspections of registered public accounting firms.

The PCAOB said it expects to employ 531 staff by the end of 2009. Firm registration and inspection personnel currently account for roughly 50 percent of the total.

The budget is subject to approval by the US Securities and Exchange Commission.

• The Canadian Institute of Chartered Accountants is advising companies how to provide better disclosure on the business impacts of climate change to investors.

Building a Better Management Discussion and Analysis (MD&A) Climate Change Disclosures comprises input from institutional investors along with MD&A preparers.

• The US Public Company Accounting Oversight Board (PCAOB) has issued an alert highlighting challenges auditors may face as a result of the current financial crisis when completing their year-end auditing for 2008. The alert addresses overall audit considerations including auditing of fair value measurements, accounting estimates and the adequacy of disclosures. It also includes auditors’ consideration of a company’s ability to continue.

• The US Financial Accounting Standards Board is expected to launch a revised single source of authoritative non-governmental GAAP on 1 July 2009, representing the completion of its codification project. The codification is intended to make US GAAP easier to use. The revision reorganised thousands of GAAP pronouncements into 90 topics.

• Robert Attmore has been appointed chairman of the US Governmental Accounting Standards Board for a second five-year term, starting July 2009.

• The US-based Institute of Management Accountants has refreshed its definition of management accounting following an extensive consultation with accounting associations around the world. The definition states: “Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organisation’s strategy.”

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