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April 30, 2008

News Briefs

RSM joins top five in Italy…IFAC to strengthen independence requirements…IOSCO releases subprime report…Grant Thornton gains audit clients…

MERGERS & ACQUISITIONS RSM joins top five in Italy

RSM International has become the largest accountancy network outside the Big Four in Italy. The mid-tier group has admitted one of the country’s largest audit firms, H-Audit, and a network of tax consultancies, Synergia Consulting Group. RSM now has a workforce of 356 staff and a combined fee income of €32.8 million ($50.9 million) in Italy. According to a recent International Accounting Bulletin survey of the Italian profession, this would place RSM Italy as the fifth largest Commissione Nazionale per le Società e la Borsa-licensed accountancy group, just above Mazars (€28.1 million) but well below the smallest of the Big Four Deloitte (€171.4 million).

PEOPLE FASB unveils staff changes

The US Financial Accounting Standards Board has announced several leadership changes. Russ Golden has become the technical director with overall responsibility for staff work on all standards-level projects. Ron Lott has assumed the newly-created role of research director and will be responsible for the conceptual framework project and for research activities. Sue Bielstein is now the director of planning and support.

REGULATION IFAC to strengthen independence requirements

The International Ethics Standards Board for Accountants, a subsidiary of the International Federation of Accountants (IFAC), has issued a re-exposure draft of proposals to strengthen two areas of the independence requirements contained in the IFAC Code of Ethics for Professional Accountants. The proposals relate to the provision of internal audit services to a public interest audit client and the safeguards that are required when the fees from a public interest audit client exceed 15 percent of a firm’s fee income.

STANDARDS IASB forms fair value panel

The International Accounting Standards Board has established an expert advisory panel to discuss the valuation of financial instruments and fair value measurement. The panel has been formed in response to Financial Stability Forum recommendations that the standard setter improve accounting and disclosure standards for off-balance sheet vehicles and improve guidance and disclosures about valuations, methodologies and uncertainty associated with valuations.

REGULATION IOSCO releases subprime report

A report that tackles underlying causes of the subprime crisis has been released. The International Organization of Securities Commissions (IOSCO) Technical Committee’s Task Force on the Subprime Crisis recommended further investigation on whether additional guidance and disclosures relating to off-balance sheet entities would be valuable in meeting the needs of investors. The task force also urged standing committees on market intermediaries and investment management to explore whether registered intermediaries and investment advisers are using practitioners capable of modelling fair valuation adequately in illiquid market conditions.

STANDARDS IASB and FASB push ahead on conceptual framework

International and US standard setters are seeking feedback on the first two phases of a project to establish a conceptual framework. The framework will be used to develop a single set of international standards. The first document published for comment is an exposure draft of the first two chapters of the framework and seeks views on an improved objective of financial reporting, the qualitative characteristics of information provided by financial reporting and constraints on the provision of that information. The second document sets out the preliminary views of the International Accounting Standards Board and the Financial Accounting Standards Board on the reporting entity concept and related issues. Comments are invited on both documents by 29 September 2008.

AUDIT Grant Thornton gains audit clients

Grant Thornton UK is closing in on its Big Four rivals, according to newly released rankings. The Hemscott quarterly adviser rankings guide showed that KPMG continued to audit the most listed companies, gaining five new clients and taking it to a total of 412. Further down the table, fifth-placed Grant Thornton exceeded the 300-client mark with a net gain of 16, taking the firm to 315 clients overall and only five short of Ernst & Young. The Big Four all retained their strong hold over FTSE 100 rankings. At the top of the rankings, PricewaterhouseCoopers (PwC) gained a single client, taking it to an overall tally of 40; 15 ahead of its closest challenger KPMG. Grant Thornton extended its hold on the audits of AIM-listed companies with 230 clients.

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