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April 30, 2008

Region round-up

• KPMG Australia has recruited 571 graduates, cadets and co-operative students…

Ernst & Young Slovakia has recruited Tomáš Osuský as the new head of its risk and business advisory services practice…

• The South African Institute of Chartered Accountants has reported a 53 percent overall pass rate in the Financial Management Part II of its qualifying examination…

The US Securities and Exchange Commission (SEC) is to propose amendments aimed at modernising its disclosure requirements for foreign companies…

Asia-PacificKPMG Australia has recruited 571 graduates, cadets and co-operative students at the firm’s national induction. KPMG chief executive Geoff Wilson said this year’s intake is more than a 14 percent increase from last year and is a new record. “The graduate market is incredibly competitive but this is the third year in a row where our graduate numbers have increased significantly,” Wilson said. “The firm has experienced exceptional growth across the board over the past 12 months and that combined with our reputation as an employer of choice means we are able to appeal to the best and brightest graduates.”

• Australian institutes have hit back at media claims that accountants are encouraging clients to pursue self-managed superannuation funds (SMSFs) in order to generate a revenue stream for the profession. The article, published recently in a leading Australian financial newspaper, claimed accountants pushed clients into SMSFs to generate an A$1 billion ($907 million) industry for the profession, despite a recent turndown in the value of funds. In a joint statement, The National Institute of Accountants, CPA Australia and the Institute of Chartered Accountants in Australia said the claims did not accurately represent the role accountants play in establishing SMSFs and the bodies rejected the claim accountants had acted in greed.

WHK Group, an Australian member of Horwath International, has announced half-yearly operating revenue of A$51.5 million ($47.4 million) for the second half of 2007. This is a 33 percent increase on the second half of 2006. The Australian Stock Exchange-listed group made net profit after tax of A$15.8 million for the same period – a 28 percent rise on the second half of 2006. WHK Group is the largest mid-tier accounting firm in Australia. Its fee income for the year ended June 2007 was A$265.1 million.

The Malaysian Institute of Accountants (MIA) and the Companies Commission of Malaysia have signed a memorandum of understanding (MoU) in the hope that they will jointly uphold public interest and promote good corporate governance. The MoU will enable accountants to attend relevant training programmes organised at the commission’s training academy. MIA president Nik Yusoff said: “The education and development opportunities that will be offered as a result of this MoU will also go a long way in contributing towards the enhancement of the nation’s pool of human capital.”

• Australia’s auditor independence framework is operating effectively and no changes are required to the regulatory framework for accounting firms, according to reports released by Australia’s Financial Reporting Council. Firms are also investing enough resources to ensure compliance with independence and quality requirements. However, some small- to medium-sized audit firms reviewed for the first time had not taken a proactive approach to planning and implementing effective policies, systems and processes to ensure compliance with legislative requirements for audit independence.

Africa, Middle East, South Asia • Enhancing the capacity of the profession, establishing convergence with international standards, promoting compliance and greater integration with global imperatives are among the key tasks in the Institute of Chartered Accountants of India’s (ICAI) action plan for 2008. The institute hopes that facilitating and promoting multi-disciplinary and limited liability partnerships, as well as encouraging greater collaboration with professionals and experts will enhance the capacity of the profession. The ICAI also intends to popularise consolidation and merger through success stories, role-models and pilot projects.

• Shri Bhave has taken over as the new chairman of the Securities and Exchange Board of India. Bhave was previously chairman and managing director of India’s National Securities Depository.

Ernst & Young South Africa has labelled the establishment of the Independent Regulatory Board for Auditors (IRBA) a success but warns that a suitable funding model for the body must now be adopted. The IRBA began operations in early 2006 and is responsible for setting auditing standards, disciplinary activities, and setting education requirements of the profession. Recently, two major regulators from other countries have said they wish to evaluate the effectiveness of the IRBA. Mike Bourne, E&Y professional practice director of audit, said it is important the IRBA employs sufficiently talented staff and adopts a transparent funding model.

• The Institute of Chartered Accountants of India has named its new leadership team. The new president is Ved Jain and the new vice president is Uttam Prakash Agarwal.

• Baker Tilly International has announced that its member firm in Jordan has adopted the Baker Tilly name. They will now operate as Baker Tilly Rafidi.

• The International Accounting Standards Committee (IASC) Foundation eXtensible Business Reporting Language team has released for comment an Arabic translation of the complete set of labels for the 2006 IFRS taxonomy. The Arab Society of Certified Accountants assisted the IASC with the translations, which are based on the IFRS Arabic bound volume.

• The South African Institute of Chartered Accountants has reported a 53 percent overall pass rate in the Financial Management Part II of its qualifying examination. The pass rate is a significant improvement on the previous year’s 41 percent pass rate. The pass rate for first-timers increased to 63 percent from 51 percent last year. The percentage of passes among black African candidates improved from 19 percent to 36 percent this year. According to the institute, the majority of candidates are still following training inside public practice as opposed to training outside the profession due to a limited number of training opportunities externally.

• The total tax contribution of large companies in South Africa is substantially more than the corporate tax disclosed in their annual financial statements, according to a PricewaterhouseCoopers South Africa study. For every rand of corporate tax paid by large companies a further 54 cents in other business taxes was also contributed. 

 EuropeErnst & Young Slovakia has recruited Tomáš Osuský as the new head of its risk and business advisory services practice. Osuský joins the firm following 15 years with IBM. He will lead a team that focuses on services including business advisory, IT solutions, risk management, internal controls and project management. Ernst & Young Slovakia managing partner Stan Jakubek said: “We believe that [Osuský’s] expertise in information technologies, as well as in other advisory areas, will help our clients minimise risk and maximise deliverables from their investments in other areas as well.”

Deloitte UK has reported a 22 percent rise in the number of student applications for graduate positions this year. Deloitte, which recruits more than 1,400 graduates and undergraduates to its UK offices each year, normally receives ten applications per vacancy. This year, the firm opened applications three months earlier and nearly 2,400 students have applied with high demand for consulting and corporate finance positions.

• Accounting, payroll systems, human resources and IT systems are four key areas that will be most affected by Slovakia’s adoption of the euro currency, according to a survey of 150 Slovak firms by Ernst & Young Slovakia. Nearly half of respondents have now performed an analysis of euro-adoption. Accounting is the area that respondents believe will be most affected by the adoption of the euro, closely followed by payroll. Slovakia is set to adopt the currency on 1 January 2009.

KPMG has appointed Simon Ranger as a London-based financial services relationship partner to work with key UK and international insurance clients. Ranger joins KPMG from Deloitte UK where he was head of financial services business development and part of Deloitte’s bid advisory team. KPMG’s European financial services head Jeremy Anderson said Ranger brings a wealth of experience in creating strong partnerships with clients.

• Birmingham-based accounting firm Wenham Major is planning to open an office in New York this month. The new office represents part of the firm’s strategy to achieve global coverage. The firm’s executive chairman, John Joyce, said: “Our global markets’ clients are operating in all continents and for us to be a serious contender for this work we can no longer restrict our work to a UK presence.” Wenham Major, a member of the World Tax Service, has offices in Birmingham, Leicester, London and Dubai.

• Norman Murray, the chairman of Scottish-based FTSE 100 oil and gas company Cairn Energy, has been named as the chair of a new working group that will develop a code of best practice governance for UK firms that audit public interest entities. The working group was formed following a recommendation in the October 2007 report from the Financial Reporting Council’s Market Participants Group. The working group will include individuals from firms, investors and listed companies.

North America, Latin America • The Rehmann Group, a US member firm of Baker Tilly International, has hired a new head for its audit department. Rick DiBartolomeo joins the firm after spending 25 years at Deloitte US. His specialities include serving middle market companies in a variety of industries, including manufacturing, real estate and service industries. He has significant experience in assisting companies with initial public offerings, securities, restructurings, and mergers and acquisitions.

• US Leading Edge Alliance firm DeLap White Caldwell & Croy (DWCC) has admitted a new partner, bringing its total number of partners to nine. Douglas Brown joined the firm in 2004 after spending nearly a decade as a senior manager in assurance at PricewaterhouseCoopers US. According to DWCC, Brown has significant experience in managing large audit engagements for publicly and privately held businesses. He has also worked extensively with early stage companies.

Deloitte Canada has appointed its first chief diversity officer. The Big Four firm said the appointment of Jane Allen puts it at the forefront of Canadian businesses that are dedicated to building a more inclusive, fulfilling and safe work environment. Allen said: “We all have parts to play in creating more diverse workplaces in corporate Canada. With predictions of an increasingly limited talent pool, it is of utmost importance that organisations like Deloitte make managing diversity a business imperative.” Allen joined Deloitte’s consulting practice in 1996 and became national leader for the firm’s power and utilities segment in 2004. She will retain this role in addition to her new duties.

Grant Thornton US has reported its revenues grew just over 14 percent to $1.1 billion in the year ended 31 December 2007. Grant Thornton chief executive Edward Nusbaum commented: “Our growth is the direct result of the quality of our people. Our goals are to continue providing outstanding, independent service to clients, and speaking out on issues that are of importance to the profession, our people and investors.”

The US Securities and Exchange Commission (SEC) is to propose amendments aimed at modernising its disclosure requirements for foreign companies, including eliminating paper submissions. Many of the proposed SEC rule changes are designed to reflect developments in technology and respond to the increasing globalisation of the capital markets. SEC chairman Christopher Cox said: “The proposed amendments would bring our foreign company disclosure requirements into the 21st century by eliminating any requirement for paper, and by giving investors instant access to foreign company disclosure documents electronically, in English, on the internet.”

Alvarez & Marsal (A&M) Business Consulting has appointed a new managing director and national practice leader for its financial services industry group. Jeffrey Donaldson, formerly of management and technology consultants BearingPoint, brings 20 years’ experience in operations and technology to the position. He will be responsible for operations of the IT department and other processes that support business outcomes. A&M Business Consulting is a US affiliate of global professional services firm Alvarez & Marsal.

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