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April 30, 2008

Region round-up

• The Hong Kong Institute of Certified Public Accountants (HKICPA) has raised more than H$1.5 million ($192,265) to help earthquake victims in Sichuan, China…

PricewaterhouseCoopers (PwC) has launched a new desk to help clients better execute trade and investment opportunities between India, South Africa and the rest of Africa…

• The European Commission (EC) has become a member of the Public Interest Oversight Board (PIOB) nominating committee…

• A consortium to help the US academic community prepare students for the arrival of IFRS is being planned by Deloitte US

Asia-Pacific • Australian consolidator WHK Group has announced it intends the 2008/2009 financial year to be a period of integration and bottom-line improvement following a flurry of acquisitions in the past two years. The Horwath International member said it acquired revenue in excess of A$60 million ($57.7 million) since 1 July 2007, including several smaller transactions presently being assessed. Since mid-2006 the firm has acquired business worth about A$120 million. The Australian Stock Exchange-listed group has 22 stand-alone member firms across Australia and New Zealand.

WHK estimated earnings before interest, tax and amortisation of intangible assets for the group for the year ending 30 June 2008 will be about A$50 million, an increase of 23 percent on the previous year’s A$40.5 million in profits. The estimated profit for the second half of the 2007/2008 financial of A$23.7 million is below the A$26.3 million from the first half.

KPMG Australia has released a sustainability reporting guide aiming to provide directors and senior professionals with a timely tool when addressing this highly-evolving area of reporting. Sustainability Reporting: A Guide will discuss the mainstream trend towards environmental, social and governance reporting and the need for business communities and individual companies to respond to the sustainable development issues that may affect a company’s long-term economic performance.

• The Financial Services Agency (FSA) of Japan has outlined its ongoing efforts to improve Japan’s regulatory environment in its inaugural progress report. The report noted the FSA’s increased discussion with financial institutions, its expanded public profile, including speeches and lectures, and a greater use of English on its website.

The FSA said it strengthened co-operation with foreign authorities and had expanded research functions, including the establishment of a market analysis office in February 2008.

• The Hong Kong Institute of Certified Public Accountants (HKICPA) has raised more than H$1.5 million ($192,265) to help earthquake victims in Sichuan, China. More than 300 members and institute staff donated nearly H$1.2 million, which was topped up to H$1.5 million by the HKICPA Charitable Fund. The institute said contributions will go to the Red Cross to aid its relief efforts in the stricken region. The institute established a daily tally on contributions from its members on its website, along with a list of the members who donated money towards the appeal.

• The actuarial division of Deloitte Australia has renamed its practice. Previously known as Trowbridge Deloitte, it will now be known as Deloitte Actuaries & Consultants. Deloitte Actuaries & Consultants managing partner Andrew Gale said: “The renaming of the business to Actuaries & Consultants is the culmination of an eight year process of building specialist capability. We wanted a name that was clear about who we are and what we do and we wanted to identify more strongly with the Deloitte brand.”

Africa, Middle East, South Asia

PricewaterhouseCoopers (PwC) has launched a new desk to help clients better execute trade and investment opportunities between India, South Africa and the rest of Africa. The India-Africa Desk will assist businesses in identifying opportunities and potential partners as well as help manage commercial uncertainties, tax and the regulatory costs of doing business in both regions. PwC project leader Troopti Naik said India’s emergence as an economic powerhouse has triggered a rise in trade and investment between the two regions. “Indian companies want to come to South Africa as part of their global expansion, especially in sectors such as mining, pharmaceuticals, telecoms and automotive; and South Africa companies are evaluating expansion opportunities in India,” Naik said. The desk was launched in the Johannesburg business district of Sandton.

• The Institute of Chartered Accountants of India (ICAI) is planning to set up a New York chapter in order to provide networking and support to members based in the US. The chapter will become the ICAI’s 20th outside India. At present, the ICAI has chapters in Saudi Arabia, Botswana, Nigeria, Kenya, Papua New Guinea, the United Arab Emirates, Bahrain, Kuwait, Australia, Canada, Indonesia, the UK, Oman and Zambia. Members can attend continuing professional education programmes at chapters, which also act as a bridge between the ICAI and foreign professional bodies.

• The Corporate Laws Committee of the Institute of Chartered Accountants of India is to develop corporate affairs standards that deal with business valuation, investor protection, corporate restructuring and other areas, to guide its members and stakeholders on global best practices. The decision to establish the standards was approved in principle at the institute’s council meeting this month.

• The Dubai Financial Services Authority (DFSA) has signed a memorandum of understanding with the Securities and Exchange Commission of Cyprus. The agreement is intended to enhance information sharing and co-operation between the two organisations as they both regulate Cypriot firm branches and subsidiaries that operate in the Dubai International Financial Centre. DFSA chief executive David Knott said: “As a member of the European Union, Cyprus is an active participant in the work of the Committee of European Securities Regulators, adopting and harmonising international standards in Europe and continuing to establish world class standards in the regulation of capital markets.”

• The Institute of Chartered Accountants of India has approved Accounting Standard 32 – Financial Instruments: Disclosures. The standard requires entities to provide certain disclosures in their financial statements to enable users to evaluate the significance of financial instruments for the entity’s financial position and performance. It also allows users to evaluate the nature and extent of risks arising from financial instruments and how the entity manages those risks.

Europe

• An updated UK report on internal audit has found that while risk and control frameworks have been strengthened, organisations are still not doing enough to identify, manage and control their key risks. Towards a Blueprint for the Profession revealed that many internal auditors believe they could increase the value they provide to organisations by extending their reach into areas such as reputation, technology and projects not just concerned with financial control. Conducted by the Institute of Internal Auditors and Deloitte UK, it also found that only 15 percent of internal auditors said that these areas were part of their remit now but five times as many expected them to be so in 2012.

• The European Commission (EC) has become a member of the Public Interest Oversight Board (PIOB) nominating committee. The PIOB oversees the public interest activities of the International Federation of Accountants such as the setting of international auditing, ethical and education standards for the accounting profession. The committee also announced that eight current PIOB members have been reappointed and two former EC observers appointed as full members of the PIOB.

• The UK Financial Reporting Council (FRC) has confirmed that the ‘true and fair’ concept is still relevant in the preparation and audit of financial statements. The concept has been part of English law for many decades. Martin Moore QC said it still has a place despite the enactment of the UK Companies Act 2006 and the introduction of IFRS. FRC chief executive Paul Boyle said: “The FRC believes that this opinion is an important confirmation that the concept of ‘true and fair’ is a key contributor to the integrity of financial reporting in the UK.”

• The Committee of European Securities Regulators (CESR) has recommended the EC accept Canadian GAAP and South Korean GAAP as equivalent to IFRS in the EU until the end of 2011. The recommendation was issued following a mandate from the EC in March 2008, which requested technical advice on Canadian, Indian and South Korean GAAP. CESR made the recommendation after the announcements by the Canadian Accounting Standards Board, the South Korean Financial Supervisory Commission and the Korea Accounting Institute that both countries would adopt IFRS by 31 December 2011.

• The Association of Chartered Certified Accountants (ACCA) has appointed a new leadership team. Richard Aitken-Davies has been elected as president after serving on the association’s council since 2000. He is also chairman of ACCA’s nominating and financial reporting committees. Brendan Murtagh, a partner in Dublin accounting firm LHM Casy McGrath, has been elected as deputy president; and Mark Gold, a partner at London-based accounting firm Silver Levene, has become vice-president. Francis Chittenden and Pauline Hobson have also been elected to serve on the association’s governing council.

North America, Latin America • A consortium to help the US academic community prepare students for the arrival of IFRS is being planned by Deloitte US. The Big Four firm said it will contribute its experience and resources to address the “urgent need to help bring IFRS curricula into college classrooms”. Through the consortium, Ohio State and Virginia Tech universities will receive assistance in drafting course materials such as classroom guides and case studies, and Deloitte professionals will serve as lecturers. The classroom guides and course materials will be made available to other interested universities.

• The US Securities and Exchange Commission (SEC) has selected Donal Byard, Susan Krische and Roger Martin as academic accounting fellows. Academic accounting fellows serve as research resources for SEC staff by interpreting and communicating research materials as they relate to the SEC. Byard is an associate professor of accounting in the Zicklin School of Business at the City University of New York. Krische is an assistant professor of accountancy at the University of Illinois at Urbana-Champaign. Martin is an associate professor of commerce at the University of Virginia’s McIntire School of Commerce.

• Expectations for the US economy remain negative among senior-level executive CPAs according to a new American Institute of Certified Public Accountants (AICPA) survey. The second quarter survey, conducted by the University of North Carolina, found 57 percent of CPA respondents were pessimistic about the economic outlook for the US over the next 12 months, relatively unchanged from 59 percent who held negative expectations in the first quarter.

KPMG Canada has released its fifth annual social responsibility report, which outlines KPMG’s new environmental objectives and provides details on its social and economic performance. KPMG Foundation chair Marilyn De Mara said: “Corporate social responsibility defines a firm and its culture today. Not only is it our responsibility to give back to our community but also it is clear that these commitments resonate with our employees who really appreciate the opportunity to give back to their neighbourhoods and abroad.”

• Jeannie Patton has been appointed to the American Institute of Certified Public Accountants’ (AICPA) newly created position of vice-president – students, academics and membership. Patton was the winner of the 1999 AICPA distinguished service award and is currently the chief executive of the Utah Association of CPAs. Patton begins her new role at the institute in July and will oversee student recruitment programmes, encourage accounting graduates to pass CPA exams and serve the needs of young CPAs.

• The American Institute of Certified Public Accountants has launched a new website aimed at keeping financial professionals informed about the developments of IFRS. The website IFRS.com includes informational videos, explanatory material about IFRS, training programmes and links to other relative resources.

• Kreston International has admitted Colombia firm RM Auditores. Based in the capital Bogata, RM Auditores has two partners and 60 staff.

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