Africa, Middle East, South Asia
• Problems still exist with public expenditure in South Africa despite the introduction of the Municipal Finance Management Act and the Public Finance Management Act, according to Ernst & Young South Africa. The Big Four firm said the laws were being undermined by corruption and financial mismanagement and that this had serious consequences for service delivery. The problems included unauthorised employee expenditure, unfair tender issues and unauthorised debt.
• Paying tax in the Maldives requires the least amount of preparation of any country, according to a report from Pricewaterhouse-Coopers. The remainder of the top ten was made up of Singapore, Hong Kong, United Arab Emirates, Oman, Ireland, Saudi Arabia, Kuwait, New Zealand and Kiribati. The ten economies where it was most time-consuming were Panama, Jamaica, Mauritania, Bolivia, the Gambia, Venezuela, the Central African Republic, the Republic of Congo, Ukraine and Belarus. The report found that globally, on average, a company spends almost two months a year complying with tax regulations – 15 days for corporate income taxes. However, there are wide variations between countries.
• The Indian Supreme Court has determined Accounting Standard (AS) 22 – Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India (ICAI), is within the power of the provisions of India’s Companies Act of 1956 and valid. When the ICAI issued AS 22 in 2001, it was challenged by a number of companies on the grounds that it overrode provisions in the Companies Act.
• The South African Institute of Chartered Accountants (SAICA) has appointed a new project director for tax. Muneer Hassan, a tax and auditing specialist, has become SAICA’s tax director. He will advise SAICA members on tax issues that affect accountancy. Before joining SAICA, Hassan was audit manager and tax technical advisor at the South African Revenue Services (SARS). Hassan said he hoped to cement SAICA’s relationship with SARS and assess how SAICA can influence certain aspects of South African tax laws to ensure that they are on par with international standards.
• The Institute of Cost and Management Accountants of Bangladesh (ICMAB) has requested help to deal with the effects of Cyclone Sidr. The cyclone hit southwest Bangladesh on 15 November and claimed more than 3,000 lives. ICMAB sees it as part of its social responsibility to help those who have suffered from the cyclone. The institute is asking for interested parties to send contributions, to help the victims of Sidr, to its executive director.
• The South African accountancy profession’s broad-based Black Economic Empowerment (BEE) charter has been signed in Johannesburg. The charter, which has taken four years to develop, aims to help solve the skills shortage in the South African accountancy profession. Since 1976, only 912 black Africans have qualified to become CAs in South Africa. Ignatius Sehoole, chairman of the BEE negotiation charter forum, said: “The skills profile of our population must move towards reflecting the country’s demographics while still meeting growth needs and maintaining standards.”
Asia-Pacific • The Australian Accounting Standards Board (AASB) has issued an interpretation on the Australian petroleum resource rent tax (PRRT). Australian oil and gas companies will now have to account for PRRT as an income tax under accounting standard AASB 112. This is according to AASB interpretation 1003. The interpretation has been issued in response to the diverse accounting policies adopted by Australian oil and gas companies. David Boymal, chairman of the AASB, said there were three main factors that influenced the AASB decision, including creating consistency among the oil and gas companies in order to foster a high-quality financial reporting environment in Australia.
• Deloitte Australia has appointed Nicky Wakefield as a human capital consulting partner. Wakefield has transferred from Deloitte in the US where she was a senior leader in the human capital practice. She has more than ten years of experience and has worked at a number of different companies and firms including Macquarie Bank and Price-waterhouseCoopers. Lisa Barry, national leader of Deloitte’s human capital practice, said: “We are currently experiencing strong growth and having Nicky on board provides a major boost to our ability to serve our clients with a wide range of human capital services.”
• Deloitte Australia has appointed a new head of enterprise risk services. Ron Loborec, a specialist in risk management, will take on the role. Loborec is former head of Enterprise Risk Services in Queensland and current head of Deloitte’s Energy, Infrastructure and Resources industry group. Deloitte CEO Giam Swiegers said: “Mr Loborec is consistently cited in the firm-wide annual review as one of Deloitte’s best mentors, most inspiring leaders and best client serving partners.”
• The Hong Kong Institute of Certified Public Accountants (HKICPA) has said quarterly financial statements should not be introduced for those listed on Hong Kong’s main board. The comments were in response to the Hong Kong Stock Exchange’s consultation paper on the issue. HKICPA vice-president Paul Winklemann said: “Experience in some countries has found that quarterly financial statements have not brought expected benefits such as increased transparency and market efficiency. These statements can create their own problems such as management focus on short-term results and pressure to show positive numbers at every reporting period.”
• The New Zealand Institute of Chartered Accountants (NZICA) is joining the country’s law society in opposing the Electoral Finance Bill. David Pickens, the NZICA’s director of government relations and strategic projects, said: “The institute is deeply concerned that expert advice from the accounting and legal communities has been substantially ignored. Accordingly, we join the New Zealand Law Society in calling for the bill to be dumped. The only way a workable solution will be achieved is for the bill to be dumped and redrafted from scratch. To proceed in the face of such widespread and considered opposition sets a dangerous precedent.”
Europe • Tax reform is moving forward in Russia, according to Ernst & Young’s 2007 survey of taxation issues in Russia. The survey interviewed 58 Russian and international companies operating in Russia. The survey revealed that despite the improvement there is disappointment with tax administration. Also, many respondents were concerned about the authorities’ interpretation and inconsistent application of tax laws. Nearly 84 percent of firms said they had tax disputes with the authorities. Of these, 82 percent were taken to court.
• Nexia International member firm Smith & Williamson has opened an investment management service at its Bristol office in the UK. The new team of 15 employees will join 115 other investment directors at the firm, who currently have £8.9 billion ($18.3 billion) under management. David Cobb, head of investment management at Smith & Williamson, said: “The addition of this new team means we now provide bespoke investment management and advice from five offices, as well as London.”
• UK firm RSM Bentley Jennison has acquired software and consultancy provider Cetis. The firm said it hopes the acquisition will strengthen its risk management business. East Midlands-based Cetis provides e-learning and policy awareness software solutions to the private and public sectors. Adrian Woodcock, managing director of Cetis, said: “I am delighted to be joining a forward thinking and progressive firm of RSM Bentley Jennison’s calibre. The opportunities for Cetis are now immense.”
• Deloitte UK has announced the appointment of Nick Ritblat to its real estate practice. He will take up the role of strategic adviser. Ritblat spent 19 years at UK property investor British Land, 15 of which were as an executive director. He has also been president of the British Property Federation for the past year. He will advise on strategy, originating transactions and advising clients. Deloitte senior partner and chief executive John Connolly said: “Nick has been widely recognised for his superb representation of UK property interests. His broad experience will provide a real competitive edge for our firm in this important sector.”
• A record number of students have passed the Institute of Chartered Accountants in Ireland (ICAI) exam. The Final Admitting Examination was passed by 1,082 out of 1,308. Those who pass their exams are entitled to apply to the ICAI council for admission to the institute. ICAI director of communications and marketing Ronan O’Brien said: “This high pass rate is a tribute not just to ICAI’s high quality intake but to the training contract system operated by ICAI which by offering mentoring and structured support to the student secures higher pass rates than those of other accountancy bodies.”
• A group of tax partners from UK firm Chiltern has joined Alvarez & Marsal (A&M) to launch A&M Taxand UK. Chiltern was part of Taxand, which is a global network of independent tax advisers, until it was acquired by BDO Stoy Hayward recently. The acquisition meant Chiltern was no longer eligible to be part of Taxand. A&M Taxand UK will be led by former Chiltern chief executive David Pert. Managing directors will be Shiv Mahalingham and Kevin Hindley.
North America, Latin America
• Deloitte US has acquired Iditarod Systems, an identity and access management (IAM) consulting firm based in Virginia. Iditarod Systems was formed in 2002 and works within the consumer business, diversified financial services and telecommunications industries. Christopher Lee, national leader of Deloitte’s security and privacy services practice, explained the new skills Deloitte will acquire: “This acquisition helps us scale our service delivery capabilities and enhances our ability to provide our clients with an even more comprehensive range of IAM solutions.”
• Alvarez and Marsal is expanding its dispute analysis and forensic services practice to Boston, US. The new practice will be run by Pauline Booth and Amy Goot, who will be managing director and director respectively. Both Booth and Goot have experience in licence and contract management, compliance and forensic accounting.
• San Antonio, Texas-based Padgett, Stratemann and Co (PS&Co) has merged with Austin-based Sprouse and Anderson US. The firms will unite under the name PS&Co. The expansion will help PS&Co, a member of RSM McGladrey, move into the insurance and technology sectors. Sprouse and Anderson has been working in Austin for more than 45 years. The merger will increase P&SCo’s headcount to 150.
• PricewaterhouseCoopers Canada (PwC) has acquired professional services firm J Walter MacKinnon in a bid to serve the needs of clients in the province of Price Edward Island. The J Walter MacKinnon offices will become the PwC Charlottetown office, which will focus on advisory services, including helping businesses grow.
• A majority of US small public companies expect their compliance costs to increase over the next two years because of reporting and auditing requirements under the Sarbanes-Oxley Act (SOX), according to a US Chamber of Commerce survey. The survey found that nearly two-thirds of respondents expect an increase in costs in 2008 and 2009 due to compliance with SOX Section 404, with 47 percent of those respondents saying they anticipate their costs will exceed $100,000. Fifty-nine percent of all respondents said they do not believe that compliance with the law will lead to fraud detection or prevention. The majority of respondents (79 percent) indicated that an additional delay in the compliance deadline would be helpful to their company.
• Shared service organisations (SSOs) are becoming a more strategic asset, according to a survey conducted by Deloitte US. The study found that reduction of costs and greater efficiency compliance efforts remain predominant reasons to adopt shared services. It also reported that a variety of more tactical advantages, such as improved controls, enhanced process efficiency and greater visibility of data, are seen as increasingly important benefits. The Deloitte study revealed that SSOs are specifically assisting in the drive of Sarbanes-Oxley compliance.