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April 30, 2008

Region round-up

The Institute of Certified Public Accountants of Singapore (ICPAS) is encouraging small- and medium-sized CPA firms to merge…

Ernst & Young (E&Y) has strengthened its UK restructuring practice with the appointment of Maurice Moses as partner…

A new bill that could close a legal loophole that helped Bernard Madoff’s audit firm avoid oversight has been put before the US Congress…

Asia-Pacific, Middle East

Deloitte Malaysia has appointed former executive director of Malaysian Accounting Standards Board (MASB) Nordin Zain as a partner in the firm. Zain was a founding member of the MASB, which was established in 1997. In May 2000, he was appointed executive director of the standard setter. Zain is also a founding member of the Asia-Pacific Financial Reporting Advisory Group and sits on the board of the Accounting and Auditing Organisation for Islamic Financial Institutions.

The Institute of Certified Public Accountants of Singapore (ICPAS) is encouraging small- and medium-sized CPA firms to merge. ICPAS said mergers and acquisitions can help firms grow and are the best way for smaller firms to add new services and take advantage of opportunities in the current economic downturn. “There is great potential for our small- and medium-sized practices to grow and expand overseas. Our local CPA firms need to leave their comfort zone, extend their sights beyond Singapore,” ICPAS vice-president Ernest Kan said.

Deloitte Australia is encouraging staff to use networking site Facebook as a tool to recruit new staff, according to media reports. The firm is said to be offering A$4,000 ($2,554) bonuses to employees who successfully help recruit new talent through its referral programme. If staff find someone that fits Deloitte’s culture and talent, refers them for an interview and they are employed, they are entitled to the bonus. The media source also reported that 25 percent of the firm’s 5,000 Australian employees had displayed the Deloitte referral programme on their Facebook profiles.

• The Indonesian Institute of Accountants has formally announced Indonesian GAAP will fully converge with IFRS by 1 January 2012. In November, Indonesian regulators embarked on a programme to promote full IFRS adoption by 2012. The institute began the journey to converge with IFRS in 1994 by adopting the International Accounting Standards Committee’s framework for the preparation and presentation of financial statements as the conceptual framework for Indonesian GAAP. Since then, an increasing number of IAS and IFRS have been adopted in Indonesia with little or no modification.

Deloitte has set up an Islamic finance centre of excellence in Malaysia for the Asia-Pacific region. Deloitte’s Asia-Pacific chief executive Chaly Mah Chee Kheong said: “The concept of a centre of excellence will be a core for people to understand Islamic finance and all the complexities around this product.” Deloitte’s Islamic finance specialist Daud Vicary Abdullah added that many traditionally non-Muslim countries such as Singapore, UK, Japan and Hong Kong have expressed interest in becoming major players in the Islamic finance industry. The hub, based in Kuala Lumpur, will be the network’s third following centres in London and Dubai.

CPA Australia has presented scholarships to leading Vietnamese graduates from Swinburne University’s Master of International Accounting programme. Two full scholarships and four partial scholarships were awarded to students in ceremonies at the university’s Hanoi and Ho Chi Minh City campuses this month. CPA Australia supports professional development in South East Asia and has operated in Vietnam for the past 10 years. Last month, CPA Australia named three honorary members in Malaysia. They are CIMB Group chief executive Nazir Razak, investment holding company AmcorpGroup Berhad executive chairman Azman Hashim and Malaysian Accountant General Mohd Salleh Mahmud.

The Japanese Institute of Certified Public Accountants has published the results of its survey on audit engagements of financial statements. The results, based on the reports submitted by audit firms, include personnel involved, hours spent and audit fees broken down by revenue and industry. The survey covers audits of financial statements from the fiscal years ended between April 2007 and March 2008.

• About 400 Palestinian accountants have registered for a scholarship to take the Arab Certified Public Accountant certificate. The Arab Society for Certified Accountants (ASCA) is offering accountants and accounting graduates from the Gaza Strip the opportunity to qualify at no cost. Talal Abu-Ghazaleh, the ASCA president, is covering all expenses including registration, exams and curricula fees. Abu-Ghazaleh is the chairman of the multi-disciplinary firm Talal Abu-Ghazaleh Organization.

• Richard Petty, a Hong Kong based professor of accounting and finance, has been elected as the new president of CPA Australia. Petty, who is currently the deputy president, succeeds Alex Malley when his term ends in April.

Europe

• Former Ireland Comptroller and Auditor General John Purcell has been appointed as a special investigator to examine the accounting profession’s involvement in the recently nationalised Anglo Irish Bank, including the involvement of auditors Ernst & Young Ireland. Anglo Irish Bank chairman Sean Fitzpatrick and chief executive David Drumm resigned in December after the bank revealed Fitzpatrick had concealed €87 million ($111 million) of loans from the bank. The Irish government subsequently took ownership of Anglo Irish in mid-January to prevent its collapse.

The complaints committee of the Chartered Accountants Regulatory Board appointed Purcell to investigate possible breaches of Institute of Chartered Accountants in Ireland bye-laws and rules of professional conduct by its members. Ernst & Young Ireland issued a statement in January saying all its audits conducted for Anglo Irish Bank shareholders were undertaken in accordance with the appropriate auditing standards.

• Receivers of Stanford International Bank and Stanford Trust Company have identified the amounts invested by clients of these companies. The founder of the companies, R Allen Stanford, is currently under investigation by the US Securities and Exchange Commission for an alleged $8 billion fraud against his companies’ investors. Commenting on recent progress, Vantis Business Recovery partner Nigel Hamilton-Smith said: “We are now commencing the process of communicating with the financial institutions that we have identified as holding assets on behalf of the Bank. We are also seeking co-operation arrangements with the US receiver to further assist in the asset identification work we need to undertake.” Partners Hamilton-Smith, Peter Wastell and a team of recovery specialists from Vantis are currently in Antigua working with the Financial Services Regulatory Commission of Antigua and Barbuda.

Ernst & Young (E&Y) has strengthened its UK restructuring practice with the appointment of Maurice Moses as partner. Moses, who recently worked for Alvarez & Marsal and Alix partners, will focus on E&Y’s mid-market clients. Over the past 18 months, E&Y recruited significantly in restructuring, including David Hargrave, Bob Ward and Lee Watson from a Big Four rival, as well as partner admissions Taylor Dewar, Matthew Evans, Tom Lukic, Angela Swarbrick and Robert Smid. Meanwhile, E&Y’s Spanish firm has appointed Miguel Ángel Beleña to its restructuring practice. Beleña comes from ABN AMRO and has more than 25 years of experience in the service area.

KPMG UK has released a new guide looking at the impact of carbon trading on financial statements. The guide, ‘Accounting for Carbon’, from the firm’s carbon advisory group, examines how a company’s activities in the carbon arena and accounting policies can affect financial results. The paper also provides some insight into the initial views of the International Accounting Standards Board on transactions involving carbon allowances.

• Jo Wright has been appointed business restructuring partner at UK firm BDO Stoy Hayward. Wright has nearly 20 years of experience as a licensed insolvency practitioner and joins the firm from risk consultancy company Kroll. In her new role, she will focus on corporate restructuring, advisory and insolvency.

Deloitte UK has appointed Jerry Gattegno as a multi-state tax services group leader in the firm’s US corporate taxes group in London. Gattegno was previously a partner at Deloitte US and has 35 years of US state tax expertise. In his new role, he will focus on US state and local taxation. Minimising tax risks and navigating through the US state tax system is a key area for UK-based companies with operations in the US, according to Gattegno. “US state and local taxes are representing an increasing portion of a business’ US tax liability. Entities reporting on a GAAP basis have found state tax accounting to be one of the more vexing issues,” he said.

• UK firm MGI Midgley Snelling has appointed Tracey Wickens as audit manager to lead its audit and assurance team. Wickens has 18 years of experience and joins from a top 20 firm. She has been working with clients with turnovers up to £90 million ($124 million). Michelle Vandrey has also joined the UK firm from MGI Melbourne on a secondment for five months.

North America, Latin America • A new bill that could close a legal loophole that helped Bernard Madoff’s audit firm avoid oversight has been put before the US Congress. The bill, proposed by Republican congressman Paul Kanjorski, would give the Public Company Accounting Oversight Board (PCAOB) full authority to inspect, examine and discipline the auditors of all broker-dealers.

“If this legal loophole had not existed, Bernard Madoff’s storefront auditing company would have had to register with the PCAOB. Inspection and examination of Mr Madoff’s accountant by the PCAOB could have identified his Ponzi scheme much earlier,” Kanjorski said.

Madoff directed Bernard L. Madoff Investments Securities, which defrauded investors in a $50 billion Ponzi scheme. The auditors of all broker-dealers must now register with the PCAOB as a result of a decision late last year by the Securities and Exchange Commission. Under current law only the auditors of public broker-dealers are subject to disciplinary action by the PCAOB.

PricewaterhouseCoopers US (PwC) has launched a Facebook application, Carbon Bigfoot by PwC, to promote awareness and understanding of energy use and carbon emissions. The application allows users to calculate their carbon footprints based upon the three primary categories of shelter, commute and devices in a fun and engaging way. A study conducted by PwC found that 83 percent of employees will only trust an organisation if it is environmentally and sociably responsible and the firm recently committed to the task of reducing its own greenhouse gas emissions by 20 percent in the US by 2012. PwC managing director of corporate responsibility Shannon Schuyler said promoting responsible practices that benefit clients, its staff, communities and the environment is at the core of PwC’s corporate responsibility agenda.

Deloitte US has opened a centre for its 500 energy solutions staff in Houston. The centre, which will also operate in Washington, will provide services from technology integration and operational consulting to tax, financial advisory and attest services.

PricewaterhouseCoopers US will provide $700,000 in grants to universities in a bid to prepare accounting students for the adoption of IFRS. Up to 26 universities and colleges in the US will receive a grant to help create an IFRS curriculum in their accounting programmes despite uncertainty as to whether the 2011 adoption roadmap will go ahead.

US Securities and Exchange Commission chairman Mary Schapiro has said she will review the current roadmap before she makes a firm decision on the adoption of IFRS from US GAAP.

The grants are part of a $1 million financial commitment PwC had previously announced to support IFRS education. In addition to the grants, PwC will also provide educational material directly to students and faculties through a suite of online videos and tools.

• Barry Melancon has been reappointed as president and chief executive of the American Institute of Certified Public Accountants (AICPA) for an additional five years. AICPA chairman Ernie Almonte said Melancon’s leadership had strengthened the profession’s voice in public policy debates and fortified its role in business, finance and capital markets.

Melancon was a key proponent of the IFRS roadmap, calling for the US Securities and Exchange Commission to issue a definitive timeframe for the introduction of global accounting standards in the US in June last year.

The AICPA is one of the largest accounting bodies in the world with more than 350,000 CPA members.

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