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April 29, 2009

Region Round-up


• Deloitte Australia has appointed Cindy Hook as the new leader of its New South Wales (NSW) assurance and advisory practice. Hook previously worked as a senior audit partner at Deloitte US and brings more than 20 years of professional experience, specialising in the life sciences and health care sector.

She will focus on growing the firm’s NSW client base of large listed companies, act as a mentor to new partners and drive Deloitte’s Inspiring Women programme.

Deloitte assurance and advisory national leader Rob Smith said the firm recognises that equal opportunity for women and cultural diversity are critical to its ability to attract and retain talent.

“Having an experienced female partner like Cindy leading our largest audit practice provides a great role model for women across the firm,” he said.

• KPMG Australia and Macquarie Bank joined forces to create a full-scale carbon trading simulation under the proposed Carbon Pollution Reduction Scheme (CPRS). The simulation is designed to test drive clients’ emissions trading strategies and assess their skills, knowledge and business readiness in order to participate in the scheme.

“With the CPRS set to go live in less than two years and a potential first permit auction in early 2010, business can’t afford to be sitting on its hands,” said Jennifer Westacott, KPMG head of climate change, sustainability and water. “Emissions trading is a new discipline for most Australian organisations and the simulation gives them the opportunity for hands on learning in the mechanics without the financial, reputation and compliance risks of the real deal.”

• Ernst & Young China (E&Y) has asked its staff to take low-pay leave in a bid to save operating costs amid the economic downturn, according to media reports. The initiative will encourage E&Y staff to take 40 days of low-pay leave between July 2009 and June 2010. Those who agree to participate in the programme will get 20 percent of their usual salary while retaining all of the benefits of a full-time employee.

• The Deloitte Malaysia corporate advisory services practice is the first professional services firm to become an observer member of the Islamic Financial Services Board. Seven other observer members were also admitted, including Etiqa Takaful Berhad (Malaysia), Maybank Islamic Berhad (Malaysia), Barwa Bank (Qatar), Woori Investment and Securities (South Korea), Islamic Insurance Company (Sudan), Al Hilal Takaful Company (United Arab Emirates) and Moody’s Middle East Limited (United Arab Emirates).

North America, Latin America

• JHI member firm Marks Paneth and Shron recently merged with Montalto CPA, an accounting firm based in Westchester, New York. Montalto CPA provides tax preparation and compliance, as well as family office and business management services to more than 350 businesses. Partner Anthony Montalto, senior tax manager Lucille Murray and four support staff will join Marks Paneth and Shron in its Tarrytown, New York office.

• Jeff Szafron has been appointed as a managing director in the Alvarez and Marsel (A&M) dispute and forensic services team in Boston.

Szafron will focus on internal investigations and forensic accounting disputes. He was previously a managing director with the accounting and financial consulting practice of Huron Consulting Group and also worked for the audit practice and the disputes consulting practice of Arthur Andersen.

“Jeff has led numerous internal investigations of public registrants into complex accounting and financial reporting issues and is a great addition to our team,” A&M dispute analysis and forensics services head Bill Abington said.

• PricewaterhouseCoopers US predicts even greater internal audit budget constraints in 2009 due to the economic downturn, according to a recent study. The study, State of the internal audit profession, found that budget reductions had doubled compared to the same study last year, with more than a third of participants (36 percent) expecting their budgets to decrease in 2009 and 49 percent predicting they would remain flat.

Only 13 percent of respondents indicated that their departments allocated at least 25 percent of resources to strategic and business risks, while the majority (57 percent) assigned this to more traditional financial risk. The survey was conducted in the fourth quarter of 2008 with 700 internal auditors participating.

• CPA Associates International has expanded in the US state of Louisiana with the admission of Ericksen, Krentel & LaPorte. The New Orleans-based firm has eight partners and 42 staff.

“We are very pleased to have added a second outstanding firm in the state of Louisiana during the past year,” CPA Associates International president Jim Flynn said. CPA Associates International is an international association with 148 member firms in 72 countries.

• The criminal investigation into Madoff accountant David Friehling has been extended by a month until an indictment, further charges, or a plea has been made. Last month, the US Securities and Exchange Commission sought charges against certified public accountant Friehling and his firm, Friehling & Horowitz CPAs. The regulator alleged that from 1991 to 2008 Friehling falsely claimed to audit financial statements and disclosures of Bernard L Madoff Investment Securities. Reports said Friehling and his lawyer consented to the extension and investigators have until 17 May to file further charges against Friehling. He could also be indicted by a grand jury or agree to plead guilty to certain charges.

• Martin Baumann is the new chief auditor and director of professional standards at the Public Company Accounting Oversight Board (PCAOB).

Baumann replaces Thomas Ray, who left the board in early March to return to the private sector. Deputy director Jennifer Rand has been acting in the position.

Baumann joined the PCAOB in 2006 as director of research and analysis.

He previously worked at Pricewaterhouse-Coopers for 33 years, serving as deputy chairman of the global financial services practice, global banking leader and audit partner-in-charge of some of the Big Four firm’s largest clients.


• Alvarez & Marsal Germany has appointed Nedim Cen as managing director and co-head of the firm’s restructuring practice. Cen previously worked as part of the Goldman Sachs strategic advisory team and also served as engagement manager at McKinsey & Company.

• KPMG UK has set up a data analytics platform in its forensic advisory business to help organisations reduce commercial risk and gain a competitive advantage.

KMPG said the new software will allow fast analysis of computer-based data to help clients better understand their businesses, reduce commercial risks and maximise profits.

• PricewaterhouseCoopers UK (PwC) has hailed the European Parliament’s adoption of the Solvency II directive as another major milestone on the path to new insurance regulations. PwC UK partner Mark Batten believes any doubts about the 2012 deadline have been dispelled and implementation is well on track.

“There is still a good deal of work remaining, including another QIS exercise, probably next year. But the good news is we now have a clear framework and a clear path to the finishing line,” he said.

• Going concern and related audit considerations dominated a recent Forum of Firms symposium in London.

The symposium featured panel discussions on topics including clients’ access to funding, and financial statement and audit report implications related to going concern. Audit considerations such as valuation and impairment, materiality, and internal control implications were also debated.

The symposium was attended by more than 70 partners and senior executives from 24 international accounting networks.

Forum of Firms chairman David Maxwell said: “[The symposium] brings together the forum membership in a unique manner to hear and openly exchange views, including hearing the latest developments from the International Auditing and Assurance Standards Board.”

Also at the meeting, it was revealed that Baker Tilly International will leave the forum in December (see International Accounting Bulletin 445).

• Deloitte UK has appointed Nick Robinson as a director of its reorganisation services team. Robinson is a former restructuring and distressed funds attorney of offshore law firm Walkers. He specialises in corporate restructuring and cross-border insolvency, and has experience advising clients in distressed fund situations.

Nick Dargan, partner and head of UK reorganisation services, commented: “His experience in advising many of the largest distressed funds of recent years will prove invaluable, particularly during these difficult times, and will help to ensure that we continue to offer first class services to our clients.”

• UK Alternative Investment Market (AIM) and PLUS-quoted companies with a turnover of £50 million ($80 million) will be regarded as major audits when the Professional Oversight Board conducts its 2009 audit inspections.

The watchdog said it reduced the market capitalisation threshold from £100 million to £50 million due to the significant reduction in the overall market capitalisation of these companies during the past year. Grant Thornton UK audits the most AIM-listed companies.

Africa, Middle East, South Asia

• The Satyam Computer Services board has selected Tech Mahindra subsidiary Venturbay Consultants to acquire a controlling stake in the company.

An accounting fraud totalling more than $1.44 billion was revealed at Satyam in January this year and the Indian IT company has been searching for an investor to purchase a 51 percent stake since 9 March.

The Satyam board said Tech Mahindra, an India-based IT and telecoms company, was the highest bidder. The sale is subject to approval from India’s Company Law Board. Indian firm Price Waterhouse was the auditor of Satyam at the time of the fraud.

• The Institute of Chartered Accountants of India (ICAI) has chosen 1,240 audit firms for a peer review in the wake of the Satyam scandal.

The Securities and Exchange Board of India (SEBI) recommended that all listed companies be audited by firms or auditors that have been issued a peer review certificate by the ICAI peer review board.

The institute previously peer-reviewed 4,000 firms and is said to be fast-tracking the next group.

In addition, the accounting regulator has formulated a framework for corporate affairs standards. The framework will be used to develop a benchmark, concepts, principles, practices and procedures in relation to the standards.

An ICAI committee has already drafted a corporate affairs standard on business valuation and auditors’ appointment, among others.

The institute hopes the standards will ensure Indian corporate governance is benchmarked with global best practices.

• The South African Institute of Chartered Accountants (SAICA) has become a certified training partner of the Global Reporting Initiative (GRI).

GRI guidelines are the most popular framework for sustainability reporting. SAICA is currently organising training courses based on the GRI process.

• The Chartered Institute of Management Accountants (CIMA) has opened an office in Karachi, Pakistan, in response to the increasing demand for international finance professionals throughout the region.

CIMA director Andrew Harding said the average GDP growth in Pakistan is 6-8 percent and the country is an exciting emerging market that is attracting multinationals from around the globe.

“Our new office in Karachi will allow us to offer even greater support to our existing members and students and to create opportunities for the talented young people of Pakistan,” he said.

• The Arab Society of Certified Accountants has signed an agreement with the Development Institute for Science & Computer in Dubai to train certified accountants.

The courses will qualify accountants under the Arab Certified Professional Accountant curriculum and also offer training in accordance with international accounting and auditing standards.



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