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April 30, 2008

Region round-up

• The Chinese Institute of Certified Public Accountants (CICPA) and the Institute of Chartered Accountants of Scotland (ICAS) have signed a memorandum of understanding…

KPMG United Arab Emirates has launched a Japanese Desk in what it calls a proactive initiative to help Japanese companies already operating in the UAE…

PricewaterhouseCoopers UK (PwC) has appointed Andrew Kail as head of its insurance group…

• The American Institute of Certified Public Accountants (AICPA) has welcomed efforts by the US Financial Accounting Standards Board (FASB) to simplify US GAAP…

Asia Pacific

• The Chinese Institute of Certified Public Accountants (CICPA) and the Institute of Chartered Accountants of Scotland (ICAS) have signed a memorandum of understanding to develop the profession in the UK and China. The two accounting bodies will co-operate in research and development, the education of accountants and auditors, staff and technical exchanges, internships, joint conferences and developing links with UK and Chinese universities. CICPA president Liu Zhongli said developing international co-operation with overseas accounting bodies was among the major initiatives and strategies for the Chinese institute. He said the new agreement would greatly help to promote CICPA’s international development.

• The Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority, and the Singapore Exchange have established the Audit Committee Guidance Committee (ACGC). The new body will develop practical guidance for audit committees to strengthen corporate governance practices of listed companies in Singapore. The ACGC will be chaired by Bobby Chin Yoke Choong. ACGC members will be drawn from the business community as well as stakeholder groups such as the Institute of Certified Public Accountants of Singapore, the Law Society of Singapore, the Singapore Association of the Institute of Chartered Secretaries and Administrators, and the Singapore Institute of Directors.

• Foreign companies operating in China are to pay more corporate tax as part of reforms aimed at levelling the playing field between domestic and overseas companies. The Chinese Government is to introduce a new 25 percent corporate tax rate for both international and domestic companies. Previously, domestic rates were 33 percent while many overseas companies paid 15 percent or less, or were granted tax holidays. Grant Thornton UK China Group head Stephen Weatherseed said the tax package also encourages hi-tech and environmentally friendly industries through lower 15 percent rates and other incentives.

• The Chinese Institute of Certified Public Accountants (CICPA) and the Institute of Chartered Accountants in England and Wales (ICAEW) are to award credits towards each other’s examinations for students who pass subjects in their own qualification. This is the first agreement of its type between the CICPA and a professional accountancy body outside China, the ICAEW said. Under the agreement, members of the CICPA who have passed all five subjects of the CPA Uniform Exams will be awarded credits in the professional stage of the ICAEW’s ACA qualification. They will also be awarded credits at the application level if they pass subjects including audit and assurance, financial accounting and taxation. Members of the ICAEW who have passed the ACA examinations will be awarded credit in the CICPA’s examinations in auditing, financial management and cost management modules.

• Japanese firm Ernst & Young ShinNihon (E&Y) has completed the inward transfer of 1,065 employees from former PricewaterhouseCoopers Global (PwC) Japanese member firm Misuzu Audit Corporation. Misuzu announced a wind-down of operations and split from PwC last year following accounting scandals. E&Y said the new staff have undergone intensive training in auditing techniques and tools since early July to enable them to quickly adapt.

Africa, Middle East, South asiaKPMG United Arab Emirates has launched a Japanese Desk in what it calls a proactive initiative to help Japanese companies already operating in the UAE and those considering investing in the region. According to KPMG, bilateral trade between Japan and the UAE is growing at almost 5 percent annually. The Big Four firm said a recent report revealed Japan-UAE bilateral trade for the first six months of 2007 stood at almost $19 billion. The new desk will offer services related to Japan’s Financial Instruments and Exchange Law, new business set-up support services, feasibility studies, transaction support and Islamic financial advisory services. Akira Moriwaki, the head of Japanese desk, commented: “The spectacular increase in Japanese exports to the UAE highlights the rapid economic growth within the [Gulf Cooperation Council] region.”

Arab Society for Certified Accountants chair Talal Abu-Ghazaleh has called for a preliminary meeting next month at the World Trade Organization headquarters in Geneva, to officially announce the launch of the Arab Coalition for Bilateral Trade. “The coalition will support the role of the services sector in bilateral trade and national economies of the Arab countries. This preliminary meeting will determine the specifics of establishing such a coalition; its administration and headquarters as a regional and private Arab foundation,” Abu-Ghazaleh said.

• The National Board of Accountants and Auditors Tanzania is holding a seminar on ‘audit – security, IT and governance’ on 2 February in the Southern Highlands city of Morogoro. The seminar is targeted at auditors, accountants, audit committee members, directors, heads of accounting institutions and students. Topics for discussion will include auditing and risk management, effectiveness and challenges of audit committees in Tanzania, the continuing impact of the Sarbanes Oxley Act on organisations, auditing in promoting good governance and techniques for dealing with latest IT-audit related issues.

• The Institute of Chartered Accountants of Nigeria (ICAN) is holding its second annual Western Districts conference in Lagos from 11-14 February. The theme of the conference is ‘Corporate Governance Re-Engineering: The Challenges to the Accounting Profession’. The conference will involve two plenary sessions to address the issues and challenges related to social responsibility and corporate governance, and the role of chartered accountants regarding ethics and integrity.

• The Institute of Chartered Accountants of Pakistan is seeking applicants from among its final level accounting students for a student exchange programme with the Institute of Chartered Accountants of Sri Lanka and the Institute of Chartered Accountants of Nepal. The exchange is part of the South Asian Federation of Accountants’ student exchange programme.

Europe • Anthony Kirby has joined Ernst & Young UK as a director in its regulatory and risk management practice. He was previously employed at consulting, technology and outsourcing company Accenture, and is one of 44 new people to join the practice in the past six months. At Ernst & Young, Kirby will be responsible for building marketing capabilities and assets within the regulatory and risk management practice under the broad theme of convergence.

• The sixth annual Grant Thornton UK Corporate Governance Review found the number of FTSE 350 companies aspiring to full compliance with the Combined Code on Corporate Governance has reached 41 percent – up from 34 percent in 2006. The report also found that corporate responsibility reporting is moving into the mainstream. In 2006, just 8 percent of companies saw value in obtaining some form of external validation. That figure now stands at 42 percent. Grant Thornton’s review assessed 306 FTSE 350 companies.

PricewaterhouseCoopers UK (PwC) has appointed Andrew Kail as head of its insurance group. He replaces Clare Thompson who is now the head of the firm’s expanding financial services risk advisory services group. PwC financial services leader Chris Jones said: “The insurance sector is changing faster than at any time in its history and we must ensure that our approaches to helping our insurance clients are effective and that they reflect the position of a market leader. Andrew has extensive experience of the insurance sector and is well placed to deliver this strategy for our clients.”

Ernst & Young UK has admitted four new partners to its tax practice. Employer services partner Graham Farquhar, VAT indirect tax partner Kevin MacAuley and real estate partner Matt Maltz are based in London. Human capital partner Giles Capon is from the Bristol office. Commenting on the admissions, the firm’s head of tax, Paul Davies, said: “It is always a pleasure to recognise and reward the achievements of individuals. As a firm, we have great confidence in our people and their ability to offer our clients deep sector knowledge and expertise while providing a high quality service.”

Smith & Williamson, a Nexia International UK member firm, has promoted Natasha Lee to director within its assurance and business services department. The firm said Lee provides audit and assurance services to a range of corporate clients, specialising in the financial services sector, property and media-related businesses. Her other areas of expertise include assisting companies in their transition from UK GAAP to International Financial Reporting Standards and due diligence investigations on acquisitions.

• The Association of Chartered Certified Accountants (ACCA) Ireland has appointed Kevin Kernan as its new head. Kernan joins the institute from Engineers Ireland, where he was director general. On his appointment, Kernan said: “I am delighted to be joining ACCA Ireland at a time when the membership and reputation is growing in this country. I look forward to engaging with all ACCA Ireland members, affiliates and students to enhance the services we provide for them and ensure their needs and expectations are reflected in our strategies.”

North America, Latin AmericaAlvarez & Marsal (A&M) has appointed Dan Powell as managing director at the firm’s New York office. Powell joined from US consulting firm McKinsey & Company and brings more than 25 years of experience as an operating general manager, mergers and acquisitions specialist, and senior strategist for high-growth and established businesses. He has served as a chief executive and an adviser to boards of directors and private equity partners of companies in operating and financial turnaround situations. A&M New York Turnaround and Restructuring practice head Joe Bondi commented: “Dan has a proven track record for leading operational restructurings, both as an advisor and in interim management roles.”

• The Institute of Management Accountants (IMA) has created a small business financial and regulatory affairs committee. The 13 member committee will address business issues unique to small companies. It will advocate for small businesses on the development of standards, interpretations and pending legislation proposed by US and international organisations. IMA president and chief executive Paul Sharman said the institute created the committee to help support small businesses in their financial reporting and operations. “By addressing certain financial reporting issues early in the process, we hope the committee will help small businesses by minimising compliance burdens and rejecting one-size-fits-all regulation,” he said.

• US professional services firm Wegner has announced the appointment of Katy Mering as a new partner. Mering joined Wegner in 1997 after working at Fishkin Horman & Associates for nine years before the two firms merged. Mering has significant experience with individual and small business tax compliance and planning. She also specialises in providing financial and tax planning services.

• The American Institute of Certified Public Accountants (AICPA) has welcomed efforts by the US Financial Accounting Standards Board (FASB) to simplify US GAAP as part of its codification project. AICPA president and chief executive Barry Melancon commented: “For a long time, many users have said that GAAP is confusing. The codification represents a simplification of the enormous body of accounting standards. It renders GAAP more understandable and accessible for research.” FASB’s Accounting Standards Codification project involves organising thousands of pronouncements into a single and easily accessible source. This week, FASB launched the verification phase of the project in which constituents are encouraged to trial and provide feedback on the system.

• US Securities and Exchange Commission chair Christopher Cox told an American Institute of Certified Public Accountants conference “IFRS is coming, XBRL [eXtensible Business Reporting Language] is coming and mutual recognition is coming”. Cox said XBRL is on the threshold of becoming the universal language of business information and will “do for information sharing what IFRS will do for financial reporting”.

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