News from Member Bodies, Affiliates and Regional Accountancy Organisations
1. Adoption of International Standards Endorsed by ICAC
The Board of the Institute of Chartered Accountants of the Caribbean (ICAC) formally endorsed the adoption of international standards by its members as part of an effort to harmonize standards in the region. “Most, if not all, of our member institutes have already adopted international standards, and we believe that the formal adoption of these existing standards by the ICAC Board affirms the profession’s commitment to adhere to international standards and best practices,” said ICAC President Betty Brathwaite.
2. Hong Kong Institute Actively Opposes Proposed Audit Law
Calling it harmful to the profession, the Hong Kong Institute of Certified Public Accountants (the Institute) is working to oppose a newly proposed law that would introduce criminal liability for poor audit work. The Institute successfully lobbied for the exclusion of junior accountants from the scope of the legislation, but is still advocating to change the legislation to only allow for prosecution if an omission is committed “dishonestly or with intent to defraud”—a proposal that has thus far been voted down by the relevant legislative committee. The Institute also argues the new rule would not apply to Hong Kong-listed companies incorporated offshore, which could encourage some companies to move outside of the city’s regulatory scope.
3. SAIPA: SMEs Are Key to Solving Unemployment
In a paper presented to the Clute Institute’s International Academic Conference held in Bangkok, Thailand, the South African Institute of Professional Accountants (SAIPA) argues that small- and medium-sized entities (SMEs) hold the key to solving South Africa’s employment problems. However, the solution does not lie in simply increasing funds for incentives and similar programs. Instead, the paper argues that identifying the needs of entrepreneurs, who frequently lack sufficient knowledge to run a business, and providing appropriate training are more effective methods of improving employment statistics.
4. FEE Releases Discussion Paper on the Audit Committee
The Functioning of Audit Committees, which has been released for comment by the Fédération des Experts Comptables Européens (FEE), makes several recommendations regarding improvements in relation to the establishment, composition, competences, and responsibilities of an audit committee. The paper also includes recommendations regarding reporting to and from the audit committee in order to improve the quality of financial reporting. Responses are requested by
September 28, 2012 and should be emailed to
secretariat@fee.be.
Source:
Fédération des Experts Comptables Européens
5. Path, Future of the Profession Discussed in New Book from ICAA
The Institute of Chartered Accountants in Australia (ICAA) and the Centre for Accounting, Governance, and Sustainability at the University of South Australia have published
Emerging Pathways for the Next Generation of Accountants, the third publication in their Academic Leadership Series. The book covers challenges to the profession in Australia, global qualifications, the finance function, and the future of the profession.
6. Recent Member Body Appointments and Elections
• Dr. Lilia Grigoroi, President, Association of Professional Accountants & Auditors of the Republic of Moldova
• Gulzari Lal Babber, FCMA, CGMA, CMA, President, Chartered Institute of Management Accountants
• Mr. Raphael Ding, Chief Executive and Registrar, Hong Kong Institute of Certified Public Accountants
• Dr. Ernst Kan Yaw Kiong, President, Institute of Certified Public Accountants of Singapore
• Sung-won Kang, President, Korean Institute of Certified Public Accountants
• Atty Josefe Sorrera Ty, President, Philippine Institute of Certified Public Accountants
7. Joint Initiatives Launched Among Professional Accountancy Organizations
• The Association of Chartered Certified Accountants and the Institute of Management Accountants have signed a global partnership that will include “research collaborations, CFO roundtables, joint chapter events, and the explorations of opportunities to increase awareness and adoption of our respective certifications.”
•
The Finance for the Future Awards, a new awards program to promote sustainability in business in the UK, has been established by The Prince’s Accounting for Sustainability Project and the Institute of Chartered Accountants in England and Wales (ICAEW) along with NatWest. The organizations presented awards to the top six financial leaders and teams in various categories and sectors. The awards program was created to “look at sustainability from a finance perspective and to drive a better and more sustainable return for the organisation, its staff, and the community as a whole.” ICAEW also recently launched a series of new videos and website dedicated to encouraging sustainability in business—
Just Good Business.• The Association of Chartered Certified Accountants (ACCA) and the Malta Institute of Accountants signed an extension to their existing Joint Examination Scheme (JES) to incorporate the ACCA’s Foundations in Accountancy awards. The organizations also renewed the ACCA Qualification Professional Level JES.
• CPA Australia and the Institute of Chartered Accountants in Australia have joined together to applaud the new conditional licensing regulations as a means of giving more Australians access to financial advice. According to the two organizations, the proposed policy framework will “allow professional accountants to have a comprehensive financial strategy discussion with their clients.”
News from Government, Regulatory Bodies and Other International Organisations
1. ISA Adoption in Russia Moving Forward
The Ministry of Finance in Russia has published on its website a draft federal law on auditing—“On Introducing Amendments into the Federal Law ‘On Auditing Activity’” (the 307 Audit Law), which proposes the adoption of International Standards on Auditing (ISAs) as the national auditing standards. The draft amendments were exposed for consultation in June 2012, and are now under consideration by the Russian legislative system and comments received are being analyzed and reviewed. Although next steps have not been announced, this move is indicative that ISAs will be adopted in Russia, likely becoming effective one year after being officially adopted.
2. Integrated Reporting Framework Draft Outline Released
The International Integrated Reporting Council (IIRC) has released its Draft Outline of its planned Integrated Reporting Framework. In releasing the Draft Outline, the IIRC is striving to keeping stakeholders informed on the most likely structure and content of the upcoming Framework, which will take into account feedback from the discussion paper, information gleaned from the Pilot Programme and Investor Network, and research conducted by the IIRC Secretariat. The IIRC also announced its timetable for future releases: a Framework prototype in 2012, Draft Framework in early- to mid-2013, and “version 1.0” of the Framework in late 2013.
3. Australian FRC Issues Suggestions for Managing Reporting Complexity
The Australian Financial Reporting Council (FRC) has issued suggestions for managing complexity in financial reporting and called for a simplification in the newly released
Managing Complexity in Financial Reporting. In the report, which is based on the work of the Managing Complexity Task Force, the FRC makes recommendations on how to reduce complexity, such as how to make the most of technology, overcome legal impediments, and develop guidelines to encourage use of financial reporting terms and definitions. The report is open for public comment until
July 31, 2012.
4. Rio+20: Financial Reports Likely to Include Environmental P&L in 10 Years
Due to progress made during the recent United Nations Conference on Sustainable Development (Rio+20), corporate and government accounting that reflects environmental profit and loss is likely to become the norm within 10 years, according to many conference participants. The conference, with more than 40,000 participants, focused on implementation of sustainability initiatives and the global shift that has governments, the public sector, and society as a whole focusing on sustainability and the environment; more than 700 commitments to “deliver results” were received. An outcome document,
Realizing the Future We Want for All, has also been released.
5. IASB Invites Comments on IFRS for SMEs
As the first step in its review process, the International Accounting Standards Board (IASB) has issued a Request for Information for International Financial Reporting Standards for Small- and Medium-Sized Entities (IFRS for SMEs). The IASB is seeking views on if there is a need to make any amendments and, if so, what is needed. Comments are requested by
November 30, 2012;
a timetable for the review project is also available online.
6. GRI Issues Exposure Draft for Fourth Generation Guidelines
The Global Reporting Initiative (GRI) has published the draft of its fourth generation Sustainability Reporting Guidelines,
G4 Exposure Draft, which includes updates in multiple areas. The proposed new guidelines are open for public comment until
September 25, 2012. GRI has also made available a
summary report of the feedback it received during the initial public comment period in 2011.
7. UK to Require Carbon Emissions Reporting
The UK government has announced plans to mandate carbon reporting for all firms listed on the London Stock Exchange, which will require approximately 1,800 companies to report annually on greenhouse gas emissions beginning at the start of the next fiscal year. The announcement was made via an op-ed in
The Guardian by Deputy Prime Minister Nick Clegg regarding the then-upcoming
United Nations Conference on Sustainable Development (Rio+20).
Recent Developments Related to the Finaical Crisis and Economic Recovery
1. G-20 Leaders Give FSB More Financial Autonomy
2. Basel Committee Expands Rules for Internal Auditors
The Basel Committee on Banking Supervision recently published new internal audit rules designed to strengthen risk prevention for lenders. The new rules require internal auditors to report directly to a bank’s board or audit committee, not senior management. In addition to circumventing any possible slow down on information the board receives, the Basel Committee also feels this will make it harder for a board to ignore information from internal auditors, or claim it was unaware.