News from Member Bodies, Affiliates and Regional Accountancy Organisations
1. ICAZ Proposes Expanding Membership
The Institute of Chartered Accountants of Zimbabwe (ICAZ) has sent a proposal to its members on expanding membership criteria. The letter says the ICAZ has “the prerogative to work towards the growth and advancement of the profession” and cites statistics that show more than half of all accountancy students from 1990 to 2011 have yet to attain membership due to a rigorous exam process. The letter also references potential members in senior positions in commerce and industry who are highly experienced professionals and neither members nor students. Additionally, the letter quotes information from the World Bank Reports on the Observance of Standards and Codes on Capacity Building on the number of private colleges and polytechnics in Zimbabwe that train students in accounting; these students are not regulated nor do they have any continuing professional development requirements since they are not members of any professional body.
2. ICPARD Calls for Public Institutions to File Financial Statements
The president of the Instituto de Contadores Públicos Autorizados de la República Dominicana (ICPARD), Pedro Matos, recently called for more public institutions in the Dominican Republic to file their missing financial statements. According to Mr. Matos, 90% of public institutions do not meet filing requirements, which fuels a lack of transparency for the entire government.
3. Sustainable Business Success Conference to be Held by MIA
Innovative Society: Sustaining Business Success, the Malaysian Institute of Accountants (MIA) International Accountants Conference 2012, will be held in November 2012 in Kuala Lumpur. The conference aims to improve the quality and creativity of accounting professionals, who are at the center of many businesses, and strengthen innovation, both of which lead to sustainable success. Session topics include transitioning from cash to accrual accounting, International Public Sector Accounting Standards and sovereign debt, and audit reporting. More information on the conference is available on the
MIA website.
4. ACCA: Significant Gap Exists between Profession and Public Perception of Accounting
The accountancy profession will “continue to lose credibility if it fails to educate the public and its stakeholders of its value and take steps to rebuild trust in the industry,” according to a new report out from the Association of Chartered Certified Accountants (ACCA). The research in
Closing the Value Gap: Understanding the Accountancy Profession in the 21st Century indicates that 75% of accountants believe that the general public considers them to be trustworthy; however, only 55% of the public agrees. The report includes recommendations for the profession as a whole to narrow this gap.
5. NZICA: Eliminate the Pay Gap for Female Accountants
The New Zealand Institute of Chartered Accountants (NZICA) is urging employers to address the significant pay gap between male and female accountants in New Zealand. According to NZICA’s annual survey of members, female accountants make 26% less than their male counterparts. The gap is less significant for accountants with less than five years of experience—only 9%. However, as accountants gain experience the gap grows. "The face of our profession is changing and pay and conditions need to change as well if we are to attract and retain staff,'' said Jeana Abbott, NZICA director of marketing and human resources. This year’s survey was the first time salary information was broken down by experience.
6. AICPA to Offer XBRL Certificate Program
The American Institute of Certified Public Accountants (AICPA) has announced plans to launch a certificate program for XBRL (eXtensible Business Reporting Language) in early 2013. The program, which is being developed with
XBRL US, will include 30 hours of online coursework broken down into eight modules, such as the basics of XBRL and understanding US GAAP taxonomy, as well as more complex topics. Public companies in the US are currently required to use XBRL to file financial statements.
7. CIPFA Releases Consultation on UK Public Sector Internal Audit Standards
The Chartered Institute of Public Finance and Accountancy (CIPFA) has launched a consultation on the draft of the Local Government Application Note to the UK Public Sector Internal Audit Standards (PSIAS). The consultation provides further explanation of the PSIAS and how to apply the standards. Although the application note was developed to provide guidance for local governments that fall under the CIPFA Code of Practice for Internal Audit in Local Government in the UK, much of the content is also useful for internal auditors in other areas of the public sector. In addition to general feedback, CIPFA is interested in suggestions regarding any other areas of the PSIAS where additional guidance is needed. Responses are requested by
October 1, 2012 and should be sent to l
gapplicationnote.consultation@cipfa.org.
8. Hong Kong Institute Uses Children’s Literature to Teach Ethics
May Moon’s Book of Choices, the third May Moon children’s book on financial and accounting topics, has been published by the Hong Kong Institute of Certified Public Accountants. In this adventure, May Moon and her friends learn about ethics and “money morals” from CPAs to save their town. The May Moon books are designed to reach families and encourage financial literacy at a young age. Previous titles include May Moon Rescues the World Economy and May Moon and the Secrets of the CPAs.
9. Joint Initiatives Launched Among Professional Accountancy Organizations
• Three new tools focusing on improving the efficiency of the finance function have been released by CGMA (Chartered Global Management Accountant), a joint initiative of the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants. How to Use SWOT Analysis for Finance Organisation Transformation, Mentoring for Success: A How-To Guide, and Effective Communication Skills are available on the CGMA website, along with an overview.
• The conference, The Vital Role of Professional Accountancy Organisations, was recently held by the Confederation of Asian and Pacific Accountants and the Vietnam Association of Certified Public Accountants in Hanoi, Vietnam, in August 2012. The conference was designed to highlight to Vietnamese policymakers the crucial role professional accountancy organizations (PAOs) play. The event, which included presentations from IFAC member body development staff, also discussed the development of the accountancy and audit profession in Vietnam, the necessary and important role of PAOs within Vietnam’s financial infrastructure, and the importance of PAOs.
News from Governement, Regulatory Bodies, and Other International Organisations
1. EFAA Makes the Case for Mandatory Audits for Medium-Sized Entities
The European Parliament is being urged to reject a proposal that would exempt medium-sized entities from the mandatory requirement for a statutory audit by the European Federation of Accountants and Auditors for Small- and Medium-Sized Entities (EFAA). EFAA argues that the proposed exemption should be rejected for multiple reasons, including the public value of audit, contradictions with the policy framework of the Small Business Act, and a lack of evidence of any net benefit from the proposal.
2. Nigerian Government Continues to Make Progress in IPSAS Adoption Process
The Nigerian government is moving closer to adoption of International Public Sector Accounting Standards (IPSAS) and International Financial Reporting Standards (IFRS), including creating a governmental subcommittee of the Federation Accounts Allocation Committee to design a roadmap for the adoption of IPSAS throughout the Nigerian government. Additionally, the government has been holding training workshops for accountants to provide technical and operational guidance in preparation. The accountant-general of the federal government, Jonah Otunia, said IPSAS are being adopted because of their "inherent qualities of promoting transparency and accountability in the country” and will “serve as a foundation for a better Nigeria.” The Financial Reporting Council of Nigeria Act, which dictated the adoption of IPSAS and IFRS, was signed into law in 2011.
3. New Study Shows Differences in National Accounting Standards Discourage Mergers
According to a recent academic study, national accounting standards with significant differences and a “lack of adherence to international financial reporting rules” are a significant deterrent to companies with an interest in cross-border mergers and partnerships. Additionally, those nations without strong regulatory enforcement of national GAAP appear to be unfavorable to mergers and acquisitions. The study, authored by professors from three US universities, also reports that mergers are more likely to happen in countries with similar accounting structures as it lessens the administrative burden on chief financial officers and other senior executives.
4. Opinion: Five Rules for Good Governance
Writing in CA Magazine, Marcel Côté, a founding partner of SECOR Consulting in Montreal, Canada, says there are five rules that should complement the basic principle of a separation in the roles of directors and senior management to ensure good governance: a clear vision, a well-defined value-creation strategy, annual and medium-term performance objectives, a clear-cut succession plan for senior management, and well-defined ambition.
5. New Guidance on GHG Emissions Proposed by GRI
New draft guidance on greenhouse gas (GHG) emissions has been released by the Global Reporting Initiative (GRI)’s GHG Emissions Working Group. The draft proposes new content for the fourth generation of guidelines (G4) that is more closely aligned with the GHG Protocols from the World Resource Institute and the World Business Council for Sustainable Development, as well as standards from the International Organization for Standardization (ISO 14064). The
G4 Thematic Revisions—Greenhouse Gas (GHG) Emissions is available on the GRI website; the comment period closes on November 12, 2012. GRI has also proposed new
anti-corruption guidance.
6. UK: Some SMEs to be Exempt from Statutory Audit Requirements
The UK government has announced plans to exempt more small- and medium-sized entities (SMEs) from statutory audit requirements if they meet certain criteria. The UK Business Secretary, Vince Cable, made the announcement and said the new rules would make it easier for companies to move to UK GAAP from International Financial Reporting Standards. The regulations are expected to be effective for accounting years ending on or after October 1, 2012.
Recent Developments Related to the Financial Crisis and Economic Recovery
1. Uzbek Bank Working to Improve Transparency
A new project has been launched in Uzbekistan by the Uzbek Central Bank and the World Bank to improve financial reporting and auditing in commercial banks. The project is designed to bring banking in Uzbekistan into accordance with the second and third accords from the Basel Committee on Banking Supervision (Basel II and Basel III) and increase transparency. The project is expected to take 12 months.
2. New Consultation Paper from IOSCO Continues Efforts to Ensure Economic Growth
The International Organization of Securities Commissions (IOSCO) has published a consultation paper as part of its response to a mandate from the Group of Twenty (G-20) in 2010 to achieve strong, sustainable, and balanced economic growth.
Technological Challenges to Effective Market Surveillance: Issues and Regulatory Tools features high-level recommendations to help authorities improve market surveillance, which are based on an IOSCO survey. Comments are requested by October 10, 2012.
3. ESMA Publishes Responses on Financial Reporting Paper
The European Securities and Markets Authority (ESMA) has published a summary of responses for its consultation paper, Considerations of Materiality in Financial Reporting, published in November 2011. The summary outlines the key issues raised by respondents and includes a listing of all respondents. As a result of the wide range of views received, the ESMA will host a public roundtable on October 1, 2012, to further discuss these issues.