Anyone that works within the international arena of accounting will be aware of the discussions over the years about the convergence between IFRS (International Financial Reporting Standards) and US GAAP (US Generally Accepted Accounting Principles).
Whilst there are similarities between the two sets of accounting rules, importantly there are also differences.
The majority of the G20 (in effect, the 20 largest economies in the world) already use IFRS but over in America they are pretty attached to the US GAAP rules.
The IASB (International Accounting Standards Board) has been working closely over the years with its US counterpart, the FASB (Financial Accounting Standards Board) to minimise the difference between the two sets of rules.
Following an announcement last week by the US Securities and Exchange Commission which failed to include a clear action plan about adopting international accounting rules, it looks like the IFRS supporters may be losing a bit of patience.
Michael Prada, the chairman of the trustees that oversee the IASB was critical of this lack of an action plan and was quoted as saying:
“While recognising the right of the SEC to determine the method and timing for incorporation of IFRSs in the United States, we regret that the staff report is not accompanied by a recommended action plan for the SEC. Given the achievements of the convergence programme inspired by repeated calls of the G20 for global accounting standards, a clear action plan would be welcome.
For the benefit of both US and international stakeholders, the Trustees look forward to the SEC resolving the continued uncertainty regarding the US’s commitment to global accounting standards.”
Or to put it in less diplomatic wording, “for goodness sake can you please get on with it”.
In summary it looks like there’s not going to be true global accounting standards in the immediate future.
One thing for sure though is that IFRSs seemed to be going from strength to strength. In the words of Hans Hoogervorst, the Chairman of the IASB:
“IFRSs have already achieved critical mass as international standards and with more than two thirds of the G20 now on board, the momentum behind them becoming global accounting standards is irreversible. We are confident in our mission to achieve a single set of high quality global accounting standards and we continue to work to serve investors and other users of IFRSs across the world.”
So all that hard work in learning the various IFRSs in your professional exams looks like it will be worth it.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-07-23 11:35:082012-07-23 11:35:08Will we ever see true global accounting rules?
If you work for one of the top firms of accountants in the world and you’re an audit partner it must be [a refreshing change/really annoying – delete as appropriate] when you yourself are audited.
Well in the UK this has just happened for some of the major accounting companies.
The Professional Oversight Board is one of the bodies that works towards improving the quality of audit work and audit firms. They have just published their 2011/12 inspection reports and there were some interesting findings.
Their public report on their inspection of PwC for example commented on a number of items including PwC’s “audit transformation programme”.
The POB said that
“During the year, the firm launched its Audit Transformation programme, the stated objective of which is to enable audit teams to focus on key judgment areas, standardise the firm’s approach and improve audit quality. However, the guides issued to date under the programme appear to focus on improving audit efficiency by reducing audit hours.”
The Report then went on to say that
“The programme also includes increasing the use of the firm’s off-shoring capability, now through two overseas centres, one in India and the other in Poland. Work performed in 2011 by these centres accounted for about 4% of the firm’s core audit hours and is expected to increase to 6% in 2012.”
The POB work was quite thorough as they also looked at PwC’s “staff performance evaluation” forms where interestingly they found that “approximately a quarter of the appraisal forms and objectives for the following year were signed off after the due date.”
The good news for PwC was that the vast majority of the 14 audits that were examined by the POB were either performed to a “good standard” or an “acceptable overall standard”.
Unfortunately for them though there was one audit which was singled out as requiring “significant improvement”.
In case any of you are interested in reading the reports on PwC and some of the other major accounting companies, they can all be found here.
Somehow though I don’t think the partner responsible for the “significant improvement required audit” will be showing all his friends a copy of the report.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-06-18 23:14:072012-06-18 23:14:07Good and bad news for PwC…
It doesn’t matter how good your answer is, if the markers can’t read your handwriting you won’t get the marks. It’s as simple as that.
As well as having the requisite technical knowledge students must have the necessary exam technique to ensure a pass. One of the more common complaints from markers is that sometimes the handwriting on exam scripts is so bad that they simply cannot read the answers. If they cannot read the answers then they cannot give you any marks.
Whilst it’s probably a bit late now to radically change your handwriting style, there are some simple steps you can take to make your script more readable. An easy one is to leave a gap between each paragraph. This breaks up the text on the page so that it doesn’t look too cluttered and will be easier for the marker to read.
Another point is to practice writing answers under exam conditions. Some of the papers are “written style” papers rather than a numerical one so you must get used to writing under exam conditions. The last time you probably wrote for 3 hours was at the last exam session! Everybody tends to use computers more and more these days and it’s relatively unusual to be writing significant amounts by hand. Practice writing answers under exam conditions and then give your answer to a friend or family member and see if they can understand it!
This was brought home to me the other day when I was talking to my niece. When I mentioned that as a child I used to write notes to fellow students and pass them around the class, she looked at me as though I was a dinosaur. Nowadays they don’t handwrite them but instead send phone text messages to their fellow students. Writing by hand will soon become a thing of the past…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-05-28 18:58:132012-05-28 18:58:13It doesn’t matter how good your answer is, if the markers can’t……
If something goes wrong on an audit, whose fault is it? Is it the partner’s fault or the junior member of staff’s fault?
Over in Australia, the Sydney Morning Herald newspaper has provided some interesting commentary on a legal case that is currently taking place concerning an audit undertaken by PricewaterhouseCoopers (PwC).
The background to the case is that shareholders in a company called Centro are claiming that PwC misled and deceived them by failing to properly disclose that the Centro group had billions of dollars of short-term debt that needed to be refinanced in 2006 – 2007.
The lead PwC partner on the audit, a gentleman by the name of Stephen Cougle, is facing a bit of a grilling in court at the moment.
Under cross-examination yesterday in the Australian Federal Court, Mr Cougle denied trying to “bury” one of the errors by putting it in the small print notes at the back of the accounts.
According to reports, he said “when one of his PwC colleagues told him in late August that a $1.1 billion bridging loan had been wrongly classified as a long-term debt in the unaudited, preliminary accounts, he suggested Centro might need to disclose it publicly. When Centro declined this idea, he decided one option was to point to the discrepancy in a note to the final accounts”
According to Mr Cougle though he did not try to “bury it”.
Whether or not it was satisfactorily disclosed will be a decision for the court and that decision is not expected until the end of May
However, one thing for sure is that a number of the junior PwC staff members who were on the audit are probably not currently the best of friends with Mr Cougle.
Despite being the lead partner on the audit, he has already “declined to accept any responsibility for the accounting debacle” and has “blamed junior staff.”
Now blaming junior staff for an error in the accounts that you signed off on is in itself an interesting point to debate. After all, there is a well-known saying that you “can delegate work but you can’t delegate responsibility”.
The outcome of this case will be very interesting for auditors around the world. Not least for guidance on who is the best person to blame if there is an error on your audit…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-04-25 10:42:192012-04-25 10:42:19Should a PwC partner blame the junior staff?
I guess we’ve all done it at some time or another.
We’ve woken up one morning and due to too much work (or too much drink…) you look in the mirror and think “oh dear” (or some similar but slightly stronger words).
Well step forward Mr Ed Moyse and Mr Ross Harper who when they looked in the mirror recently saw the Ernst & Young logo staring back at them.
Now this wasn’t a drunken night out at an EY party that went wrong. No, it was a deliberate move.
The two entrepreneurial university students were thinking of ways to reduce the student debt that they had built up when they came up with the idea of using their faces as mobile advertising screens.
They set up their website – buymyface.com – and are selling their “advertising board” faces for one year.
One of their first clients was EY who paid them to display the EY logo on their faces during a skiing trip to the Alps so that EY could advertise to potential new recruits.
The idea seems to have caught on and according to their website as of today they have raised £34,000 from selling their unusual advertising boards.
Their going rate for a day’s advertising on their faces has also increased since they started their business. They are now charging £600 for a day’s advertising.
EY seem to be so impressed with them that they have now become the main sponsor of the website.
Does this mean that at some stage in the future your accountants “uniform” of dark suit and white shirt will be accompanied by the corporate logo painted on your face?
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-04-16 23:31:102012-04-16 23:31:10Is this the new face of Ernst & Young?
It’s been a mixed year for Piet Hein Meeter the (former) chief executive of Deloitte in the Netherlands.
It started well for him as he was appointed as the new CEO of the Dutch operations of Deloitte on the 1st of January this year.
However within a few months his fortunes have changed dramatically.
Deloitte recently announced that Mr Meeter had resigned from his position due to “infringement of independence rules which surfaced following a routine internal compliance review arranged by Deloitte”.
The background to this is all about auditor independence.
In order for auditors to be able to do their job of “checking the books” of clients they have to be independent. After all, if an auditor is not independent from the company he is checking then there’s a risk that he or she may give a biased or incorrect opinion on matters.
In the case of Mr Meeter it seems that he had shareholdings in some of the clients of Deloitte Netherlands and hence broke independence rules (i.e. he headed up an audit company that checked the accounts of a company which he part owned).
It does seem rather strange that Mr Meeter held these shares as it’s a fundamental independence issue for senior staff and partners within accounting firms not to hold shares in clients.
It may well have been a simple but extreme case of oversight by him as there was no evidence of him benefiting from his shareholding and position (the investigation by Deloitte pointed out that “Meeter had no involvement in any of the audits of the applicable companies and that Deloitte’s independence as audit firm of these clients has not been impacted).
Deloitte quite rightly acted quickly though to avoid any potential problems and Mr Meeter is now no longer with Deloitte.
We wish his successor, Mr Peter Bommel, the best of luck in his new role.
Mr Bommel is currently the interim CEO of Deloitte Netherlands and no doubt has recently reviewed his personal investments very carefully to ensure that there is no repeat of Mr Meeter’s error.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-04-09 12:37:402012-04-09 12:37:40Hello and goodbye to the CEO of Deloitte Netherlands…
The IT guys I’ve met in my career have all been very nice people. Admittedly they all seem to be slightly mad and do tend to talk in a strange language with lots of mentions of “coding this and coding that”.
To be fair though they all probably think I’m slightly mad when I talk to fellow finance people in my strange language about “SOCI this and SOFP that”.
If you talk to your IT colleagues though one thing that they tend to take very seriously is the level of security.
Now whilst there are lots of higher level security precautions present such as firewalls and anti-virus programmes there are also some more simple precautions that you should take.
Memory sticks (or USB or flash drives as they are sometime known) can all contain confidential documents and most memory sticks are not password protected.
It pays to double check what’s on the memory stick you’re carrying around with you in case it contains confidential documents and you lose it.
In a similar vein it’s always worth checking what other files are on your flash drive if you’re about to make a presentation.
Unfortunately for Father Martin McVeigh, a Catholic priest in Northern Ireland, he didn’t check what other files were on the flash drive he was going to use when he recently did a presentation to some parents of children at a local primary school.
According to media reports, whilst loading up his presentation for the parents, Father McVeigh inadvertently showed a slideshow of indecent pornographic images onto a screen.
The x-rated slideshow was on the memory stick that Father McVeigh had put into the computer to load up his intended presentation.
Father McVeigh was understandably a bit shocked at seeing the naked pictures on the screen (although to be fair probably not as shocked as the parents in the audience were) and according to the BBC website he was “visibly shaken” and “bolted out of the room”.
He later stated that he didn’t know how the images got onto the memory stick.
And the morale of the story?
Well, I guess that IT security is not just the higher level technical areas but also the more simple areas such as making sure you know what else is on your memory stick…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-04-02 11:53:222012-04-02 11:53:22Not the best way to start a presentation…
We blogged earlier this year about Michel Barnier, the EU internal market commissioner announcing plans to issue new laws which would dramatically impact the “Big 4” (namely Deloitte, Ernst & Young, KPMG and PwC.)
Well, these changes have now got a bit closer as the draft law has just been released.
In an attempt to reduce conflict of interest and to introduce more competition into the industry the main proposal of the draft law includes the requirement for the Big 4 firms to separate their auditing and consulting divisions in the EU.
This is a pretty big issue as in simple terms if the law becomes final it could prevent the Big 4 “audit firms” from providing any non audit related services such as consulting, providing tax advice or running training courses.
This could see a major restructuring of the audit profession.
Other provisions in the draft law include banks being banned from insisting that a company uses a Big 4 firm if they are to be lent money by the bank (at the moment a number of banks make it a requirement for a company to be audited by a Big 4 firm before they will release significant loans.)
There is also a proposed requirement for audit firms to be rotated every 6 to 12 years.
Perhaps unsurprisingly the Big 4 are reported to be against any changes to the current rules (after all as the saying goes, “how many turkeys would vote for Christmas?”).
I’m pretty sure though that the “mid tier group” of auditing firms that are below the Big 4 in terms of size such as BDO, Grant Thornton and Mazars would maybe take a different view to the Big 4 and be in favour of Mr Barnier’s views as this could open up a number of opportunities for them.
Before everyone that works at a Big 4 company starts rushing to rearrange the office furniture though it’s worth noting that the law at the moment is only draft and the EU states and the European Parliament have to provide the final sign off before the law becomes a reality.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2011-12-02 14:33:362011-12-02 14:33:36The Big 4 don’t appear to be happy about this…
According to a report released yesterday by Eurostat, if you’re in the UK and you’re speaking to a woman then there is a 24% chance that she is obese (or to use less technical terminology, she is very fat).
At the other end of the “fat scale” are ladies from Romania who have the privilege of being the “slimmest nation” in the EU with only 7% of Romanian ladies being classified as obese.
So nearly 1 in 4 ladies in the UK are obese. From an environmental analysis point of view this increase in the number of fat people over recent years is a classic movement in the “Social” part of PESTEL analysis.
As well as having serious implications for the health of those individuals that are overweight the movement towards “fat nations” can have serious implications for businesses over the medium to long term.
In the private sector, Airlines for example will need to invest in bigger seats and spend more on fuel costs to move all this heavier weight around the world.
The public sector will also be impacted with for example hospitals needing to have stronger and bigger beds.
One interesting thing I noticed within the Eurostat report though was the following statement:
The share of obese persons also varies according to the educational level. For women, the pattern is again clear: the proportion of women who are obese falls as the educational level rises in all Member States.
Wow – this is interesting as surely it means that the cleverer you are, the less likely you are to be fat?
So does this means that all your hard work spent improving your educational levels by studying for ACCA and CIMA not only helps your career but also reduces your chances of being obese??
This must be an additional incentive for studying and it also provides a great excuse for any gentlemen that are reading this.
After all, if your wife or girlfriend happens to catch you looking at a slim lady then all you have to say is that you were simply “admiring her intellectual ability”…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2011-11-25 20:28:062011-11-25 20:28:06Will passing your ACCA or CIMA exams make you slimmer?
There’s a saying that studying for professional exams is a marathon and not a sprint.
In other words, it’s a long hard journey to reach the exam finish line and not just a quick sprint to exam glory. Anyone that has qualified as an accountant will fully appreciate that it’s hard work and certainly feels more like a marathon than a sprint!
So qualifying as an accountant can be compared to a marathon race although one thing for sure is that you shouldn’t adopt the approach that Mr Rob Sloan took when he recently ran the Kielder Marathon in the UK.
Mr Sloan was 20 miles through the 26 mile race when he decided to give up because he was feeling tired. He then got on a bus and headed home.
As luck would have it though his bus home went near the finish line and he jumped off just before the finish line. He then hid behind some trees and came back to the course when he thought no one was looking and then sprinted to 3rd place.
Mr Sloan was awarded the medal for 3rd place but luckily for the honest runners in the race, his cheating was eventually found out and he was disqualified from the race and is now facing a ban from his running club.
It’s only the examiners that know for sure what’s in the December 2011 ACCA exams but we’ve put together a list of subject areas that we’d personally make sure we knew pretty well in the run up to the exams.
We’ve also added to our free ACCA and CIMA courses by launching free online training courses on Facebook towards ACCA’s Foundations in Accountancy (FIA) qualifications and these courses can also be found at www.facebook.com/theexpgroup
Good luck to those of you that are studying for the exams and I hope the final sprint goes well and you’re not forced to “get on the bus” half way through…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2011-11-21 17:46:402011-11-21 17:46:40ACCA exam tips released today but don’t do what this person did…
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