ACCA awards Approved Employer status to Lahore Stock Exchange

ACCA (Association of Chartered Certified Accountants) awarded Lahore Stock Pakistan Ltd with Platinum Approved Employer Status and Continuous Professional Development (CPD) Approved Employer Status in recognition of their commitment towards training and development of ACCA trainees and members.

ACCA’s Approved Employer Scheme plays a pivotal role in the recruitment, development and retention of the ACCA trainees and members. As a benefit of being an approved employer, all ACCA trainees and members working for Lahore Stock Exchange will have an access to ACCA’s specialist resources customized for learning and development of finance and accountancy professionals. This close relationship will indeed attract talented human capital and demonstrate the organizations’ commitment towards development of employees –in turn leading to talent retention.

During the award presentation ceremony Mr Mian Shakeel Aslam, Managing Director, Lahore Stock Exchange, said that "The growing economy of our country is in dire need of appropriately skilled and qualified professionals who have high moral and ethical values. It is through organizations such as ACCA, that we expect to meet the rising need of accounting and finance professionals".

Speaking at the occasion Mr Arif Masud Mirza, Head of ACCA Pakistan said that, "The ACCA Approved Employer Programme supports organizations in reaching global best practice in the provision of learning and development opportunities for ACCA trainees and members. Employers like Lahore Stock Exchange have great impact on society and ACCA is proud to be associated with them."

Ch. Afzal Rahat – Member Director, Lahore Stock Exchange, Mr Jawwad Ahmad – Head of Internal Audit, Lahore Stock Exchange, Mr Shah Hussain – Head of Marketing and PR, Lahore Stock Exchange and Mr Muhammad Shahid Khan – Business Development Executive, ACCA Pakistan were also present at the ceremony.

Courtesy of ACCA Pakistan

ACCA Pakistan joins hands with Lahore Stock Exchange

ACCA (Association of Chartered Certified Accountants) awarded Lahore Stock Pakistan Ltd with Platinum Approved Employer Status and Continuous Professional Development (CPD) Approved Employer Status in recognition of their commitment towards training and development of ACCA trainees and members. ACCA’s Approved Employer Scheme plays a pivotal role in the recruitment, development and retention of the ACCA trainees and members. As a benefit of being an approved employer, all ACCA trainees and members working for Lahore Stock Exchange will have an access to ACCA’s specialist resources customized for learning and development of finance and accountancy professionals. This close relationship will indeed attract talented human capital and demonstrate the organizations’ commitment towards development of employees –in turn leading to talent retention. During the award presentation ceremony Mr Mian Shakeel Aslam, Managing Director, Lahore Stock Exchange, said that “The growing economy of our country is in dire need of appropriately skilled and qualified professionals who have high moral and ethical values. It is through organizations such as ACCA, that we expect to meet the rising need of accounting and finance professionals”. Speaking at the occasion Mr Arif Masud Mirza, Head of ACCA Pakistan said that, “The ACCA Approved Employer Programme supports organizations in reaching global best practice in the provision of learning and development opportunities for ACCA trainees and members. Employers like Lahore Stock Exchange have great impact on society and ACCA is proud to be associated with them.Ch. Afzal Rahat – Member Director, Lahore Stock Exchange, Mr Jawwad Ahmad – Head of Internal Audit, Lahore Stock Exchange, Mr Shah Hussain – Head of Marketing and PR, Lahore Stock Exchange and Mr Muhammad Shahid Khan – Business Development Executive, ACCA Pakistan were also present at the ceremony. {PR}

Bank statements become harder to read

Third of banks notch gains above €1bn on debt

European banks have made their financial statements longer and more complex despite the crisis, and it remains hard to judge risk and compare lenders, according to research from auditors KPMG.

KMPG's report, its third consecutive survey of transparency in 16 European banks' annual reports, found that the core sections of (financial statements, accounting policies and notes) increased by 20%. It said this was down to investors demanding more information amid the crisis.

The average length of annual reports increased by 3% to 317 pages.

As it is an auditor to some of the lenders in the study, KPMG stops short of actually forming opinions about the quality of individual bank reporting.

However, KPMG said it remained very tough for investors and analysts, whom it accused of relying on annual reports too heavily, to compare banks' accounts.

This was due to the disparity in the type of information provided, leeway offered by accounting rules and the complexity of both some standards and the nature of the banking industry.

Bill Michael, head of KPMG's UK financial services assurance, said: "If one considers the comparability of financial statements to be a primary goal, there is still some way to go."

Alluding to the UK Treasury Committee's call for annual reports to read more like histories and less like dictionaries, the foreword to the research said they remained too complex.

Five of the banks surveyed counterintuitively recorded gains of more than €1bn ($1.4bn) on their own debt when it fell in value. (This is because fair value accounting deems credit risk to fall when the value of debt falls.)

However, KPMG's research said while it was the case that many banks recorded such gains in 2007 and last year, it added: "Such gains will reverse in future years as it approaches maturity if the debt is not repurchased at the lower value."

Other highlights include:

• That liquidity, market and credit risk disclosures are difficult to interpret

• In spite of the perceived limitations of value-at-risk it remains the most common method to capture and control market risk exposure

• Loans on most banks' balance sheets have unexpectedly increased despite deleveraging across the industry. The research notes that this may be due to recent acquisitions and consolidation

• Five banks voluntarily disclosed a leverage ratio, although the definition and calculation methods are different

The 16 banks surveyed were: BNP Paribas, Société Générale (France); Commerzbank, Deutsche Bank (Germany); UniCredit (Italy); ING (Netherlands); BBVA, Santander (Spain); Nordea (Sweden); UBS (Switzerland); Barclays, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland, Standard Chartered (UK)

To read a full copy of the report, “Focus on Transparency 2009”, see www.kpmg.co.uk

DFSA's Paul Koster appointed to KIAS Setters

DFSA's Paul Koster appointed to key International Accounting Standard setters

UAE. At its meeting in Washington last week the public interest oversight board approved the appointment of Paul Koster, Chief Executive of the Dubai Financial Services Authority (DFSA) as a member of an influential advisory board of two key international accounting bodies, the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board (IESB).

While the IAASB is responsible for setting standards for auditing, review, other assurance, quality control and related services, and facilitating the convergence of national and international standards; the IESB is responsible for setting ethical standards and providing guidance for the accounting profession

Recognising that the Gulf states were not represented on these boards, the International Federation of Accountants (IFAC), the parent body of the IAASB and the IESB, invited the DFSA and the Emirates Securities and Commodities Authority (SCA) to join the advisory groups as the Gulf States Regulatory Authorities. As a result, Mr Koster and SCA’s Director of Research & Awareness, Dr Obaid Saif Hamad Al Zaabi, will represent their respective authorities on the consultative advisory groups for a renewable three year term.

Paul Koster, Chief Executive of the DFSA said, “The role of the accounting and auditing standard setters is a critical one, and it is important for regulators, especially in the current environment, to be closely involved in the evolving standards for auditing.

I welcome the opportunity to participate in and contribute, with my SCA colleague, to the work of these two advisory groups.”

Disclosure Framework

FASB Initiates "Disclosure Framework" Project Aimed at More Useful, Organized, and Consistent Disclosures

NORWALK, Conn.--(BUSINESS WIRE)-- Robert H. Herz, chairman of the Financial Accounting Standards Board (FASB), today announced the addition of a new FASB agenda project aimed at establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant.

The project was added in response to requests and recommendations received from several constituents, including the Investors Technical Advisory Committee (ITAC) and the SEC Advisory Committee on Improvements to Financial Reporting (CIFR).

"Many constituents have expressed concerns about so-called 'disclosure overload,'" said Chairman Herz. "While clear and robust disclosures are essential to informative and transparent financial reporting--a critical component in maintaining investor confidence in the markets--improving the way such disclosures are integrated can help decrease complexity. The Board will embark on this project to create a principles-based disclosure framework that will enable companies to communicate more effectively with investors and also help eliminate redundancy or otherwise outdated GAAP disclosure requirements."

Chairman Herz noted that the project objective is not intended to be "additive." Rather, it will focus on developing a framework for improved GAAP disclosures. It is envisioned that this framework would enable all entities to focus on making more coherent disclosures in their annual reporting package, move away from what some assert has become a compliance exercise, and perhaps facilitate XBRL electronic tagging of information.

Some specific financial reporting areas the project will evaluate and address include whether the disclosure framework should:

    --  Apply to all entities or perhaps exclude private or nonprofit entities
    --  Apply to interim reporting
    --  Focus only on high-level principles
    --  Focus only on notes to financial statements or extend to ways to better
        integrate information provided in financial statements, MD&A, and other
        parts of a company's public reporting package.

The FASB expects to begin deliberations this quarter and plans to issue a preliminary views document in the first half of 2010.

Copyright Business Wire 2009

About the Financial Accounting Standards Board

Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.fasb.org&esheet=6002200&lan=en_US&anchor=www.fasb.org&index=1.

Source: Financial Accounting Standards Board

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Financial Accounting Standards Board
Neal McGarity203-956-5347

Your brilliant career

As soon as you start studying for a career in finance, you are nudging open the door to a world of opportunity – though many students may be surprised at how wide the variety of options can be, and how far the ACCA Qualification can take you.

When Nairobi-based Edmund Bernard Mndolwa was offered a scholarship by East African Railways & Harbours to study for ACCA exams, he wasn’t even sure what accounting was. ‘I perceived it as an extension of mathematics,’ he recalls, ‘and I believed that if I could solve any mathematics problem, I could be an accountant.’

On starting his studies, the reality came as something of a shock, but he ‘opened his mind and studied hard’ to pass his exams, then went on to build an impressive finance career. Edmund, now an FCCA, rose to become a partner at PricewaterhouseCoopers in Tanzania, write a number of technical books, and hold a government post as commissioner of finance.

Natasha Winn’s finance career has also taken her to some places she did not anticipate. She trained with a small audit firm in Trinidad, and after qualifying, moved to another small venture, Trinidad Shell, where the skills she acquired enabled her to relocate to the US and work for much larger companies. ‘My US experience gave me a fantastic insight into all areas of operations,’ says Natasha. ‘It prepared me for my move to Shell Brunei, and my role as head of governance risk and assurance.’

Even so, Natasha believes she would not be where she is today without her ACCA Qualification. ‘It has really helped my career,’ she says, for a number of reasons. ‘There were so many benefits. Apart from the obvious academic knowledge and accreditation gained, I was approached for my Shell interview at the school where I was studying for my ACCA exams.’ Her contact with fellow members has also been important. ‘The social and business network you gain with ACCA can form lifetime bonds that continually grow,’ she adds.

An accountancy qualification will also give you a wide range of career options. ‘Finance professionals can work in any business sector, and there are lots of different specialist areas, so the possibilities are endless,’ says Beverly Cooper of Staffing Solutions. For example, Ilona Weiss FCCA is chief technology officer with the Polish software company Sage Symfonia; John Smith FCCA is chief executive of BBC Worldwide; Hassam Gaffar FCCA is chief operating officer with Botswana Life Insurance Ltd; and George Calinescu FCCA is deputy CFO at RBS Bank Romania.

Dare to dream
Your future career may be hard to imagine now, if you are struggling to pass your exams and survive on a tight budget, but if you work hard, one day you could be both professionally successful and financially secure. ‘From childhood I knew that I wanted to do something with numbers,’ recalls Angela Lee Loy FCCA. Although her parents could not afford to send her to university, she used her A-levels as a springboard into accounting.

‘The accessibility of the ACCA Qualification allowed me to start a successful career,’ she says, ‘and a qualification coupled with practical experience allows you to move up quickly.’ It was a combination that enabled her to become partner in a Big Four firm at just 33 years of age. ‘I’ve never looked back since,’ enthuses Angela, who now runs her own accounting outsourcing company, Aegis Business Solutions.

The ACCA members mentioned here have all followed many different career paths to get where they are today. But the variety of options they have each faced, and the choices they have made, only hint at the numerous possibilities that could be available to you. Cooper says: ‘Practice, the public sector, and industry and commerce are all open to ACCA qualified and part-qualified accountants who can demonstrate the right skills and experience.’ And these days, it’s increasingly easy to move between sectors.

Xia Xiao Yan started her finance career with a property management company, then moved into practice and worked in audit for a couple of years, before going back into industry as the finance and accounting manager for one of China’s largest computer producers. Vince Sloyan started in the public sector, at the UK National Health Service, but even after nine years there, he had no problem stepping sideways into business and a management accounting role with Reuters, the news service and financial market intermediary.

Who knows where you could be 10 or 20 years from now. As a student your brilliant career is only just beginning, but armed with the ACCA Qualification, there’s no limit to what you can achieve.

LOOK AND LEARN
As a student, it can be difficult to gain a broad view of the many career possibilities available to a qualified finance professional. But as long as you can get (even intermittent and occasional) access to the internet, there is a world of enlightenment at your fingertips. To find out about the possibilities in practice, visit the websites of the world’s largest firms:

• Deloitte
• Ernst & Young
• KPMG
• PricewaterhouseCoopers

Don’t forget to check the websites of small, medium and regional firms, too. To learn more about careers in business, commerce, or the public sector, visit the websites of leading recruitment agencies:

• Hays Specialist Recruitment
• Michaelpageinternational
• Robert Half International
• Hudson Highland Group

Looking through the advertisements for various finance roles, and reading about the skills and expertise they require, can broaden and deepen your understanding of the accountancy profession and the career opportunities it provides.

To get a greater insight into the experiences and achievements of ACCA members and students, visit the ACCA website, using the key words ‘member profiles’, you can read articles from the archives of ACCA’s magazines and publications. The more you know about the careers of others, the more you can do to shape your own future.

The lowdown

Credit squeeze. Credit crunch. Global financial meltdown. Whatever you want to call it, the world is trying to come to terms with the impact, locally and internationally, of the economic downturn. And on personal and professional levels, even the most optimistic student accountant may struggle to see beyond the doom and gloom. But as with many apparently disastrous scenarios, the current crisis brings both bad news and good news.

Let’s start with the downside – things can only get better. The global financial services industry is going through a period of unprecedented change: it will be some time before it recovers, and by then, it may well have changed beyond all recognition.

Commercial and not-for-profit entities are reeling from the impact: sources of liquidity have evaporated, economic growth is slowing, entire industries are being decimated, and the financial jobs market is shrinking. But perspective is everything, and there is an upside.

Members of the accountancy profession are reassuringly well positioned to survive the downturn, and to thrive when the upturn emerges – as it inevitably will. The landscape of the financial job market may be changing, but while demand for some roles is declining, for others, it is rising, and smart students will position themselves to exploit the career opportunities this presents.

Bend in the wind
Finding a job with a new employer will be more difficult during 2009 than it was in 2008, but it is far from impossible. ‘Many organisations with positions to fill would consider recruiting a candidate who has the required qualifications but lacks practical experience, and then provide them with the necessary training on the job.’ reports Mark Thomas, associate director with the international recruiter WH Marks Sattin ‘Employers get the benefit of strong theoretical knowledge without so much practical experience, which is often more cost effective, and the candidate gets the chance to obtain the relevant experience. So it’s a win win situation.’

But there’s no getting away from the fact that there are fewer jobs on the market than there were a year or even six months ago. ‘Lots of good people who might otherwise be open to opportunities are staying where they are,’ says Thomas.

The economic uncertainty means people are placing a higher value on job security – and this has a knock-on effect. ‘Where people have jobs, they are staying put, so there are fewer openings for others to move into,’ says Abigail Stevens, managing director of the international recruiter Think Global Recruitment (TGR). The power has swung away from jobseekers towards employers. ‘The market now is employer-driven; not candidate-driven,’ she adds. This means finance professionals will have to work a lot harder to find the roles they’re looking for, to increase their chances of being selected, as Richard Park, head of international business with the financial recruiter Martin Ward Anderson, confirms: ‘A year ago, the market was totally candidate-driven, but employers now are being more picky about who they recruit.’

Rise to the challenge
This creates new challenges for students. ‘In a candidate-driven market, employers don’t expect to find someone who ticks all of the boxes on their wish list,’ explains Thomas, who says that until the downturn, organisations were happy to recruit somebody who could deliver on five or six out of 10 criteria. Now they have higher expectations: ‘They may want to see eight, nine, or even 10 out of 10 boxes ticked,’ he adds.

So if you want to appeal to a new employer in the current marketplace, what must you do to stand out against the competition? ‘At the moment, candidates need to be open minded, and present themselves more professionally,’ explains Park. Your CV will need tailoring to each employer’s needs much more closely than previously, and it should demonstrate your strengths and your ability to add value very clearly (see ‘How to sell yourself’, below).

And Park suggests that you focus your efforts on acquiring the sorts of skills and experience that are most transferable. This can be easier said than done, of course, until you know what those skills are. ‘It’s important to get any people management experience you can,’ he advises, ‘so that you can showcase your communications strengths, interpersonal skills and your organisational abilities.’ According to recruiters, employers will also be more impressed by professionals who have augmented their technical expertise with soft skills, in areas such as negotiation, networking and presentation, while language skills can also be a bonus.

‘European employers are still looking for candidates with language skills,’ says Stevens. If you can offer a European language, such as German, Spanish or French, you will dramatically improve your employability. ‘The big multinationals are still moving people between countries internally, but it will be six to 12 months before they need to do more external recruitment,’ she believes.

‘Some industrial sectors are naturally more resilient,’ says Park, citing drink, gambling and tobacco, and although the retail sector overall offers fewer career opportunities than usual, both nationally and internationally, many providers of fast food and low cost goods and services are thriving. Most countries can also expect their domestic tourist industries to improve during a recession, because people visit local tourist destinations rather than flying off to exotic locations, so there are possibilities in this area too.

It seems clear that what’s bad news for one individual, organisation, or industrial sector is often good news for another. So no matter what happens, try to stay positive, maintain a constructive and optimistic outlook, and be flexible.

HOW TO SELL YOURSELF
The ‘war for talent’ is over, and if you want to advance your career, you will need to sell yourself to potential employers. ‘Make sure that your CV lists your achievements, and shows what you have done to really add value,’ advises Claire Cuthbert, a manager at Euro London Appointments.

If you are applying for positions online, tailor your CV to each application and ensure you match the requirements and competencies needed for the role. Then, if the employer is using an automated screening process, you can be sure that your CV will at least get looked at.

Play to your strengths. If you are sociable and empathetic to other people’s views, this can show that you are a good team player who can liaise with people at different levels. If you pride yourself on never being late, this can demonstrate that you will go the extra mile to meet deadlines.

If you tend to be a bit forgetful and can only function if Microsoft Outlook provides a steady stream of reminders, use this to demonstrate that you are an organised worker with plans and deadlines – and show an employer that you are capable of developing a positive strategy to overcome your weaknesses.

‘At interview, focus on achievements in your last role rather than just responsibilities,’ suggests Cuthbert. Did you come up with any problem-solving ideas, save the company money, or streamline a process to make it more efficient? ‘Try to list at least two or three achievements for each position you have held,’ she adds, and always emphasise the positive.

Pakistan Job Market

Current Scenario of Pakistan Job Market

Pakistan is always struggling with its Job market situation and creates employment opportunities never the same. An unforeseen situation in the country and Government polices always varied which effects seriously on job market.

Factors affecting the Job Market:

The deteriorating law and order situation in various parts of the country forced the investors to offload their investments. The news of bomb blasts and ever increasing threats of blasts in different cities kept the investors and business growth activities on the sideline. It affect as a serious stop mark on Pakistan job market.

Load shedding of electricity is disturbing economy, especially the industrial sector as it is one of the largest sectors of Pakistan’s economy. This sector should employ a large number of labors. But Due to electricity breakdown already established industry is deteriorating, resulting in the prevailing unemployment ratio. Due to less availability and high rates of basic inputs like electricity, gas and oil etc, many industries have been closed and many preparing to close. This uncertain situation of power failure is reducing the plans of the future Business expansion in the country and leaving an irremovable impact on Pakistan Job market.

Current international financial crisis is also one of the biggest reason of unemployment in Pakistan and in the whole world. This crisis originated from the banking sector of USA, UK and some European countries and is now a global phenomena.

Factors favorable to the Job Market

In current adverse market situation jobseekers are exploring new ways for employment activities and businessmen are trying almost everything to reduce the cost of production, it has opened the doors of opportunities of outsourcing and off shoring which were buzzwords a decade ago but unfortunately we couldn’t materialize the opportunity provided to us.

The recent global developments have made the internet a marketplace where you can work at home as a free lancer and safely make extra money. There are plenty of freelance sources available for freelancers who want to sell their time and skills in the global marketplace. Home office business is flourishing in the Pakistan and it is predicted to be the new ever increasing employment trend in the country.

Finding Jobs in Pakistan through online job portal like LineOwork is growing trend in Pakistan which has already benefited thousands of jobseekers and employers to connect each other in timely manner and savior over other traditional methods.

Economic conditions place CFOs in the spotlight

The economic downturn has raised the senior finance executive’s profile in organisations worldwide, with more Chief Financial Officers (CFOs) involved in strategy development and prioritising risk management than this time last year, finds new research from CFO Research Services and ACCA (the Association of Chartered Certified Accountants) published today. Surveying more than 450 CFOs worldwide on how current global economic conditions are shaping the role and perceptions of today’s CFO, the research report, called “The CFO’s new environment”, reveals that: · Finance is in the spotlight – 83 per cent of respondents say the finance chief’s role is more important than a year ago, with 70 per cent agreeing that the finance function receives more boardroom backing now than a year ago. · The CFO is more involved in strategy – 72 per cent of survey respondents agree that finance now works more closely with business units in strategic planning, while two thirds agree that the CFO is now more involved in the creation of a medium and long term corporate strategy. · Communication levels have increased - 77 per cent say that they have either increased or plan to increase the amount of internal communication carried out by their company, while two thirds say they have increased or plan to increase the amount of external communications. · Risk management is now a priority for many CFOs – 4 out of 5 CFOs say they are taking a more active role in this field and two thirds of respondents say they plan more education for their teams in this area. Mr Arif Masud Mirza, Head of ACCA Pakistan says: “When we commissioned this report, we wanted to find out how the new economic environment is shaping the CFO’s role and affecting the perception of their organisational value. The results show that CFOs are rising to the challenges brought about by global economic conditions, even though some will not have experienced such a severe downturn in their careers so far. “Organisations are looking for CFOs to bring their knowledge to bear on the wider business, using their analytical ability to understand and deal with risk, and help shape long-term strategy. It is a tall order, but it seems from these findings, that CFOs are more than equal to the task. Despite the increasing demands on their time, we may well be witnessing a renaissance for the CFO, with their expertise extremely highly-valued and sought-after in these tough times.”

ACCA calls for future financial shocks

ACCA calls for principles-based approach to avoiding future financial shocks

Financial regulation across major capital markets must be overhauled only after a comprehensive review of the factors which contributed to the global financial crisis, says ACCA (the Association of Chartered Certified Accountants) in an international policy paper published today. The report, The Future of Financial Regulation, urges global authorities not to rush to introduce heavy-handed regulation. Instead, it calls for joined-up action involving governments, regulators, companies and other stakeholders to ensure lasting improvements which will address both the current problems and anticipate future threats to the integrity of the financial systems and broader economy. Helen Brand, chief executive of ACCA, says: “We have spoken to chief financial officers, auditors and financial regulators from all the major capital markets and have produced a set of recommendations and principles which we hope will provide authorities across the world with a blueprint for regulation. It is important that governments co-ordinate their approach to restore confidence in the markets, though we are clear that this does not equate to a ‘one-size fits all’ policy. “It is vital that the apparent failure of ‘light-touch’ regulation does not become synonymous with a victory for rules over principles. The most important issue is not so much the description of the system, but that all parties understand and respect the purpose of regulation and that effective enforcement takes place. And those being regulated - banks and other businesses - have a crucial role to play in establishing a workable system.” Amongst the report’s conclusions are:· Competition: Governments and national authorities should regard the promotion of healthy competition in the market place as a top priority. Policy must be geared to preventing the creation of institutions which are ‘too big to fail’. This is anathema to effective regulation. Competition of ideas also benefits regulators and the welcome sharing of knowledge and best practice between countries should not extend to uniform requirements being adopted regardless of local market conditions. · Systemic approach: the regulatory system must take wider macro-economic factors into account and this should complement more effective monitoring of capital and leverage ratios of individual institutions. All relevant entities should be brought into the regulatory net. It is also crucial that regulators have sufficient numbers of staff with first-hand knowledge of their industries. · Governance: Financial institutions, encouraged by regulators, should adopt ethics-based corporate cultures on issues like remuneration which aim to ensure they act in the long-term interests of their stakeholders. The weaknesses in corporate governance and risk management practices shown up by the crisis must be addressed, with a specific review of whether the presence of non-executive directors on a company board remains an effective means of exerting supervision over the executive in large and complex institutions. · Accountability: The accountancy profession must consider ways of making the processes of financial reporting and auditing more useful to shareholders. Enhancing the quality of reporting on risk is key here. But accounts must continue to be geared principally to shareholders rather than regulators. Helen Brand concludes: “ACCA is encouraged that many of the ideas put forward in our paper coincide with recommendations being made elsewhere – the recent US Treasury White Paper Financial Regulatory Reform, published in 17 June 2009, stresses key causes of the crisis - the failure of risk management systems to keep pace with the complexity of new financial products and gaps and weaknesses in the supervision of firms by regulatory authorities. The US proposals recognise the need for a regulatory system which is simpler but more effectively enforced, and which is also able to adapt and evolve with changes in the financial market.”

Investors back flexible governance code

FRC publishes responses to consultation on UK corporate governance system

Investors have strongly backed the flexibility of the UK’s corporate governance rules. Shareholder groups that responded to a consultation on the UK code are broadly happy with the existing comply-or-explain approach.

They voice concern, however, over the quality of corporate reporting and say companies should do more to explain their positions when they do not comply with the code.

‘The general tone of the comments we received from both companies and investors is that, by and large, they prefer the flexibility the comply-or-explain approach provides,’ says Chris Hodge, head of corporate governance at the Financial Reporting Council (FRC), which is conducting the review. ‘That’s not to say they think it’s working perfectly. Investors still have concerns about the quality of some of the disclosures companies make, which they think aren’t sufficiently informative.’

The UK’s governance rules – known as the Combined Code on corporate governance – have come under scrutiny following the failure of several of the country’s financial institutions.

Some have called for a radical overhaul of the system to prevent a repeat situation, including making parts of the code mandatory. The Association of Chartered Certified Accountants, the global accountancy body, says in its submission to the FRC that the comply-or-explain approach is ‘excessively flexible’ and ‘inadequate’.

But large investor groups tend to support the existing system in their responses, including the Association of British Insurers (ABI) and Hermes Equity Ownership Services (HEOS), which operates the UK’s largest pension fund. The ABI says the UK system ‘has served us well and we continue to support the code’, while HEOS observes that the ‘comply-or-explain principle continues, in our view, to have significant merit.’

Both add that corporate reporting and disclosure by companies need to improve in quality. ‘We believe that, for it to work properly, boards need to demonstrate better that their behavior is in tune with the spirit of the code,’ writes HEOS in its submission.

IFRS implementation on track says FRAB

Society of Procurement Officers

The Financial Reporting Advisory Board (FRAB) published its 12th annual report, which highlights that satisfactory progress has been made to date by government departments in implementing the Treasury’s trigger point strategy for the application of EU adopted international financial reporting standards, from 2009-10.
The Financial Reporting Advisory Board (FRAB) today published its 12th annual report, which highlights that satisfactory progress has been made to date by government departments in implementing the Treasury’s trigger point strategy for the application of EU adopted international financial reporting standards, from 2009-10.
In its 2008 report the FRAB highlighted the need for government departments to ensure that they are prepared for the introduction of international financial reporting standards (IFRS), and warned that the implementation of IFRS, scheduled for 2009-10, should not be permitted to slip.
Commenting on the report, Chairman Elwyn Eilledge CBE, said:
“The implementation of IFRS is challenging, but the Board is pleased to note that the implementation of the Treasury’s trigger point strategy by departments is beginning to show satisfactory results. At this stage in preparations, satisfactory progress has been made in the first two trigger points, and the project remains on track for meeting the 2009-10 timetable. The production of ‘shadow’ IFRS based resource accounts for 2008-09 by departments represents the next key milestone in their preparation for the transition to IFRS. The shadow accounts will be subject to audit procedures.
The FRAB is particularly pleased to note that the Treasury has introduced additional corporate governance arrangements, involving Board representation, to oversee the final stages of the adoption of IFRS. The FRAB is encouraged by the progress made over the last year and will continue to monitor this project, offering its advice to the Treasury as required on any remaining IFRS issues, to ensure the 2009-10 timetable is achieved.”
The Board also reports that it has agreed the extension of its remit to include oversight of the Code of Practice on Local Authority Accounting in the United Kingdom, with effect from 2010-2011, when local authorities complete the move to IFRS-based financial reporting. The Board has made a number of changes to its terms of reference and membership to reflect this extension in the scope of its responsibilities.
The report acknowledges the Treasury’s efforts on ongoing issues of interest to the Board, in particular its work on the Alignment project.
The FRAB reports that the alignment proposals, agreed in principle by the Board, seek to improve the alignment of budgets, Estimates and resource accounts. These include a proposal to introduce changes to the departmental resource accounting boundary that will generally result in the consolidation of Executive non-departmental public bodies, which is something the Board has encouraged in previous reports.
Looking ahead, the Board expects to consider publications issued by the International Accounting Standards Board (IASB) and the International Public Sector Accounting Standards Board that may impact on future public sector accounting.

URL: http://nds.coi.gov.uk/

IT Risk, IFRS Transition Rank

IT Risk, IFRS Transition Rank among Internal Auditors’ Biggest Concerns

Gaining a better understanding of IT risk, international financial reporting standards (IFRS) and extensible business reporting language (XBRL) top the “to do” list for internal audit executives this year, according to the 2009 Internal Audit Capabilities and Needs Survey conducted by Protiviti, a global business consulting and internal audit firm. The survey report also shows ISO 27000 (information security) rounding out the top five concerns list, but indicates that internal auditors are becoming more comfortable with the data security and privacy measures companies are implementing.

This is Protiviti’s third Internal Audit Capabilities and Needs Survey. The 2009 survey had more than 1,000 participants – chief audit executives, internal audit directors, and managers from publicly traded, private, government, educational and nonprofit organizations – who hailed from virtually every major business sector, including financial services, insurance, real estate, energy, utilities, manufacturing, distribution, healthcare, technology, biotechnology, hospitality, retail and telecommunications. The participants answered 100 questions in three categories: general technical knowledge; audit process knowledge; and personal skills and capabilities.

Additional survey findings include:

Enterprise Risk Management most pressing for hospitality and life sciences companies was among the top-five “need to improve” areas in the general technical knowledge category.
For the first time, four fraud-related activities ranked among the key areas that needed the most improvement, with healthcare organizations expressing the most concern.
When it comes to personal skills, dealing with confrontation an area added to the 2009 survey – ranked the second highest “need to improve” area, following the development of board of directors and audit committee relationships.

Despite changes in the business environment, some feedback has remained stable during the survey’s three-year history – most notably in the personal skills and capabilities section. Developing other board committee relationships has taken the top spot in the category’s “need to improve” section every year of the Protiviti survey, while presenting (public speaking), developing outside contacts/networking, and developing audit committee relationships have held relatively consistent positions among the section’s top five rankings.

The survey was designed to chart internal auditors’ evolving business priorities and their skill sets. This year’s survey, which launched at the 67th Annual Institute of Internal Auditors’ International Conference, was conducted during the summer of 2008 and captured the opinions of industry-leading professionals through in-person and online surveys.

A complimentary copy of Protiviti’s 2009 Internal Audit Capabilities and Needs Survey is available at: www.protiviti.com/go/iacn3.

New technical tax articles online now

Essential reading for F6 and P6 students

Ensure you read these up-to-date technical articles, giving you guidance on specific parts of the tax syllabus, including what information you are expected to understand:

Corporation Tax
Paper P6 (UK)

Corporation Tax for Groups Pt 2
Paper P6 (UK)

International Travellers
Paper P6 (UK)

Capital Taxes
Paper P6 (UK)

Aggregate To Total Income
Paper F6 (MYS)

Taxation of Capital Gains
Paper F6 (PKN)

Ontario joins ICAP as a member

The Canadian province of Ontario has joined ICAP as its 29th member. John Gerretsen, Minister of the Environment, signed the ICAP declaration on 3 June 2009 .

In 2007, Ontario announced its Climate Change Action Plan for reducing greenhouse gases, of which cap and trade is an integral part. Ontario is a member of the Western Climate Initiative (WCI). For more information on Ontario efforts with regard to emissions trading, please visit Ontario's website