neoaccounting

Despite its reputation for fiscal prudence, Germany appears determined to stick with a cash-based rather than an accruals system. Why is this? Despite its reputation for fiscal prudence, Germany appears determined to stick with a cash-based rather than an accruals system. Why is this? Something strange was recently flagged up in Germany’s government accounts. The finances looked good, dazzling even; finance minister Wolfgang Schäuble had just booked in millions of euros in revenue from the sale of federal bonds. But things weren’t really as they seemed, explained German newspaper Die Welt, citing analysis by firm Barkow Consulting. Like any other country, Germany issues sovereign bonds to raise money. It can also issue additional bonds under the terms of a previous offering. In an era of low interest rates, the latter offers a higher rate of return than issues that are new. Investors pay for this privilege with a premium on the price of the bond, which works to br...

Cutting through the technology hype to drive real change in the audit, Hermann Sidhu, assurance partner, EY There are few industries that haven’t been gripped by the hype around emerging technologies. Within audit, data analytics, artificial intelligence (AI) and robotics are already driving radical transformation in the profession. And like many organisations, EY is investing in developing tools such as bots, drones and AI applications that put emerging technology into practice.  But it is about more than just building technology; it’s about moving the process forward. And it’s about how auditors can utilise the best of what technology can offer to drive quality and deliver on its mandate to provide trust and confidence to the capital markets.  At EY, the big challenge is cutting through the hype to understand the real impact this emerging technology can have for our clients and the capital markets, now and in the future. Technology for technology’s sake is not going to i...

A successful digital transformation programme will reinvent and reinvigorate the organisation We can all agree that digital transformation is the phrase of the moment and, along with cybersecurity, the number one topic of importance to senior technology leaders in business today. Recent research from Source Global Research states that 79% of UK consultancy clients believe that they will increase investment in consulting to help support digital technology work, with 77% planning to invest more in data and analytics.  A successful digital transformation programme will reinvent and reinvigorate the organisation, increase employee engagement, extend competencies and efficiencies, bring sustainable long-term cost savings and most importantly, create a unified, inspired and collaborative workforce along the way.  Implementing a successful digital transformation programme is potentially a lengthy and complex process, but one that is certain to bring dividends. Many companies are ...

The way governments account for the profits made from commodities like oil can encourage unsustainable behaviour, according to the Goa Foundation. Should accounting rules be changed? Norway's sovereign wealth fund, filled with the country's oil cash, is the biggest in the world in terms of assets under management.   The perils – and tensions – over how pension liabilities are treated in government accounts are well known. But according to one Indian NGO, another accounting anomaly, with implications not just for financial sustainability and intergenerational fairness, but the environment, corruption and even the accuracy of GDP figures, is slipping comparatively under the radar. Rahul Basu of the Goa Foundation told  PF International  that a relatively simple accounting change could alleviate “much of the resource curse”, help countries avoid significant volatility in their finances and prompt the perspective change on resource extraction needed to stem climate cha...

The IFRS Foundation has today published the 2017 edition of its  Pocket Guide to IFRS ® Standards: the global financial reporting language .  The Guide shows continuing progress towards further enhancing the quality of IFRS Standards and increasing adoption around the world. The Pocket Guide provides an overview of the progress towards adoption of IFRS Standards in 150 jurisdictions around the world and includes information about the Standards and the organisation. This year’s Pocket Guide summarises key developments in the standard-setting over the past year and notes a growing number of jurisdictions requiring the use of IFRS Standards. Of the 150 jurisdictions studied to date, 126 (84 per cent) require IFRS Standards for all or most domestic listed companies and financial institutions. Another 13 jurisdictions (9 per cent) permit or require the Standards for at least some of those entities. During the past year, profiles on the use of IFRS Standards in ten...

15 Aug 17 The Asian Development Bank has issued two types of green bond, raising $1.25bn to finance climate change projects. For the first time it has offered a five-year green bond alongside 10-year green bonds. ADB treasurer Pierre Van Peteghem said the bank needed to respond rapidly to growing demand for green bonds. “We have found the dual-pronged approach…to be an efficient means of reaching ethical investors active at different segments of the yield curve," he said. "This approach means that ADB is reaching an increasing number of investors who understand the importance of the green label.” A total of $750m was raised through the issue of the five-year bond, and $500m through the 10-year bond. Money raised will fund low carbon and climate resilient projects funded through the bank’s capital resources and used in its non-concessional operations. In 2015, the ADB announced its ambition to double its annual climate financing to $6bn by 2020. Of this, ...

Malta’s ministry of finance is working towards introducing accrual accounting to all government departments over the next two and a half years. The Maltese government signed a deal last month awarding financial services firm Grant Thornton Malta the contract to implement the system, worth an estimated €11.6m. Finance minister Edward Scicluna tweeted on the day:   Rob Whiteman, chief executive of CIPFA, said: “Importantly, the Maltese government’s ambition is to make full use of the information it generates. "The transition from cash to accrual accounting is a key part of strengthening a country’s public financial management and accrual based information should be used to inform the budgetary decision making which will improve fiscal sustainability, good governance and transparency.” As well as implementing the Corporate Financial Management Solution system over the next 30 months, the Maltese government has promised to provide intense training for existing and new...

When it comes to fee income from auditing charities, Crowe Clark Whitehill has no equal, according to the latest annual Charity Financials audit league table The top 20 firm has come top of the table for the ninth year in a row, beating 892 other audit firms with its 8.2% market share. It has 240 client charities with a combined audited income of £4.8bn, which brings in an annual fee income of £5.7m. Commenting on the results, CCW head of non profits Pesh Framjee said that the firm was delighted to have retained its title in an increasingly competitive market. “Charities are facing challenging times. Cost escalations, finding pressures, public trust, political uncertainty and increased demand all impact on what charities do,” he added. “Auditors who know the sector and understand the challenges can add value that goes beyond a signature on an audit report.” The league table is compiled from the list of the top 5,000 charities. To be included in the list, the chari...

Previous articles I have posted on Room 151 have dealt with strategies and behaviours that local authorities can apply in setting their budgets; but this is only part of the challenge.  Setting a budget is one thing but achieving delivery is where the real hard work comes in. If organisations are to achieve success in their financial management, budget setting needs to be realistic rather than aspiring and there also needs to be a strategy for in-year delivery. When budgets are set, overspending is a key risk and some public-sector organisations struggle to balance the books in-year. Trying to keep in-year spend within budget across organisations can be a herculean task and addressing all elements of a budget of £200m or more, may not get the desired result.   To achieve a successful outcome you may consider a risk-based approach that focuses on areas most likely to overspend. This is not to say that rigour must not be applied to all areas of spend through the stan...

The majority of business leaders rely on accountants to make finance decisions, a new survey has found According to a survey of 3,874 managers, directors and C-level post holders by business finance company MarketInvoice, 56% said that accountants were their most important external advisers when considering business finance options. Only 23% of them relied on commercial finance brokers and only 3% would consider speaking to a bank directly. The survey found that 38% of business leaders expect a cash squeeze in the next six months. They said they would ask for support and guidance from accountants over this period, and would turn to invoice finance (35%), bank overdrafts (30%) for additional funding and business credit card s (7%). In a bid to cut costs, business leaders said they would put expansion plans on hold (34%), delay launching new products (33%) and reduce marketing spend (20%). Darvish Heshejin, head of partnerships at MarketInvoice, said, “Accountants and c...

The impact of a hard Brexit on the financial services (FS) sector should not be underestimated Under the EU single market for financial services, a firm can use its regulatory authorisation in one EU state (or EEA state under some directives) to passport into other member states through establishing a branch or providing services on a cross-border basis. Simply looking at the number of organisations affected by the loss of passporting illustrates the scale of the challenge: as set out in  a letter  from the Financial Conduct Authority  in August 2016, the number of firms using passporting (inbound and outbound and not limited to banks and insurers) totalled 13,484. It is possible that agreement will be reached with the EU which will allow UK banks and insurers continued access to EU markets without the need for local authorisation or approval (and vice versa). This will however be dependent on political will and the outcome may remain unknown until cl...

On 5 September 2017, the Hong Kong Institute of CPAs and the IASB will host a joint outreach event in Hong Kong on the IASB dis­cus­sion paper DP/2017/1 'Dis­clo­sure Ini­tia­tive — Prin­ci­ples of Dis­clo­sure'. The event will cover main elements of the  dis­cus­sion paper , including: “what con­sti­tutes effective com­mu­ni­ca­tion in the financial reports;” “what con­sti­tutes fair pre­sen­ta­tion of per­for­mance measures such as EBITDA;” “when, where and how financial in­for­ma­tion should be disclosed.” For more in­for­ma­tion, see the  press release  on the IASB’s website.

Danny Bakhshi, the chief financial officer of the Isle of Man’s largest telecoms provider, has been suspended pending criminal investigations In a statement released on Thursday, the company explained that Bakhshi was subject to a criminal investigation that was not related to his role at Manx Telecom. Reports from the FT suggested that Mr Bakhshi appeared before the Isle of Man's Court of Justice on Tuesday, over allegations of his involvement after a Class B substance from Amsterdam was intercepted by a customs official. “In accordance with company procedure, the board has suspended Mr Bakhshi on a precautionary basis pending investigations being carried out,” a statement from Manx Telecom read. “The board will keep his suspension under review and will aim to make the period of suspension no longer than is reasonably necessary,” it added. During his suspension, chief executive officer Gary Lamb will step in to act as interim CFO. Bakhshi originally...

Embracing analytics In this second article in a series on the digital CFO, ACCA and PwC look at how the finance team can use data to align themselves with strategic goals In the economic downturn of the late 2000s, many organisations focused on cost-cutting and austerity, strengthening balance sheets and building reserves of working capital. With increasing competition and disruption in the market, and ongoing economic and political uncertainty, organisations are still trying to invest to achieve sustainable growth. To succeed, they have to focus on a clear strategy, and consider how digitisation can underpin that strategy. Yet the challenge remains of where to make the most appropriate investments. Growth today comes from focusing on core capabilities. Businesses often focus on investing where they will achieve the greatest return, so they need to have a clear understanding of the markets, products and channels where they achieve the most significant returns. With the emer...

Agency says more than a dozen estates traced to Alison-Madueke. Nigeria seeking court ruling for forfeiture of the assets. Diezani Alison-Madueke (Photographer: F. Carter Smith/Bloomberg) Nigeria’s anti-graft agency said it traced at least $615 million of allegedly illegally acquired cash and properties to the West Africa nation’s former oil minister, Diezani Alison-Madueke. In addition to “boxes of gold, silver and diamond jewelry, worth several million pounds” found at her residence, the Economic and Financial Crimes Commission identified more than a dozen buildings across the country worth more than $500 million owned by the former minister, the agency said in a statement on its website on Wednesday. On the strength of the evidence it has gathered, the EFCC said it will ask federal courts to order that the assets be forfeited to the government, according to the statement. Alison-Madueke has previously denied any wrongdoing, and calls to her mobile phone for comment didn’t conn...

The IFRS Foundation and the Malaysian Accounting Standards Board (MASB) are jointly hosting an IFRS conference at the Hilton Hotel in Kuala Lumpur on Friday 8 September 2017.  This one-day conference will bring together representatives of the International Accounting Standards Board (the Board) who will discuss IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases. The speakers will focus on practical implementation issues and challenges of these new Standards. The conference will also provide unique insight into standard-setting projects and enable participants to hear about financial reporting—directly from the people who set the Standards. Friday 08 September 2017 Starts: 09:00  Ends: 18:00 Hilton Kuala Lumpur Hotel, 3, Jalan Stesen Sentral 5, 50470 Kuala Lumpur, Malaysia Further information Presenters include Board Member Mary Tokar, Director of Education Matt Tilling and Senior Technical Manager Kathryn Donkersley. The speakers will also pro...

The majority of accountants would not like to see corporation dress codes being ruled out, new research has found Despite several  banks relaxing their dress code policy  recently to attract new talent, 66.7% of accounting professionals think businesses should not get rid of dress codes within the workplace, the job board CV-Library revealed. Of the 1,200 workers surveyed, 72.9% disagreed with the statement that the traditional dress codes are out-dated and said they enjoy following a dress code. Moreover, almost half (48.6%) of accountants said that dressing smart makes them look more professional to clients, while 28.6% said that it makes them feel more professional. However, 83.3% said they appreciate that workplace dress codes have changed over the years, and 50% believe dress codes will become more casual and relaxed in the future. In an internal memo seen by Reuters last month, Goldman Sachs told staff in its tech division to "exercise judgment in deter...

The top 25 accountancy firms have seen their revenues grow by 3% last year despite the uncertain economy and competition for the best talent challenging the sector Caption: The Big Four continued to dominate the market last year, after posting a 3% increase in combined revenues to $188.53bn (£143.4bn), Accountancy’s global accounting networks and associations 2017 survey found. Revenues across most of the biggest accountancy firms grew last year in spite of increasing challenges caused by a difficult business environment, geopolitical uncertainties and huge disruption to business models. Despite efforts to encourage business to look at the mid-tier market, the revenues of Deloitte, PwC, EY and KPMG accounted for 67% of the total top 25 income. Deloitte saw its revenues grow 4.5% to $36.8bn,  taking the number one spot from PwC , which recorded revenues of $35.9bn, after a more modest growth of 1.53%. EY came in third place with $29.63bn (up 3.3%) and KPMG f...

This report details the results of new study that surveyed citizens across the G20 on issues of trust and international taxation. Prepared by the Association of Chartered Certified Accountants, Chartered Accountants Australia and New Zealand, and IFAC, the study draws on the views of more than 7,600 people across G-20 countries. Some of the key findings include: people want governments to put tax cooperation ahead of tax competition—73% of people in G20 countries think it is important or very important for governments to cooperate with each other on tax policy to create a more coherent international tax system; 57% of people in G20 countries trust or highly trust professional tax accountants as a source of information about the tax system; and in contrast, people in G20 countries have become deeply distrustful of politicians when it comes to information about the tax system, with 67% either distrusting or highly distrusting politicians.

In furtherance of the provisions of the Financial Reporting Council of Nigeria Act No. 6, 2011; The Council hereby invites you to comment on the following projects: Invitation to comment on  Tentative Agenda Decision and comment letters—IFRS 3 Acquisition of a group of assets that does not constitute a business.   Comments should reach the Council not later than August 10, 2017.   DOWNLOAD NOW  or from IASB’s website: www.ifrs.org Invitation to comment on  Tentative Agenda Decision and comment letters—IAS 37 Costs considered in assessing whether a contract is onerous.   Comments should reach the Council not later than August 10, 2017.   DOWNLOAD NOW  or from IASB’s website: www.ifrs.org Invitation to comment on  Tentative Agenda Decision and comment letters—IAS 38 Goods acquired for promotional activities.   Comments should reach the Council not later than August 10, 2017....

The International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) have jointly published Creating Value for SMEs through Integrated Thinking: The Benefits of Integrated Reporting highlighting how SMEs can benefit from integrated thinking and reporting and noting that the IIRC’s principles-based framework is deliberately flexible so that SMEs can apply it to their own specific circumstances. Access to the publication is available through the press release on the IFAC website. The IIRC has also published its own integrated report pointing to how integrated reporting is becoming more widespread around the world. The 22 page report also demonstrates the organisation’s own learning journey as it has been streamlined and made more concise than last year’s report (50 pages). Please click for access to the report on the IIRC website. The American Institute of Certified Public Accountants (AICPA) has issued Attestation Engagements o...

The Institute of Chartered Accountants in England and Wales (ICAEW) has released a report 'Disclosure quality and international comparability under IFRS: evidence from pension discount rates, impairment and capitalisation of development costs' that argues that non-comparable disclosure under IFRS is a problem. The report is addressed to practitioners such as financial analysts, finance directors, audit partners and IFRS technical departments in audit firms to alert them to the findings of an investigation into international differences in IFRS practice. Data was collected from over 500 firms in 15 countries. Of the three areas investigated (pension discount rates, impairment charges and capitalisation of development costs), the topic with the largest amount of non-comparable disclosure was pension discount rates: only 67% of financial statements examined were found to be comparable for analysis. The authors note that pension discount rates were often not distinguished by...