Home' A Plus Magazine : Feb 2013 Contents 8 February 2013
Hans Hooger vorst, the chairman of the International Accounting Standards
Board, has warned the United States that its continued delays in moving to
International Financial Reporting Standards will probably cost more than the
The U.S. also risks losing much of its influence over global standard setting
by not being a driving force for IFRS, Hooger vorst told securities analysts at a
conference in New York on 10 January.
Hooger vorst said investors are bearing huge costs for the process of trying to
compare and contrast the financial performance of companies around the world
using different standards. Those costs “are probably a lot bigger than the one-time
conversion cost that an economy has to make when it converts” to IFRS, he said.
The U.S. Securities and Exchange Commission has considered a move to IFRS
for some years, but recently appeared to cool on the idea of making the change.
SEC staff disappointed global rule-setters last year by issuing a final report on a
switch to IFRS with no recommendation.
Support for a switch has waned amid concerns about the costs and worries
that IFRS allows more management judgment than highly detailed U.S.
accounting rules. “I don’t see any signs of any imminent decisions in Washington,”
Hooger vorst said.
In November, the IASB proposed a new 12-member Accounting Standards
Advisory Forum, expected to become an important source of input to
international rules. Membership on the board requires a commitment to a single
set of global accounting standards, which would leave out the U.S.
Indian firms split over
proposal to cap audits
Indian accounting firms are divided over a
clause in the Companies Bill that would cap
the number of companies that can be audited
by a single firm at 20. Big Four firms, which
audit 55 percent of Indian public companies,
want the scope of the provision to be restricted
to public companies, while small and mid-tier
firms favour the cap to be applied to all clients,
India’s Business Standard newspaper reported.
The lower house of parliament has passed the
bill, while the upper house is likely to take up
the bill for passage in the next session, which
begins next month.
Schroders gives KPMG
mandate to audit books
Asset manager Schroders has selected KPMG
as its new auditor, ending a relationship with
PricewaterhouseCoopers that lasted more
than 50 years. Schroders paid PwC £3.1 mil-
lion for audit and audit-related work plus an-
other £1.6 million for unrelated work in 2011.
KPMG won the mandate after a tender process
that started last year.
Australian, NZ bodies
launch joint programme
The Institute of Chartered Accountants in Aus-
tralia and the New Zealand Institute of Char-
tered Accountants are set to launch their joint
Chartered Accountants Programme this month,
the ICAA’s monthly magazine reported. The
new programme consists of five modules of
learning materials that are almost all common
to both countries and a single set of require-
ments for mentored practical experience.
are sought after in U.S.
An employment survey in the United States last
month showed that 68 percent of the most re-
cent accounting majors received job offers — the
highest percentage of any major nationwide.
The National Association of Colleges and Em-
ployers report stated that the unemployment
rate for accountants stood at just 4.1 percent at
the end of 2012, the Salt Lake City Deseret News
Auditors face legal action over alleged
failure to scrutinize troubled loans
The United States Securities and Exchange Commission charged two KPMG
employees with failing to uncover problems at a bank that later failed.
It is the first time the commission has taken action against auditors in a case
related to the global financial crisis.
The two KPMG auditors, John J. Aesoph and Darren M. Bennett, failed to
adequately scrutinize bad-loan reser ves at TierOne Bank in Nebraska, the SEC said
in an administrative proceeding. The action could result in the two auditors losing
their right to audit public companies.
TierOne hid millions of dollars in losses on troubled loans made during the
height of the financial crisis before the bank eventually failed in 2010, according to
the commission, which filed suit against three TierOne executives last year.
The SEC case against the auditors, more than four years after the crisis, revives
lingering questions about whether auditors did enough to prevent questionable
practices and whether authorities have done enough to hold them to account.
KPMG does not face any action in the TierOne case.
U.S. delays on IFRS to be
expensive, says Hoogervorst
Washington faces sidelining in future
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