An at-a-glance round-up of the latest accounting news.
- APB finalises guidance bulletins
- HMRC acts to clear up NCD confusion
- Interpretation to applying restatements in hyperinflationary economies
- Mid-market advisory firm of the year
- Andersen's Enron indictment dismissed
- EMI guidance updated
- Offshore gains interpretation postponed
- Financer guilty of £76 million tax fraud
- Taxpayers' bill for Rover collapse will be £231 million
- New chairman for tax rewrite committee
- UHY Hacker Young seeks apprentices
- £1.6 million spent on MG Rover inquiry ' so far
- Sales volumes up but what about the value?
- Inflation fall sparks interest rate speculation
- Cheque clearance times under scrutiny
- HMRC engages top UK companies in dialogue
- Public supports scrapping juries in corporate fraud trials
- Deloitte launches Academy for company directors
- Simplified pensions ' Online filing not immediately mandatory
- New social security rules for couples
- DWP consults on pension protection regulations
- London company wins Refco auction
- KPMG trial date set
- Chart topping accountant
- Hard times ahead says KPMG business survey
- New user guide to IAS 32, IAS 39 and IFRS 7
- Work gives life meaning for many
- Women spurn 9 to 5
- Green light for first skills academies
- Direct payment of tax credit will save businesses £115 million
- NASA accounts grounded
- PwC announce record global revenues
- Sales slump continues
- Tax shelters blip ' settlement near
- Only 12% of firms ready for 'A' Day
- ICAEW launches Financial Strategy diploma
- Knock knock visits by HMRC
- Cautious thumbs up for tax system
- New guide to tax treatment of childcare perks
- IASB considers role in improving management commentary
************************************************************ Bulletin 2005/3 ' Guidance for Auditors on First-time Application of IFRSs in the United Kingdom and the Republic of Ireland ' and Bulletin 2005/4 ' Auditor's Reports on Financial Statements in Great Britain and Northern Ireland ' were issued pending agreement on describing the EU-endorsed financial reporting framework based on IFRSs. Richard Fleck, APB Chairman said: 'The wording of the example auditor's reports in Bulletin 2005/4 is based on current legislative requirements. The APB recognises that these examples will have a relatively short shelf life and will need to be revised when the Company Law Reform Bill, presently before Parliament, is enacted.' Bulletin 2005/3 is available from: http://www.frc.org.uk/apb/publications/pub0973.html and Bulletin 2005/4 from: http://www.frc.org.uk/apb/publications/pub0972.html * * * The move follows confusion over the contents of CT3002 and an Internet article published on 26 April, which has led to the carry forward of excess NCDs not being interpreted correctly. Further guidance is now available at: http://www.hmrc.gov.uk/news/ncdr-guidance.htm * * * IFRIC 7 ' Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies clarifies the requirements relating to two issues that had been raised with the IFRIC:
Subscribers to the IASB's Comprehensive Subscription Service can view the Interpretation from the secure online services area of the IASB's Website: http://www.iasb.org * * * * * * Andersen was convicted of obstructing justice by destroying Enron-related documents in June 2002. The case caused the collapse of the former 'big five' company. But the conviction was overturned by the Supreme Court in May because instructions to the jury were too vague. * * * EMIs are tax-advantaged share options governed by Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003, although companies granting them might also be affected by other company or regulatory legislation. Companies with gross assets of less than £30 million can make tax-advantaged share options of up to £100,000 to qualifying employees. They must be granted for the commercial reason of recruiting or retaining the employee and cannot be part of a tax avoidance scheme. For further information: click here * * * The change was announced in Tax Bulletin 79. It is considered that an offshore income gain computed under section 761 Income and Corporation Taxes Act 1988 does not fall within the definition of eligible investment income under section 842. However, HMRC has conceded that more time is needed to consider the full impact of the change and has said that it will now apply to accounting periods beginning on or after 1 January, 2007. For more information about the proposed change: click here * * * The complex fraud involved a company purchase scheme. Leaf bought 13 UK subsidiary companies which, at the time he bought them, held enough cash to pay outstanding tax liabilities from past profits. But instead of using the money to settle the companies' tax bills, he created fictitious documents from a bank registered in the Pacific island of Nauru, which showed the companies had borrowed huge sums of money. The fabricated interest payments were then offset against tax. According to HMRC: "It was also falsely claimed that these loans were used to undertake massively profitable foreign exchange deals, not subject to UK tax out of which where paid dividends, which he then falsely used to reclaim corporation tax rightly paid by the companies before he purchased them." Leaf will be sentenced on 1 December 2005 and confiscation proceedings will follow. * * * The costs include paying compensation to workers who lost their jobs, retraining former Rover employees, and money to help the wider supply chain. Some of the money has already been spent, and the rest is expected to be used over the next three years, said the minister. * * * * * * Managing partner Ladislav Hornan believes one of the most effective ways to achieve growth is by attracting dynamic young partners into the business. Prospective candidates for the handful of partnerships on offer should contact Ladislav Hornan on 0207 216 4600. * * * In a reply to a Commons question, DTI minister Gerry Sutcliffe said that expenditure by the end of September had risen to £1.6 million. The DTI expects the inquiry to reach its conclusions within two years ' but government-commissioned inquiries can take much longer. The investigation is being led by Guy Newey, QC, and Gervase MacGregor, head of forensic accounting at BDO Stoy Hayward. In his answer Mr Sutcliffe said: "The accountant inspector has a team of junior staff working for him, retrieving, copying, logging and analysing documents. The costs of the inspection are inherently front-loaded because of the need to obtain the records and financial information at the outset." * * * The volume of sales in the third quarter of 2005 was 0.7% higher than in the previous quarter and follows growth of 0.4% during the three months ending in September. Compared to the same quarter a year ago growth in sales volumes was up by 1.1%. The sales volumes for October 2005 were 1.5% higher than October 2004. But the unadjusted value of retail sales between August and October was only 0.2% higher than the same period a year ago. * * * * * * Earlier this year, the Task Force secured an agreement from banks to reduce electronic payment clearing times to one day, for telephone and internet transactions. The new electronic payment system is due to be launched in 2007. * * * * * * Although 89% of respondents in the KPMG survey believed that the right to trial by jury is 'fundamental', 49% said that in serious fraud cases, they would support the Government's move to amend the Criminal Justice Act to allow judges rather than juries to hear cases. Just 28% were opposed to the move, and 23% were undecided. * * * "Business leaders are currently facing an unprecedented volume of change," said Martin Eadon, Deloitte's Chief Operating Officer, commenting on the launch. "It is vital to the competitiveness of UK business that directors are able to deal with these changes effectively. They are responding to this challenge by investing more time to understand their obligations and to ensure they are able to discharge their responsibilities appropriately. Our response is to support them with the Deloitte Academy." The Academy, which will be free to members, opens from 14 November. The full programme starts in January 2006. * * * In a written ministerial answer, he explained that although the new simplified pensions regime starts on 6 April 2005, the IT systems that support the new regime will be phased in over 2006 and 2007, adding that the 'vast majority' of pension schemes and their members would not be affected by the delay. "Pension scheme administrators and practitioners will be able to meet most of their statutory filing requirements online at the time that they are required," he said, "but paper returns and reporting will also be offered as a supplementary means of filing for a limited period." HMRC has issued a newsletter giving further details of the statement. It can be found at: http://www.hmrc.gov.uk/pensionschemes/newsletter6.htm * * * The new statutory instruments, which amend existing social security rules, have been issued as a result of the Civil Partnership Act 2004. They apply to civil partners and couples who are living as civil partners, and take effect from 5 December 2005. The full text of the new rules can be downloaded from the HMRC website. * * * Comments are invited on the 10 sets of regulations that relate to: the technical aspects of the PPF levies, valuation of the PPF, transferring a scheme to the PPF's Board, reviewing the Board's decisions, compensation and PPF information and administrative functions. The PPF has been set up to provide statutory compensation to members of a defined benefit occupational pension scheme where the employer has become insolvent and the scheme is under funded. Full details of the regulations under consultation can be found at: http://www.dwp.gov.uk/consultations/2005/ the closing date is January 3, 2006. It is expected the regulations will come into force in April 2006. * * * The $282 million (£162 million) cash sale price was for Refco's regulated futures brokerage in the US, Canada, Asia and UK. It includes the assumption of $41 million in liabilities and other considerations. But because Man Group is only buying the assets, Refco retains its regulatory capital of $746 million. Man Group will be issuing further details about the acquisition with its interim results on November 17. Judge Robert Drain agreed the deal in the US bankruptcy court, allowing interested parties just 24 hours to object. Hours later, former Refco CEO Phillip Bennett was indicted on eight further charges, including conspiracy and fraud. Some of the charges carry a 20-year jail sentence. * * * Of the 18 defendants indicted so far, all have pleaded not guilty. Their trial date has been set for May 1, 2006 and it's expected the trial will take between three and six months. Meanwhile, a judge in one of the civil cases that have been brought against KPMG has refused to rule whether the tax shelters, known as Blips, were illegal until the criminal case has ended. * * * His previous positions includes finance director of Rothmans, the cigarette company. * * * KPMG predicts that the harsh trading conditions will continue well into the New Year. In particular, retail and manufacturing sectors are battling against tough conditions, but the building and construction industries are outperforming other sectors, with a decrease in negative announcements. * * * The guide covers IAS 32, IAS 39, IFRS 7 and IFRIC Interpretation 2. There is also an overview of IFRS 1 - the standard on first-time adoption of IFRSs - to help those who are applying IFRSs for the first time. Printed copies of the guide (Financial Instruments - Reporting and Accounting: A user's guide through the official text of IAS 32, IAS 39 and IFRS 7) are available priced £38 including postage, from the IASCF Publications Department, 30 Cannon Street, London EC4M 6XH. Tel: 020 7332 2730. E-mail: [email protected] Web: www.iascfoundation.org * * * * * * Eighty-seven per cent of employers do not have a specific attraction and retention plan in place targeted at women and mindful of their demands. Whilst 85% of employers believe they are actively committed to providing flexible working opportunities, just 58% of employees believe it is an option in their company, highlighting a serious gap between perception and reality. * * * * * * Paymaster General Dawn Primarolo said: "Payment of Working Tax Credit by employers has helped reinforce the message that work pays. However, the Government is committed to reducing regulatory burdens wherever possible, and following consultation with employers we are from [7 November] starting to replace payment of Working Tax Credit through employers with direct payment to claimants. This will save businesses up to £115m every year from next April. New applicants for the Working Tax Credit will be paid directly by HMRC and not by the employer. Over the next few months all payments will be transferred from employers to HMRC, with the switch due to be completed by March 31. * * * Problems include a failure to hire skilled, well-trained financial personnel; and NASA's core financial management system, purchased in 2000, which has allegedly failed to improve contract management, produce credible cost estimates or produce auditable financial statements. NASA is not the only US agency experiencing problems with financial management system problems. Many federal financial modernisation efforts have exceeded budgets, run late and failed to deliver the anticipated functionality. * * * The firm's just-published 2005 Global Annual Review also shows that net aggregate revenues totalled US$19 billion for the year, and double-digit growth was achieved in each client segment in every industry sector. PwC's Global CEO, Samuel A. DiPiazza Jr, said that the revenue increase was driven by increased demand, new regulatory requirements in a number of major capital markets and by a favourable global economic climate. He said the continuing expansion of emerging economies in Asia and South America also fuelled overall growth. The Review can be downloaded from the PwC website * * * Retailers are hoping that Christmas spending will slow the rate of decline. But five months of weak retail sales are impacting on wholesalers, who are finding themselves with surplus goods and are cutting orders to manufacturers. Grocery and specialist food were the only sectors to have seen growth for two months in a row. Durable household goods recorded their weakest sales on record. Motor traders experiencing the worst month for six years * * * KPMG has agreed to pay $225 million (£127 million) in compensation ' an average of $750,000 per investor. * * * The full report can be downloaded from the * * * More details are available from the Oxford Sa¯d Business School website, or by phoning Tracy Reeves at Oxford on 01865 288809. * * * * * * "It is good news that the UK tax system is considered satisfactory for enterprise by a significant proportion of businesses," said Kevin Nicholson, UK head of enterprise and private companies and clients at PwC. "This may be partly attributed to a number of initiatives introduced by the Government to support business enterprise - for example, low headline tax rates and tax incentives such as 10% taper relief and tax credits for research and development." However, the firm adds that the tax administration system is still "confusing and complex", especially for smaller businesses, and more work needs to be done to ease the burden. * * * The guide can be dowloaded from the HMRC website. * * *
APB finalises guidance bulletins
The Auditing Practices Board has finalised two bulletins that were issued as interim guidance earlier this year.
HMRC acts to clear up NCD confusion
HMRC has issued new guidance on its non-corporate distribution (NCD) rate.
Interpretation to applying restatements in hyperinflationary economies
The International Financial Reporting Interpretations Committee (IFRIC) has issued an interpretation to applying restatements in hyperinflationary economies.
Mid-market advisory firm of the year
McInnesCorporateFinance (MCF)has been voted 'mid-market advisory firm of the year' by a poll of 1,000 of Yorkshire's leading corporate dealmakers. MCF became part of AIM-quoted insolvency and corporate recovery specialists Begbies Traynor Group in May.
http://www.begbies-traynor.com/
Andersen's Enron indictment dismissed
The US press is reporting that moves have begun to dismiss the indictment against Enron's former accounting firm Arthur Andersen with federal prosecutors asking for the case to be returned to a lower court.
EMI guidance updated
HMRC has updated its guidance on Enterprise Management Incentives (EMIs). The IR2006 booklet has been withdrawn.
Offshore gains interpretation postponed
HMRC has announced that the proposed change to the interpretation of offshore income gains, due to start on January 1, 2006, has been postponed for a year.
Financer guilty of £76 million tax fraud
Following an eight year investigation by HM Revenue & Customs, financier Ian Andrew Leaf has been found guilty at Southwark Crown Court of a £76 million fraud.
Taxpayers' bill for Rover collapse will be £231 million
Trade and Industry minister Ian Pearson has told the BBC that approximately £231 million has been set aside by the Government to pay costs associated with the Rover collapse.
New chairman for tax rewrite committee
Lord Newton of Braintree will be the new chairman of the Steering Committee of the Government's Tax Law Rewrite project , from the start of 2006. A former Conservative minister and former Leader of the House of Commons, Lord Newton will replace Lord Howe of Aberavon, who is stepping down after eight years.
UHY Hacker Young seeks apprentices
Accountancy group UHY Hacker Young has launched its own version of the BBC hit, The Apprentice.
£1.6 million spent on MG Rover inquiry ' so far
A few months into the MG Rover inquiry and the bill is already steaming towards the £2 million mark.
Sales volumes up but what about the value?
New figures from the Office of National Statistics reveal there has been a modest growth in sales volumes between August and October following a period of no overall growth from late 2004 to mid 2005.
Inflation fall sparks interest rate speculation
Inflation in the UK has fallen for the first time in a year, prompting City speculation that the Bank of England may reduce interest rates. The annual consumer price index fell from 2.5% in September to 2.3% in October. Market reaction saw sterling fall to a two-year low against the dollar as traders adjusted yield speculations.
Cheque clearance times under scrutiny
The impact of cheque clearing times on businesses is being examined by the Payment Systems Task Force, chaired by the Office of Fair Trading. A working group has been set up to look at a range of issues relating to cheques, including the benefits for consumers and businesses of speeding up cheque clearance times. The group is due to report next summer.
HMRC engages top UK companies in dialogue
As part of the 'Tax in the Boardroom' agenda, HMRC has written to chairmen of the top 500 companies in an effort to establish a dialogue on tax. An HMRC spokesperson says this is a customer service initiative, designed to help HMRC understand what each company does, and 'help the company to fulfil its obligations'.
Public supports scrapping juries in corporate fraud trials
A majority of people would support the scrapping of juries in corporate fraud trials, new research by KPMG has revealed.
Deloitte launches Academy for company directors
Deloitte has launched an Academy for UK public company board directors, which will provide technical training and guidance on a range of management and governance issues.
Simplified pensions ' Online filing not immediately mandatory
Filing pension information online will not be mandatory for at least six months, the Economic Secretary to the Treasury Ivan Lewis has announced.
New social security rules for couples
HM Revenue & Customs has issued new social security regulations which provide for civil partners to be treated the same as married couples for National Insurance purposes.
DWP consults on pension protection regulations
The Department for Work and Pensions has started consulting on a raft of regulations which govern the Pension Protection Fund (PPF).
London company wins Refco auction
London-based hedge fund firm Man Group has emerged as the winning bidder for failed commodity broker Refco after a 21-hour auction.
KPMG trial date set
The end is in sight for the criminal element of the KPMG bogus tax shelters saga ' but it could take another year.
Chart topping accountant appears in Times Power 100 list of the most influential people in business
Topping the accountant charts at no 11 (the highest position an accountant has climbed) Jan du Plessis is non-executive chairman of British American Tobacco, is also non-executive chairman of food supplier RHM and non-executive director of Lloyds TSB.
Times Power 100
Hard times ahead says KPMG business survey
KPMG's latest quarterly business survey reveals that negative announcements for Quarter 3 are up by 6% across all sectors and are the highest so far this year. The figures, compiled by Mandis Information Services Ltd for KPMG Restructuring, report the number of businesses making negative announcements of any kind including profit warnings, redundancies and significant restructuring.
New user guide to IAS 32, IAS 39 and IFRS 7
The International Accounting Standards Committee (IASC) Foundation has published a user's guide to the standards on financial instruments issued by the International Accounting Standards Board (IASB).
Work gives life meaning for many
A new survey reveals that for many employees work gives them a sense of meaning in their life.
The survey released by Penna, the human capital management consultancy reveals that organisations that devote resources towards creating meaning at work can anticipate increased motivation (55%) loyalty (42%), pride (32%) and productivity (20%).
Women spurn 9 to 5
Over half (54%) of female workers have turned their back on the traditional 9 to 5 working routine.
Green light for first skills academies
Four UK industries: manufacturing, construction, food and drink, and financial services have been given the go-ahead to set up the first National Skills Academies.
Direct payment of tax credit will save businesses £115 million
The change to direct payment of Working Tax Credit, which is being phased in over the next five months, will save businesses between £110 million and £115 million a year from April 2006, claims the Government.
Click http://www.gnn.gov.uk/Content/Detail.asp?ReleaseID=176350&NewsAreaID=2
NASA accounts grounded
In a senario all to familiar this side of the pond, the US Government Accountability Office (GAO) says the accounts of the US government space agency NASA are unauditable and that the aeronautics agency has failed to fix most of the 45 accounting and financial management problems highlighted in previous audits.
PwC announces record global revenues
Global revenues at PricewaterhouseCoopers (PwC) reached a record US$20.3 billion in the year ended 30 June 2005, an increase of 17% on the previous year.
Sales slump continues
Conditions on the high street remain gloomy, says the CBI's latest distributive trades survey. The quarterly underlying sales trend remains static. However, figures for October shown a slight improvement on September's record low.
Tax shelters blip ' settlement near
A US federal judge has granted preliminary approval for a settlement deal in one of the KPMG tax shelter cases.The deal covers about 275 of the 600 investors who took out the bond-linked issue premium strategy ' otherwise known as Blips ' which the US Internal Revenue Service (IRS) has declared abusive.
Under US law the compensation cannot cover back taxes or IRS penalties. The investors covered by the deal are represented by the law firm of Milberg Weiss Bershad & Schulman, which will earn around $30 million from the case.
Only 12% of firms ready for A Day
A survey by Deloitte shows that arrangements have only been finalised by 12% of companies whose high earning executives will be adversely affected by the new pensions tax regime, which starts on 6 April 2006 - 'A' Day. "Organisations are waiting to learn what their competitors are doing in respect of pension provision before they make a final decision about what changes to offer their own executives," said Bill Cohen, partner at Deloitte. "However, time is running out and companies need to urgently agree their post A-Day policies with executives."
Deloitte website
ICAEW launches Financial Strategy diploma
The ICAEW has launched a new diploma in Financial Strategy in conjunction with Oxford University and commercial partner CCH. The diploma also provides a gateway into the Oxford MBA, with credits from the diploma transferable into the Executive MBA programme offered by the Oxford Sa¯d Business School. The modular course begins in January 2006 and ends in September 2006. The four-day modules cover finance, strategy, and management systems. Candidates are expected to have a 2:1 or above undergraduate degree, and at least five years' work experience.
Knock knock visits by HMRC
HM Revenue & Customs and the Department of Work and Pensions are out calling on businesses in Essex to check that they're registered and complying with their legal requirements. Visits in Southend recently identified six traders who had not registered for income tax or VAT and one person who was working and claiming benefit. "The Southend visits were part of a two-day joint operation and part of a continuing national countrywide initiative," says HMRC.
Cautious thumbs up for tax system
Over two thirds (69%) of respondents from large private companies think that the UK tax regime is "fairly good" for enterprise, says a new survey. The finding came in response to a question posed by PricewaterhouseCoopers (PwC) in the Lighthouse Global Tax Tracker 2005 study.
New guide to tax treatment of childcare perks
HM Revenue & Customs have published a new guide for SMEs, giving an overview of the tax and National Insurance treatment of the different types of childcare support they can give their employees.
IASB considers role in improving management commentary
The International Accounting Standards Board (IASB) has published a Discussion Paper assessing the role it could play in improving the quality of the management commentary that's published with companies' accounts.
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