A European Group of Auditors’ Oversight Bodies has been set up by the European Commission. The group will ensure effective coordination of new public oversight systems of statutory auditors and audit firms within the European Union and may also provide technical input to the preparation of the Commission implement the 8th company law directive covering audits.

A method to value share options for smaller quoted companies has been developed by pay consultants, Independent Remuneration Services, in conjunction with the Quoted Companies Alliance and City Group. QCA members are being offered free advice on how to calculate the fair value of an option. For information call Cliff Weight, director at IRS on 020 8944 2030 or email cliff@irsgroup.co.uk.

Following the decision to scrap the statutory Operating and Financial Review (OFR) the UK’s Auditing Practices Board stated it is no longer seeking comment on section B of its exposure draft on the International Standard on Auditing (UK and Ireland) 720 as it addresses the auditor’s duties in connection with the OFR which have now been repealed. However, interested parties have until 9 January to respond to section A which relate to the statutory duty in respect of director’s reports including the information in the business review.

Sir David Tweedie has been reappointed as chairman of the International Accounting Standards Board (IASB). Tommaso Pado-Schiopp, a member of the executive board of the European Central Bank from 1998 to May 2005,  has replaced Paul Volcker as the chairman of the International Accounting Standards Committee (IASC) Foundation, the body which oversees the governance of the IASB. New trustees of the IASC Foundation have also been appointed. They include the former chairman of the UK’s Financial Reporting Council, Sir Bryan Nicholson; William McDonough, former chairman of the US Public Company Accounting Oversight Board, and Liu Zhongli, president of the Chinese Institute of Certified Public Accountants.

Bill Gradison has been appointed acting chairman of the US Public Company Accounting Oversight Board (PCAOB) by the Securities and Exchange Commission. Prior to being appointed to the PCAOB, Gradison was senior public policy counsellor with law firm Patton Boggs.

Robert Overend, technical partner in Ernst & Young’s financial reporting group, has been appointed to the UK’s Accounting Standards Board (ASB). He qualified as a chartered accountant in 1985 and has been a partner at E&Y since 1995. He has also been a member of the ASB’s Urgent Issues Task Force since 2003.

The International Auditing and Assurance Standards Board (IAASB),  an independent standard-setter of the International Federation of Accountants (IFAC) which is overseen by the international Public Interest Oversight Board (PIOB) is seeking a full-time chairperson beginning January 2007. The appointment is for a three-year period and is made by the IFAC board with approval by the PIOB. Nominations for the IAASB chairperson are due by 15 February.

The Australian Prudential Regulation Authority (APRA) has amended its reporting requirements for APRA-regulated life companies (excluding friendly societies) following the adoption of International Financial Reporting standards in Australia.

The UK’s Accountancy Investigation & Discipline Board has decided to file disciplinary complaints against Ian Shelton, the former financial controller of Transbus International, one of the principal subsidiaries of Mayflower Corporation which collapsed in March 2004 after talks with banks failed. It also admitted accounting irregularities had been discovered at Transbus. The complaint against Shelton relates to irregularities in the operation of an invoice discounting facility at Transbus and will be heard by an independent disciplinary appeal.

The UK’s Accounting standards Board (ASB) is hosting a public meeting on its future role on 19 January. It has published two papers: ASB Communication Strategy and ASB Convergence Paper, which will form the basis of discussion at the meeting. Those wishing to attend the meeting should email j.guest@frc-asb.org.uk. Comments on the papers are invited by email to strategy@frc-asb.org.uk.

During 2006/07 the UK’s Financial Reporting Review Panel will continue to concentrate on reviewing accounts from the automobile, pharmaceutical, retail, transport and utility industries. The Panel said the wisdom of its concentration on these industries in 2005/06 had been confirmed by events and there was no reason for change. However, the Panel said it intended to extend its review of accounts to some companies providing services to those sectors, such as companies receiving significant revenue from retail sector advertising. Bill Knight, Panel chairman, said international financial reporting standards implementation will be a significant challenge for many companies in the upcoming year, influencing the accounts reviewed and issues covered.

Consob, the Italian regulator, has ordered accounting firm Deloitte & Touche not to have two former auditors of Parmalat carry out audits for two years. Adolfo Mamoli and Giuseppe Rovelli respectively audited the 2001 and 2002 accounts of Parmalat, the recently re-listed Italian dairy company that collapsed after an alleged massive fraud.


January 2006

Last Updated: 30 January 2006
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