Mafia Buzz Issue 3
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- Bu səhifədəki naviqasiya:
- Accountancy
| Mafia Buzz 2003 January 2003 (20 Minutes)Abbreviations Used Mafia Buzz 2003(Question: Why is the word “abbreviation” so long?) AIMR = Association for Investment Management and Research APB = Accounting practices board ASB = Accounting Standards Board of the UK APB = Accounting Practices Board ASB = Accounting Standards Board of the UK BEE = Black economic empowerment DC = Defined contribution DIY = Do it yourself EBITDA = Earnings before interest, tax, depreciation and amort. EC = European Commission ED = Exposure draft EU = European Union FRC = Financial Reporting Council FSB = Financial Services Board in RSA GAAP = Generally accepted accounting practice IASB = International Accounting Standards Board IAASB = International Auditing and Assurance Standards Board IAPS = International auditing practice statement ICAEW = Institute of CAs of England and Wales IFRS = International financial reporting standards JSE = Johannesburg Stock Exchange of S.A. PCAOB = Public Company Accounting Oversight Board in US SAICA = South African Institute of Chartered Accountants SARS = South African Revenue Services SEC = Securities Exchange Commission of the US SERP = Supplemental executive-retirement plan SHAC = Stop Huntingdon Animal Cruelty SME = Small and medium enterprise SOX = Sarbanes-Oxley SMP = Small and medium accounting practice SOX = Sarbanes-Oxley SEC = Securities Exchange Commission of the US
PwC caught the profession by surprise when they changed the wording of their audit opinion as a result of the judge’s comments in the Bannerman case in Glasgow. A bank relied on the audit opinion given by the auditors of Bannerman in making a loan. (See later for action taken by the UK in this regard.) (Page 9) MyTravel has caused the UK profession an embarrassment – they were smugly saying “It can’t happen here in the UK”. Accounting irregularities ranging from aggressive revenue recognition to misallocation of costs took place. (Why couldn’t they take the knock and blame 9/11? Why do they have to try to deceive their shareholders and loan holders?) (Page 9) John Shuttleworth lists the following lessons to be learnt from 2002:
Are your really prepared for a catastrophe? Have you got sound business continuity management plans in place? You can’t wait for it to happen. You have to prepare for the worst. The IT function is obviously important but one must have a holistic approach to the problem. One should look at the four P’s: people, processes, premises and providers. Not only should the plan be in place; it should be tested. Small businesses need to ask a series of “what if” questions. Examples are: “What if there is a break-in?” “What if my hard drive blows?” “What if there is a lightening strike?” “What if my car gets stolen with my client’s files in the boot?” “What if I get seriously ill?” If you haven’t done it yet, it is time to plan. (If you plan, it tends not to happen!) (Page 49) The Enron affair has made auditors look not so much at what has happened in the past but as to what can trip you up in the future. (Page 52) Business travellers need to take precautions to reduce their vulnerability to danger. Some ideas are:
PwC audit chief Glyn Barker says that Enron has made all the players realise what they should have known all along and that is a good audit is not an imposition to be tolerated but an asset worth paying for. (Page 78) Sir David Tweedie says that the IASB favours an approach that requires the company and its auditor to take a step back and consider whether the accounting suggested is consistent with the underlying principle. This approach requires that companies and their auditors exercise professional judgement in the public interest (this is where the whole system will fail David – can you rely on the integrity of all concerned?) The intention is to reduce the amount of guidance given and to leave more up to the judgement of the preparers and their auditors. (I wonder if the IASB has done a survey among users to get their feelings on this approach? Based on my limited survey, users want certainty and comparability.) (Page 89) Andrew Lennard argues that entry values are a sound basis for assets and for liabilities. If an asset is bought for 100, it should be measured at 100. Profit should not be taken before the asset is sold. Only then should profit be recognised. (Logical!) On the other side, if a bank receives a deposit payable on demand from a customer of 100 it should be recorded at 100. If the deposit is available to the bank for a period of time and the bank can make a return from the use of that deposit it does not mean that the bank can reduce the liability to its present value and take the profit before it has been earned. (I like this argument. It all comes down to: “When is value created?”) (Page 90) Ron Paterson suggests that we should support the move to expense employee share options. (I also think it is the right thing to do but what worries me is that if Ron agrees with David, then something must be wrong!) (Page 92) The proposals on business combinations are:
Consequential amendments will be made to the statements on intangible assets and impairment:
(Page 94) Phase 2 of business combinations contains the following proposals:
(Page 100) The IASB considered whether or not defined benefit plans should be consolidated but concluded that this topic was too hot to handle at present! (Page 100) Yüklə 371,83 Kb. Dostları ilə paylaş:
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