Description and short articles of the Dossier section of INTHEBLACK, which this month covers offshore outsourcing in Asia, anti-money laundering legislation and standardisation - know what's coming.
Don't banish the reporting entity
CPA Australia is opposed to the Australian Accounting Standards Board's (AASB) proposed removal of the reporting entity concept.
The AASB's proposals are designed to achieve consistency with the International Accounting Standards Board (IASB). CPA Australia notes, however, that subsequent IASB decisions have superseded the thrust of the AASB's proposals. The AASB's proposals would mean that the application of accounting standards would no longer depend on whether entities are reporting entities.
CPA Australia's CEO Geoff Rankin says the reporting entity concept plays an important role in Australia.
'The IASB has rightly decided not to extend the definition of general purpose financial statements to include financial statements lodged with ASIC. By going ahead with its proposals, the AASB will in fact be inconsistent with the IASB's position. Throwing out the reporting entity concept would impose additional costs on entities, without corresponding benefits,' says Rankin.
CPA Australia has suggested that the AASB consider improvements to the reporting entity concept such as: a statement by the directors specifying their reasons for classifying the entity as a non-reporting entity; and/or requiring a 'non-reporting entity' statement by shareholders.
SEC cracks down on unregistered firms
The US Securities and Exchange Commission (SEC) has once again shown it means business and is willing to enforce the Sarbanes-Oxley Act (SOX) to the letter.
The investor protector has charged 69 auditors for issuing audit reports on public companies while they were not registered with the Public Company Accounting Oversight Board (PCAOB).
Firms that prepare and issue audit reports on the financial statements of public companies must be registered with the PCAOB - this is one of the fundamental requirements of SOX. The 69 firms and partners named were collectively responsible for issuing 60 audit reports for 53 companies between 2003 and 2005.
The SEC says when these auditors failed to register with the PCAOB, they evaded its oversight authority, and the actions taken protect investors.
Duplicate rules waived in Australia
Duplicate reporting obligations for New Zealand companies operating in Australia have been removed, ASIC has announced.
Australian and New Zealand incorporated companies registered to operate in both countries were previously required to lodge information with both ASIC and the New Zealand Companies Office (NZCO).
Since the Australian Parliament passed the Corporations Amendment (NZ Closer Economic Relations) and Other Legislation Act in June 2007, however, this requirement no longer exists.
The New Zealand Parliament has also introduced similar provisions for Australian incorporated companies operating in New Zealand.
Super market expected to grow 10 per cent annually
The superannuation market will grow at 10 per cent per year over the next 15 years from just over $1 trillion (December 2006) to more than $4 trillion by 2021, Deloitte's actuar-ial arm Trowbridge Deloitte predicts.
This includes pre-retirement and post-retirement income, and lump sum assets.
Industry funds are predicted to be the fastest growing pre-retirement sector, reaching $789bn by 2021.
The next fastest growth area is expected to be in employer sponsored super funds, which Deloitte says will almost double from $87bn in 2006 to $174bn by 2012.
Taxman turns spotlight on profitable Chinese companies
Companies in China earning fat profits and those that declare less tax than their counterparts should expect to be placed under increased scrutiny, the State Administration of Taxation says.
In future, all firms whose employees' annual tax exceeds a combined total of more than 300,000 yuan must declare this by the end of 2008, while firms whose employees' total tax liabilities are less must make declarations by 2009. At the beginning of 2007 the tax authority required all those earning more than 120,000 yuan a year to declare their incomes before March 2007.
