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th15 Board Meeting (72nd Excom), Kathmandu, May 2008 AGENDA ITEM 2

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The attached round table reports summarize noteworthy events in each CAPA

    member jurisdictions.

These summaries provide useful information and benchmarks on issues

    challenges and events in the CAPA region and how these are being dealt with by

    member bodies.

    Board action required:

Board will be given the opportunity to make further enquiries or discuss any of

    these developments during the board meeting process or privately with the

    respective member bodies concern.

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    Page 2 - 3 1. Australia CPA

    Page 3 - 4 2. China CICPA

    Page 4 - 5 3. Japan JICPA

    Page 5 - 8 4. Korea KICPA

    Page 8 - 11 5. Malaysia MIA

    Page 12 - 13 6. New Zealand NZICA

    Page 14 - 18 7. Pakistan ICAP

    Page 18 - 21 8. Sri Lanka ICASL

    Page 21 - 24 9. United Kingdom ICAEW

    Page 24 - 27 10. United States of America AICPA



Financial Reporting

The major activities of CPA Australia and The Institute of Chartered Accountants in Australia

    in the past 8 months in the financial reporting area have mainly concentrated on differential

    reporting proposals related to IFRS for SMEs. Effective from June 2007 Australian corporate

    law was amended to increase the thresholds below which it is no longer necessary to prepare

    financial statements for lodgment with the corporate regulator.

The thresholds have been increased by a factor of 250% over the previous thresholds which

    were set 10 years ago. The new thresholds require companies to prepare and lodge audited

    financial statements in accordance with Australian Accounting Standards if the company meets

    any 2 of the 3 following tests

    ? Turnover $A25m or more

    ? Gross assets$A12.5m or more

    ? 50 employees or more

As a result of these changes a significant number of companies no longer are required to

    prepare financial statements in accordance with Australian Accounting Standards. However in

    considering the application of IFRS for SMEs the Australian Accounting Standards Board has

    proposed that those companies which are still required to prepare financial statements be given

    the option whereby they are not listed entities or have a turnover less than $A500M of applying

    IFRS for SMEs.

Whilst the profession is supportive of a differential reporting framework there are mixed views

    as to whether a threshold is appropriate and the application of this concept in the public sector

    and not-for-profit sectors.

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    A common issue raised in submission letters is the application of IFRS or IFRS for SMEs to subsidiaries of parent companies who prepare consolidated IFRS financial statements. Respondents requested an option for subsidiaries to prepare the financial statements in accordance with the measurement and recognition requirements of IFRS (as their parent companies would not want their subsidiaries adopting different recognition and measurement) but with limited disclosure requirements (therefore some form of combination of IFRS and IFRS for SMEs).

    The professional bodies submission on the IFRS for SME proposals requested the IASB to give consideration to reducing disclosures as proposed in the exposure draft and to reduce the extent of fair value required for SMEs.

    In November 2007 the professional accounting bodies, lodged a field testing submission to the IASB to show the impact of the proposed IFRS for SME standard on different types of entities in Australia. Three entities were field tested with only one of these entities currently being

    fully compliant with IFRS. The submission supported the professional bodies position for reduced disclosures as well as identified some practical difficulties when applying the standard in isolation of full IFRS.

Professional Standards

The Accounting Professional and Ethical Standards Board(“APESB”) was established by

    the two professional bodies to set professional standards for the profession .Whilst the Board is funded by the profession it has an independent chairperson and includes members who are non accountants. The Board has recently released an exposure draft on Valuations and another on Compilation of Financial Information

Liability Capping

    After many years of advocating for liability capping by both professional bodies 2008 will see the commencement of Professional Capping Schemes under which members of the professional accounting bodies who obtain the prescribed level of insurance cover will receive a cap on the level of any negligence claim. The cap is based on a multiple of the fee for an engagement.


Recent Significant Developments of the Chinese Accountancy Profession

I. Convergence of Auditing Standards

    The China Auditing Standards Board and the Hong Kong Institute of Certified Public Accountants made the joint declaration on the converged China Auditing Standards(CAuSs) and Hong Kong Auditing Standards(HKAuSs) on December 6, 2007. The same Certified Public Accountant applying CAuSs or HKAuSs effective on 6 December 2007 should comply with the same requirements and the resulting conclusions should have the same effect for the same assurance or other related services engagements.

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    II. Enhancing International Co-operation

Based on the common aspirations and interests in promoting the development of accounting,

    auditing and education, CICPA and the Institute of Chartered Accountants of Scotland signed a

    Memorandum of Understanding on January 21, 2008, in order to make co-operation in the fields

    of accounting education, professional development of members, and exchange of technology,


CICPA and the Chartered Institute of Management Accountants signed a MOU on April 17,

    2008, aiming for various forms of co-operation such as education and training, information

    exchange, and examination and recognition of qualification.



     th1. 60 anniversary

    This year is the 60th anniversary of the establishment of the certified public accountancy thprofession in Japan. Our Institute will hold the 60 Anniversary Ceremony in Tokyo on July 8,

    2008. We also plan to publish a book covering our Institutes activities in the last 10 years, and

    an audit/accounting dictionary.

2. Internal control audit and quarterly report review

    Starting April 2008, Japanese regulations of the Financial Instruments and Exchange Act

    require managements' assessment of internal control over financial reporting and quarterly

    financial reporting. Japanese audit firms are required to perform audits of managements'

    assessment of internal control over financial reporting, and reviews of quarterly financial

    statements. Our Institute developed and disseminated practical guidance based on the additional


     (1) Internal control audit

    On October 24, 2007, our Institute issued Auditing and Assurance Practice Committee

    Statement No.82 "Practical Treatment for Audits concerning Internal Control over

    Financial Reporting." Subsequent to the issuance of the Exposure Draft on July 18, 2007,

    our Institute received over five hundred comments from thirty respondents such as industry

    associations, companies and individuals. The statement was issued after considerable

    deliberation of all of the comments received by us.

(2) Quarterly report review

    On October 30, 2007, our Institute issued Auditing and Assurance Practice Committee

    Statement No. 83 "Practical Guidelines for a Review of Quarterly Financial Statements."

    This statement provides practical guidance for statutory quarterly financial statements,

    required pursuant to the provisions of the Financial Instruments and Exchange Act. This

    statement was completed in accordance with the pronouncement entitled "Council Opinion

    on the development of Quarterly Review Standards" released by the Business Accounting

    Council (BAC) and by incorporating the International Standard on Review Engagements

    (ISRE) 2410.

3.Introduction of limited liability corporation (LLC) form

    Until the amendment of the Certified Public Accountants (CPA) Law in June 2007, audit firms

    in Japan, known as audit corporations, were only allowed to be formed as general partnership.

    Under the new CPA Law audit firms are now permitted to be formed as LLC if certain

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    conditions, such as minimum capitalization and mandatory deposit requirements, are satisfied. As for larger audit firms, there is a requirement for their financial statements to be audited. When an audit firm is formed as LLC, if one of its partners is found to be involved in issuing false audit opinion, such partner remains exposed to unlimited liabilities.

4.Public sector accounting

    In August 2006, the Ministry of Internal Affairs and Communications (the Ministry) instructed local governments to prepare in near future balance sheets, administrative costs statements, cash flow statements, and statements of changes in net assets. The Ministry published a research paper on public sector accounting for local governments in May 2007, and a new Law relating to the Financial Soundness of Local Governments was enacted in June 2007. Our Institute, in cooperation with the Ministry, has been preparing to support local governments in meeting the revised disclosure requirements.


    Recent Developments in Korea

    I. Top 10 Projects

    II. IFRS Adoption

    III. IFRS Manual and IFRS Accreditation Program

    IV. XBRL Korea

    V. Amended Rule for Burden of proof from auditors to plaintiffs

    VI. International Activities

    VII. New ISA Adoption

I. Top 10 Projects

    ? The Accounting Credibility Enhancement Committee of KICPA invited Mr. Russell Guthrie, Technical Manager of IFAC, to a seminar to discuss the extent of the KICPAs compliance to

    the IFACs SMOs. The seminar was held on January 28, 2008 in Seoul, Korea.

    ? Recently the KICPA has created a task force (TF) to update Globalization Whitepaper. The TF is made up of senior practitioners from big 4 accounting firms in Korea and led by Mr. In-ki Joo who is Deputy President of CAPA. The Globalization Whitepaper addresses the comparison between Korean accounting systems and practices and those adopted by five countries including Australia, Canada, Japan, U.K., and U.S.A.

II. IFRS Adoption

    ? On December 21, 2007, the Korea Accounting Standards Board (KASB/KAI), empowered by the Financial Supervisory Service (FSS) to develop Korean accounting standards,

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    released the Korean International Financial Reporting Standards as issued by the IASB

    (K-IFRS). This new set of standards is part of its continuing efforts to enhance the comparability, reliability and transparency of Korean corporate financial reporting.

     As proposed in the Roadmap, the KASB completed the translation of IFRS word-for-word

    into Korean as adopted by the International Accounting Standards Board (IASB) and achieved the transition to IFRS in Korea as endorsed by the Financial Supervisory Service (FSS). K-IFRS represents the adoption of IFRS into Korea's national GAAP for application to listed companies through the respective legislation procedure as prescribed in the Act on External Audit of Corporation. The translation was made in due process as prescribed in the copyright agreement with the IASCF (International Accounting Standards Committee Foundation).

    Adopting IFRS is the global trend intended to enhance the comparability of accounting standards as well as the transparency and public trust of financial reporting. In line with this global trend, Korea announced its Roadmap for a full adoption of IFRS on March 15, 2007. This has marked Koreas formal commitment to the full-scale adoption of IFRS as its

    national GAAP in 2011 (2009 for early-adopters).

    The KASB has made available K-IFRS training programs for CPAs and corporate personnel since December 2007 and has been vigorously committed to help users better understand these new standards. The KASB is also working on the translation of the implementation guidance of IFRS which is not mandatory but supplementary part of the standards. It is expected the guidance would be issued in the second half of 2008.

III. IFRS Manual and IFRS Accreditation Program

    ? In June 2007, the KICPA formed a TF to undertake a project to issue the IFRS manual. The purpose of this user guide is to provide listed companies and KICPA members with detailed guidance for the preparation and reviewing of financial statements in compliance with IFRS. As a result of this effort, the IFRS Manual was published on January 29, 2008.

    ? KICPA has put in place the IFRS Accreditation Program in April 2008. The certification

    scheme, IFRS Accreditation is a voluntary program which may be obtained by KICPA

    members wishing to demonstrate their competence in IFRS.

    In March 2007, Korea announced its plan to fully adopt IFRS for all listed companies beginning in 2011. To ensure the consistent interpretation and application of these new standards, all market participants including members of KICPA are required to be

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    knowledgeable about and familiar with IFRS. As the leader of accounting professional groups, KICPA has urged its members to obtain adequate knowledge and technical skill required to apply IFRS in their practice. Individuals who have completed courses required to obtain the required level of knowledge of IFRS are provided with IFRS accreditations by the KICPA.

    While the IFRS accreditation is not a mandatory program, it demonstrates the competency and qualification in IFRS-related professional services. As the accreditation requires certain technical training requirements and higher quality management, those who have been

    accredited should enjoy the recognition of their competence and service quality in the market.

IV. XBRL Korea

    ? On July 13, 2007, the XBRL Korea was officially registered as a not-for-profit corporation with the Ministry of Knowledge and Economy. The XBRL Korea has become the sole authoritative body to administer and promote XBRL-related activities in Korea.

    ? On October 1, 2007, the Financial Supervisory Service (FSS) of Korea implemented the disclosure system that required all listed companies in Korea to disclose their financial statements in the XBRL format.

? On December 26, 2007, the FSS was registered as a member of XBRL Korea.

? On January 17, 2008, XBRL Korea and the KICPA jointly hold the 2008 XBRL

    Conference in Korea. Many participants from government bodies, public companies,

    financial institutions, academics, accounting firms, and private companies attended this conference.

V. Amended Rule for Burden of Proof from Auditors to Plaintiffs

? The KICPA established the Auditor Liability TF and has made strenuous efforts for the

    amendment of auditor liability laws. The KICPA proposed the amendment of the auditor liability laws to rectify the burden of proof from auditors to plaintiffs in the case where plaintiffs are certain financial institutions or representatives of securities class actions. As

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    the KICPA proposal was approved by the National Assembly on February 26, the amended

    auditor liability laws became effective on March 21, 2008.

    VI. International Activities

? On October 9, 2007, the KICPA had a meeting with representatives of the Institute of

    Professional Accountants of Samara Region in Korea.

? On October 30, 2007, the KICPA had a meeting with Mr. Tadashi Sekikawa, a member of

    IFAC IPSASB in Korea and discussed the following issues;

? Ongoing activities and future projects of IFAC IPSASB

    ? IFRS adoption

    ? The comparison of government accounting system between Korea and Japan

? On November 19, 2007, and March 3, 2008, the KICPA invited members of the Mongolian

    Institute of Certified Public Accountants to training programs which covered the following


? The accountability of enterprises and the mission of CPAs

    ? Taxation in Korea

    ? Accounting system & IFRS adoption in Korea

    ? Public sector accounting system & XBRL adoption in Korea

    ? Auditing system & ISA adoption in Korea

    ? Audit review system in Korea

    VII. New ISA Adoption

? The Auditing Standards Board of KICPA plans to adopt the New International Standards on

    Auditing in pursuance to the Clarity Project of IFAC. The Board also plans to announce

    the Roadmap for the adoption of New ISAs from 2010 at the earliest possible. The Board

    has created the Translation Sub-committee to work on the translation of all the New ISAs.


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    1. Development in the Country Impacting the Accountancy Profession

    (November 2007 April 2008)

     th1.1 40 Anniversary Royal Gala Dinner

The Malaysian Institute of Accountants (MIA) hosted its 40th Anniversary Royal Gala

    Dinner on Wednesday, 7 November 2007 at the Shangri-La Hotel, Kuala Lumpur.

His Majesty Seri Paduka Baginda Yang di-Pertuan Agong XIII Al-Wathiqu Billah Tuanku

    Mizan Zainal Abidin Ibni Al-Marhum Sultan Mahmud Al-Muktafi Billah Shah graced the

    event with his presence, lending it more meaning and significance.

In a message to MIA, His Majesty commended MIA on continuing to be the focal point of

    the accountancy profession, which plays an integral role in the economic growth and

    national development of Malaysia. His Majesty also congratulated the organisation for

    having achieved such a milestone.

Themed ''MIA : 40 Years of Walking the Values'' the dinner celebrated MIA's journey

    since the Accountants Act was enacted in 1967, as it has grown from strength to

    strength in many ways and its presence is being increasingly felt in the Malaysian

    business scene, MIA's president Nik Mohd Hasyudeen Yusoff said.

Apart from that, MIA has been committed in contributing towards the nation-building

    agenda and actively serving as the voice of Malaysian accountants in regional and

    international accounting bodies.

The event was attended by some 400 individuals including top Government officials,

    foreign dignitaries, corporate captains and prominent leaders of corporate Malaysia and

    key people from the accountancy fraternity of Malaysia.

The MIA's 40th Anniversary Commemorative Book, which chronicles the organisation's

    40 year journey, was also launched during the dinner. The book which tells the tale of

    MIA, captures some of the challenges and significant moments of the accountancy

    profession in Malaysia apart from highlighting some of the key men and women who

    have steered MIA as well as the members of the profession to the

    current point.

    1.2 National Accountants Conference

National Accountants Conference (NAC) is a flagship event in Malaysian Institute of

    Accountants (MIA) continuing professional education programme. This year marks the rdNational Accountants Conferences’ (NAC) 23 successive year. Themed Towards

    Excellence, Achieving World Class, it was held at the Kuala Lumpur Convention Centre from 12-13 November 2007.

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    This year’s conference was well attended by 2,000 professionals from around the country, who benefited from 19 valuable sessions. The NAC has always been viewed as a platform for learning and developing stronger business networking opportunities. It also provided participants with the opportunity of earning up to 16 MIA CPE credit hours while listening to dynamic and professional speakers delivering pertinent information on current business issues, financial management practices and standards, personal development and much more.

    NAC 2007 also offered unmatched continuing professional development and networking opportunities. It was targeted to benefit everyone, from the senior executive to the person who is just starting out.

    1.3 Malaysia Services Exhibition 2008, Sharjah UAE, 13-15 January 2008

    The Malaysian Institute of Accountants (MIA) participated in the first Malaysia Services Exhibition (MSE) which was successfully held at the Expo Centre Sharjah, United Arab Emirates from 13-15 January 2008. The exhibition was a new initiative by Malaysia External Trade Development Corporation (MATRADE) to promote the Malaysian rdservices sector, which has been identified as the third engine of growth under the 3

    Industrial Master Plan (IMP3) with a view to branding Malaysian services overseas.

    The objectives of the MSE 2008 are to promote services from Malaysia to West Asia and surrounding regions (North Africa, Indian Sub-continent and CIS countries), gain and further enhance the visibility of Malaysia services capabilities and expertise, brand Malaysia services by showcasing Malaysian companies’ achievements in the

    international arena, and provide an avenue for Malaysian services providers to network and forge strategic alliances with their potential clients or partners overseas.

    The exhibition is planned to be an annual event and will be rotated to various locations, with focus on services with greater potential in regional markets.

    The components incorporated in the MSE 2008 in Sharjah included the Services Exhibition as the main event, forums, round-table discussions, one-to-one business meetings, and incoming buying missions.

    The exhibition was officiated by the Minister of International Trade and Industry of Malaysia, YB Dato’ Seri Rafidah Aziz and was graced by The Crown Prince of Sharjah, His Highness Sheikh Sultan bin Mohamed Bin Sultan Al Qasimi.

    1.4 MIA and the Companies Commission of Malaysia Collaborate (SSM) to

     Strengthen Corporate Malaysia Through Education and Development

    The Malaysian Institute of Accountants (MIA) and the Companies Commission of Malaysia (SSM) signed a Memorandum of Understanding (MoU) on Monday, 11 February 2008 in a bid to jointly uphold public interest and foster a climate of good corporate governance. The MoU will enable accountants to attend relevant training programmes organised at SSM's training academy.

    According to MIA's president Nik Mohd Hasyudeen Yusoff, MIA views the education and development of its members as one of the key tenets in ensuring quality in the profession.

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