July

IASC Foundation invites nominations for 3 Trustee seats

13 Jul 2002

The IASC Foundation is seeking to appoint as IASCF Trustees, for three-year terms, three individuals with a background as a senior corporate executive, one each from the Asia-Pacific region, Europe, and North America.

Click for IASCF Press Release (PDF 9k).

EFRAG invites comments on its draft letter on Improvements

13 Jul 2002

The European Financial Reporting Advisory Group (EFRAG) has developed its initial views on the IASB Improvements Exposure Draft and posted them to its Website for comment (due 20 August). .

The European Financial Reporting Advisory Group (EFRAG) has developed its initial views on the IASB Improvements Exposure Draft and posted them to its Website for comment (due 20 August).

Apologies: our website host server crashed

12 Jul 2002

Fixed (we hope). We are operating on a backup system now.

The site hosting company has advised us that problems are likely to continue for a while.

New valuation standards proposed by IVSC

11 Jul 2002

The International Valuation Standards Committee has posted the following Exposure Drafts of valuation guidance on the IVSC Website: Valuation of Agricultural and Rural Properties Reviewing Valuations Personal Property Valuation of Mortgage Portfolios for Securitisation Purposes. Click for Information about IVSC. .

The International Valuation Standards Committee has posted the following Exposure Drafts of valuation guidance on the IVSC Website:

  • Valuation of Agricultural and Rural Properties
  • Reviewing Valuations
  • Personal Property
  • Valuation of Mortgage Portfolios for Securitisation Purposes.
Click for Information about IVSC.

AIMR sees urgent need to amend deferral provisions of IAS 19

10 Jul 2002

The Global Financial Reporting Advocacy Committee of the Association for Investment Management and Research (AIMR) has asked the IASB to act "with a sense or urgency" to amend IAS 19, Employee Benefits, to (1) eliminate the deferral and amortisation of past events and (2) disaggregate the activity relating to defined benefit pension plans.

Disaggregation would entail separate disclosure of categories of periodic costs (current service costs; interest cost; the expected return on assets; actuarial gains and losses) and non-periodic costs (past service costs; gains and losses on settlements and curtailments). AIMR represents 58,000 investment professionals in over 100 countries. Click for Link to AIMR Letter.

Earnings management: an international comparison

09 Jul 2002

Despite the accounting scandals that have surfaced recently in the United States, a study by three accounting academicians has found that the opportunities for accounting abuses are far greater in Continental Europe and Southeast Asia than in the U.S.

and the U.K. Using data for nearly 9,000 companies in 31 countries from 1990 to 1999, the researchers identified measures of the extent to which insiders can manage the 'accounting' component of reported earnings to smooth or mask the firm's economic performance -- for the insiders' own benefit. The study, titled "Investor Protection and Earnings Management: An International Comparison", highlights an important link between legal institutions and the quality of accounting earnings reported to market participants. To download the latest version of the paper, Click Here.

Over 90% of institutional investors want unified global standards

09 Jul 2002

A survey by McKinsey & Company of over 200 institutional investors in 31 countries found that over 90% of them want a single unified set of global accounting standards.

However they are split over which standards, with investors from Western Europe, Eastern Europe, Africa, and Asia favouring IAS and those from North America and Latin America favouring US GAAP. The study also found that 'accounting disclosure' is the single most significant factor affecting their investment decisions. Another interesting finding: investors strongly favour expensing stock options, with over 90% supporting such a change in all parts of the world except North America, where it is 67% in favour.

Role of the board of directors in Enron's collapse

08 Jul 2002

A subcommittee of the US Senate has published a report on The Role of the Board of Directors in Enron's Collapse.

Click to Download (PDF 302k). Among other conclusions: "The Enron Board of Directors knowingly allowed Enron to engage in high risk accounting practices."

Australia proposes to replace national standards with IAS

04 Jul 2002

The Australian Financial Reporting Council (FRC) has announced its support for the adoption by Australia of International Accounting Standards by 1 January 2005. The FRC is the body established under Australian law to oversee the process for setting accounting standards in Australia, including overseeing the operations of the Australian Accounting Standards Board (AASB).

The FRC proposal, which is subject to the Government's support for necessary amendments of the Corporations Act, would mean that, from 1 January 2005, the accounting standards applicable to reporting entities under the Act will be the standards issued by the International Accounting Standards Board. After that date, audit reports will refer to companies' compliance with IASB standards. Click for:

Current SEC initiatives in accounting and disclosure

03 Jul 2002

In a Speech before the Economic Club of New York, SEC Chairman Harvey L.

Pitt summarised the Commission's key initiatives in the area of accounting and disclosure as follows:
  • A proposed framework for oversight of the accounting profession
  • CEO and CFO certification of financial statements
  • Actively assisting FASB in retaining its independence and addressing key issues on a more timely basis and in a way that will better adapt to changing business environments and emphasise overall accuracy
  • Requiring companies to discuss the effects of their critical accounting policies
  • Reminders to companies to disclose off-balance sheet financing arrangements, and about the appropriate use of, and limitations on, pro forma financial information
  • Enforcement actions underscoring that technical compliance with GAAP, without more, can still produce insufficient disclosure
  • Accelerated reporting of insider transactions, including company loans
  • Tripling the number of items that companies must report currently, and to accelerate those disclosures
  • Accelerating the deadline for annual reports from 90 to 60 days, and quarterly reports from 45 to 30 days.

Correction list for hyphenation

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