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3rd Meeting of Indo-UK Task Force on Corporate Governance Conclude

A two-day meeting of the Indo-UK Task Force on Corporate Governance concluded here today. The Task Force was constituted in 2006 to promote bilateral collaboration between India and UK in areas of mutual interest in corporate matters, including corporate regulation and governance. UK was represented at this 3rd meeting of the Task Force by eight- member British delegation, led by Mr Geoffrey Stanley Dart, Director, Corporate Law and Governance, Department for Business, Enterprise and Regulatory Reform(BERR), Government of UK; while the Indian side was led by Shri Anurag Goel, Secretary, Ministry of Corporate Affairs, Government of India.

The discussions held by the Group covered various areas including the Limited Liability Partnership Bill, Private versus Public Enforcement of Good Governance in context of Shareholder Activism; and Practical aspects of IFRS implementation. The Task Force also discussed sharing of experience on economic crises and the role of various regulatory and professional institutions in meeting emerging challenges. Specific areas of discussions also on increasing Institution-to-Institution and business-to-business contacts between entities in UK and India. UK agreed to share its experiences on functioning of insolvency practitioners, their licensing, and forming joint intelligence committees. Insolvency Practitioners Association(IPA), UK will help the Society of Insolvency Practitioners in India by hand holding, training of trainers, joint projects and sensitization of creditors.

British Airways Club World

The Task Force also emphasized the importance of Corporate Social Responsibility , i.e. CSR, and Corporate Governance in business value creation and sustainability. It was decided to take up a joint Research Project on “CSR as a contributory factor to sound business strategy”. The research will be funded by the Indian Institute of Corporate Affairs(IICA). ICSI and CASS Business School also agreed to work together on research, training and networking on CSR and corporate governance areas. ICSI would organize an international conference in UK in April 2009. Company Secretaries from India would participate and study UK systems and capacity building particularly in context of small and medium practitioners.

In addition to ICSI, ICAI, ICWAI, it was also agreed to expand regulator-to-regulator contact in field of Competition and Insolvency. IICA & NFCG would contribute as think tanks and knowledge managers in various initiatives. In pursuance of B2B contacts between the corporate of the two sides, Networking of Indian and UK firms will be facilitated for sharing of experiences, draw out best practices, improve standards, promote member to member contact.

Source: PIB Website

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I have never seen such nastiest comments in my life about the accounting profession in India where the readers have commented on the article “IFRS: The magnificent obsession of ICAI by P S Prabhakar”

The writer has makes a valid point,

ICAI draws a lot of consolation from the fact that the Standards Advisory Council — another organ of the IASB — has a 1/38th share for India (Sailesh Haribhakti, again not nominated by ICAI) among its members (including 7 representatives from organisations such as World Bank, Basel Committee, IFAC, UNCTAD, International Association of Insurance Supervisors, etc). The EU has 12 members, Africa has 2, Latin America has 3, the United States has 3, even Singapore has 2, while countries like Australia, China, Japan, Korea, Israel & Brazil have one each, like India.

If, in spite of such scant respect shown to the Indian accounting profession and conscious ignoring of India’s premier accounting body, the ICAI, if the IASB is able to make ICAI simply dance to the tunes of IFRS (like cheerleaders), then what could be the motive?

However I believe that adopting IFRS by all the countries in the world will bring about standardisation as well as comparability of financial reporting. No local GAAP… less burden on business.

The MCA is moving in right direction where the NACAS with comprehensive mix of people will discuss on Accounting Standards and recommend as necessary. The role of Accounting bodies like ICAI and ICWAI should be primarily to train its professionals / students on accounting and auditing standards. (Judges do not prescribe laws). Globally you will notice that the standards are independent bodies FASB, IASB, IRBA, AASB.

What about other professions in India where the practising members are more than accountants ? Does the apex bodies regulate the profession in practise. Read the objective they have been set up for. Click below:

The objectives of both the apex bodies mentions more about how they regulate the education standards rather than how it regulates the profession. The apex bodies do not mention how it promote standards in practise (professionals) and how does it protect the customer (patients). If the controlling body lacks tooth, how can professions its monitors recognised internationally.

I do not feel good to read comments like

However the bottom line is ICAI (and ICWAI) has been protected statutorily for long enough. Now time to gear their professionals to develop 360 and face the reality of globalisation.

Regards,

Santosh Puthran

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As Canadians adopt international accounting standards, they should know the rules may change at the last minute.

It’s rare to think of accountants and bold change in the same sentence. However, accountants will be leading the next wave of major regulatory changes affecting the Canadian business world: the adoption of International Financial Reporting Standards (IFRSs).

Accounting transactions are governed by a set of rules known as Generally Accepted Accounting Principles (GAAP). Each country has its own GAAP; the goal behind IFRS is to create the same set of accounting standards for all nations, which should ultimately make it easier to conduct business internationally and raise funds in global capital markets.

Read the full article by Karine Benzacar, Financial Post

Regards,

Santosh Puthran

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Recent statistics — including those from an Ernst and Young Canada coproduced report on Canadian IFRS readiness — have shown that while half of all senior finance executives have started to evaluate the impact of IFRS, almost three quarters of those executives don’t have a dedicated team in place to execute the changes. And with financial departments still lagging behind the curve, it’s not surprising how far behind some IT departments are on IFRS.

“In our experience, most Canadian companies’ IT departments have low to nonexistent knowledge of IFRS standards,” said Karen Higgins, partner and national director of accounting services at Toronto-based consultancy Deloitte. “Since conversion projects of this type are generally led by the finance department, one key success factor in the planning process is to ensure IT’s involvement and input from day one.”

Read Full Article on The Standard

The Question: Does your company has a good IT system for IFRS reporting ?

Regards,

Santosh Puthran
AICWA

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1. KPMG establishes IFRS institute
2. Ersnt & Applauds IASB
3. Buy Books on IFRS
4. Buy Books on IFRS in US

NEW YORK, April 22 /PRNewswire/ — KPMG LLP, the audit, tax and advisory firm, today announced the establishment of the KPMG IFRS Institute to raise awareness and address the information needs of companies, investors, academics and others who may be affected by a transition by U.S. companies to International Financial Reporting Standards (IFRS).

“As companies expand their reach and economies globalize, the ability to compare financial statements across borders has become imperative. The question about whether the world is going to global standards is no longer ‘if,’ but ‘when,’” said Timothy P. Flynn, KPMG LLP chairman and CEO.

Click here to read more on EarthTimes

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1. Good Bye GAAP
2. Ersnt & Young Applauds the success of IASB
3. Steps to Common Global Standards

Audit firms and multinationals have been pressuring the SEC to keep the global-standards movement on the fast track ever since the end of 2007, when the agency began allowing foreign companies to submit their IFRS-prepared filings without reconciling them to GAAP. That effectively blessed IFRS as high-quality, notes Margaret Smyth, vice president and controller of United Technologies Corp., some of whose international subsidiaries use the global standards. “If it’s good enough for the SEC, I would think it’s good enough for most people,” she says.

Click here to read More on www.cfo.com

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1. Earlier Posts on IFRS

The FINANCIAL — London, The movement towards International Financial Reporting Standards (IFRS) as the leading financial reporting framework for the global capital markets has gathered pace faster than most people expected, according to Ernst & Young.

Dr. Allister Wilson of Ernst & Young says the remarkable success of the adoption of IFRS in 2005 across Europe and in other countries around the world is due to a number of factors. In particular he cites the courage, vision, and commitment shown not only by the members of the International Accounting Standards Board (IASB), but also by national governments, securities’ regulators, corporations, and the auditing profession.

Read more on FinChannel

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Regards,

Santosh Puthran

The International Financial Reporting Interpretations Committee (IFRIC) issued an Interpretation, ‘IFRIC 13 Customer Loyalty Programmes’. The IFRIC is the successor to the Standards Interpretation Committee (SIC) of the International Accounting Standards Board (IASB) and is the Interpretative arm of the IASB functioning much in the same way as our Accounting Standards Interpretation (ASI) does. IFRIC 13 was issued on June 28, 2007, and is applicable to accounting periods commencing on or after July 1, 2008.

Loyalty programmes have been developed as customer relationship management exercises and are designed to tie a customer to a particular entity. These programmes typically offer incentives in the form of ‘free’ products and services, the quantum being dependent upon the products and services a customer has bought. Every time a customer purchases a product or service, points are credited which are redeemable for either own products or services or third party products or services. The most common form of such schemes in India is operated by airlines. Retail trade which is evolving into malls and chains is beginning to offer similar schemes. The latest to get on board is a UK-based company dealing in currencies which is now offering award points.

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Regards,

Santosh Puthran
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1. Articles on IFRS

The Chartered Institute of Management Accountants (CIMA) has expressed a number of concerns over the complexity of financial statements.

Reported in Accountancy Age, Charles Tilley, chief executive of CIMA, claims that companies are not putting 80 per cent of their assets on balance sheets and that there is not enough disclosure on cash flow.

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