CIMA gains recognition in Australia and New Zealand

How is the job market for chartered management accountants developing in Australia and New Zealand? How are financial professionals there affected by global issues? We asked CIMA’s national manager, Paul Turner.

How is CIMA's presence developing in Australia and New Zealand?

The CIMA brand has grown in recognition and acceptance in recent years. New initiatives such as the CPA MRA, student recruitment and growth will help improve our brand recognition.

CIMA has been active in Australia since the early 1980s. Our branches exist in Sydney (NSW), Melbourne (Victoria), Brisbane (Queensland), Perth (WA), Adelaide (SA) and Canberra (ACT). There are over 3,800 members and students in Australia and New Zealand supported by two staff in the Sydney office.

Most members and students have come to Australia from other CIMA destinations (UK, Ireland, Sri Lanka, South Africa, Malaysia etc). However, increasingly, we are recruiting and growing students from the local population. CIMA Australia is governed by a National Executive Committee (NEC) which sets strategy and policy for Australia. Branches hold regular member and student events which are well attended.

What are the key initiatives for CIMA in the two countries?

A key focus is our student recruitment and growth strategy, with an initial focus on overseas students studying in Australian universities. Building brand recognition is another key goal. The Mutual Recognition Agreement (MRA) with CPA Australia will help us to build brand recognition.

What are some of the challenges for CIMA in Australia and New Zealand?

We face some significant challenges. The presence of two large competitors, despite our new alliances, makes it difficult for CIMA to be accepted. Employers and recruiters are coming to recognise our brand and members as professional accountants. Recently CIMA has started developing a student market in Australia as the potential to recruit overseas students in Australian universities has come to be recognised. The resourcing and funding of student recruitment initiatives is starting to grow and gain momentum.

How was the recent visit by CIMA's president?

Glynn Lowth and his wife Moya spent a week in Sydney, Canberra, Brisbane and Melbourne attending branch events and dinners. They also attended a CPA dinner to launch the MRA. Many of our members had the opportunity to meet with Glynn and Moya and to hear first hand about CIMA’s global strategy and aims. Glynn also met with the NEC and had the opportunity to learn about our local strategy and aims.

How has the financial crisis impacted CIMA members in Australia and New Zealand?

Australia generally lags around six months behind the US and Europe on economic impacts and is only now beginning to feel the effect of the financial crisis. Australia’s economy has been strong and is expected to weather the financial storm better than most OECD economies.

Our four national banks are among the top 20 global banks and are still performing strongly and remain largely unaffected by the ‘toxic assets’ issue. However, the economy has begun to slow and unemployment is on the rise. Employment opportunities are hard to come by but CIMA members are generally seen as highly skilled and valued by employers.

Links
CIMA MYJOBS lists jobs available in Australia and includes information on emigrating to Australia and New Zealand.

Diploma in IFRS Results

The results from the February 2008 sitting of the ICAI Diploma in International Financial Reporting Standards (IFRS) exam have just been published. In total 42 participants sat and were successful in the February exam, with over 60% receiving Distinctions.

The ICAI congratulates the following people:

• Martin Barry
• Clare Bourke
• Michelle Carroll
• JJ Comerford
• Margaret Deehan
• Niamh Fee
• Elizabeth Gildea
• Aidan Gorman
• Anna Kurchenko
• Colm Malone
• Garrett McCarthy
• Una McGuinness
• Brendan Molloy
• Thomas Murphy
• Margaret O'Neill
• Hugh O'Neill
• Bronagh Quigley
• Aisling Reenan
• Theresa Ryan
• Nicola Walsh
• Brian Gallagher
• Damian Gleeson
• Noel Gleeson
• Shane McKenna
• Denise O'Connell
• Lucy O'Connell
• Lisa Ryan
• Michelle Walshe
• Lauren Allman
• Andrea Flanagan
• Darren Harty
• Noel McLaughlin
• Erling Mitton
• Derval Molloy
• Liz Murphy
• Gerard John O'Gorman
• Adeline Smyth
• Paul Summers
• Niall Sweeney
• Michael Harty
• Sarah Williams
• Lynne Martin

To receive more information about the next session of the IFRS Diploma email ifrs@icai.ie

Off-balance sheet standards to be harmonised...

International accounting standards which deal with off-balance sheet activity are to be harmonised in response to the financial crisis, it has been revealed. Read original article.

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) announced the move following their latest meeting into the impact of the global recession.

Furthermore, the two boards are also set to work on analysing loan loss accounting within the financial instruments project.

Sir David Tweedie, chairman of the ISAB, explained that the fact that harmonising international accounting standards is such a complicated business is also what makes it necessary.

He said: "That is why in important areas such as financial instruments a common standard that significantly improves financial reporting and leads to a less complex approach is required. The path to achieving convergence will undoubtedly be challenging but the remit we have from policymakers is clear."

Earlier this month, the FASB issued two new proposals to improve guidance on fair value measurements and impairments.

The IASB has since asked for views on these submissions to see if it should adopt them as well.

Cost savings on IFRS conversion?

From Accounting Principles

In response to the economic crisis and continued regulatory uncertainty surrounding IFRS, 71% of companies are slowing their implementation efforts, specifically holding off allocating staff to the project, or postponing their accounting differences diagnostics. However, companies need to ensure that these cuts do not compromise their long-term plans, and must use 2009 for low-cost, targeted assessment and preparation activities.

Waiting Game:
In the last few months, companies have been slowing-but not suspending-their IFRS implementation efforts. This is manifested in two key areas – companies have avoided ramping up their overall project teams, either by cutting back on their budgets, or by holding off allocating staff. At the same time firms are postponing accounting and IT diagnostics, or conducting them internally instead of using more costly consultants as initially planned.

Other Things on the Plate:

There are two main reasons for this slowdown:
Regulatory Uncertainty: Companies are holding back because of the uncertainty surrounding the IFRS Roadmap; including conflicting comments by senior policymakers about whether the SEC will continue ‘full speed ahead’ towards adoption, and strong dissatisfaction with having to wait until 2011 for the ‘go/no-go’ decision. This should be temporary, and will probably go away when the administration’s intentions become clearer, but as of now, companies are scared of committing to an expensive, company-wide set of changes, only to revert back because of policy shifts.

The Economic Crisis:

Companies have much more immediate spending needs than IFRS – currency exchange issues, higher pension costs, and other ‘distractions’ all crowd out increasingly scarce dollars, and are making it difficult for companies to justify spending for an IFRS transition that may not happen until 2014.

Don’t Cut Back Too Far:
While cutting back on IFRS may be an attractive option, companies need to be wary of stopping their IFRS efforts altogether. IFRS is a long term process, and even with the current uncertainty, companies must lay the groundwork in 2009 for the ongoing project in targeted, low-cost ways, including:

Conducting preliminary IFRS accounting research:

As IFRS standards are still being written, conducting highly detailed accounting diagnostics may be counterproductive at this stage. However, companies should dedicate an individual to track and evaluate IASB standards as part of their job, determine which ones are in flux, and which are stable, and use publicly-available and Roundtable resources to understand the key differences. This allows you to prioritize your future workplans.

Evaluate your organization for IFRS competency: Even if you don’t plan to form your project team yet, use 2009 to evaluate your company for people with good project management skills (including ‘big project’ experience in SOX or an ERP implementation), as well as those who have practical IFRS experience, perhaps through a foreign subsidiary. Determine whether you will be able to move these people onto your team, and determine any competency gaps that might need to be filled by outside consultants.

Start reaching out to key stakeholders:

IFRS will have a broad impact on corporate functions, and you need to start making stakeholders aware of IFRS. Start letting IT know you may need to change your General Ledger and other systems (and make sure you are in their long-term work plans), and inform legal and treasury about any debt covenants and contracts that mention US GAAP terms, and may need to be changed.

The key is not to commit to expensive changes – the external environment may not give you that flexibility, and many of the detailed changes are unknowable at this point anyway-but to get an understanding of the specific challenges you face, so that you will be in a good position to start detailed planning when its appropriate.

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G20 must promote IFRS

Convergence to IFRS is essential if the global economy is to receover, according to reports released by the ACCA and the ICAEW. Read original article.

Two of the UK's leading accounting bodies, the ACCA and the ICAEW, are calling for leaders to champion the global adoption of IFRS at this April's G20 summit.

The ACCA has released a discussion paper arguing that G20 leaders should endorse the benefits of IFRS because they will bring ‘transparency, comparability and clarity to reporting in the interests of shareholders, business and the wider public’.

ICAEW chief Michael Izza also spoke out, suggesting that convergence towards IFRS is losing momentum and that the new US administration should make a concerted effort to get onto the IFRS roadmap.

"We live in a world where global issues require global solutions", said Izza. "A fragmented financial reporting system will continue to hamper comparability and transparency across borders".

ACCA president Richard Aitken Davis called it a 'major failing' that IFRS is not already the global accounting language for all finance professionals, and argued: "Priority must be placed on ensuring that existing legislative and regulatory measures are implemented and enforced effectively. Rushing through large swathes of new legislation is not the answer"

The G20 leaders’ summit is due to take place in London on 2 April.

Financial Executives International

Financial Executives International is the preeminent association for CFOs and other senior finance executives. FEI provides networking, advocacy and timely updates and CPE on financial management and reporting; Sarbanes-Oxley Act compliance; regulatory updatesfrom the SEC, FASB, PCAOB and IASB; as well as career management and executive-level and other finance & accounting jobs.

Visit the FEI website »

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ASBJ 'to adopt IFRS by 2011'...

The International Accounting Standards Board (IASB) has met with its Japanese counterpart in the hope of achieving convergence between their rules by 2011. Read original article.

It is the ninth such meeting between the IASB and the Accounting Standards Board of Japan (ASBJ).

Led by Sir David Tweedie, chairman of the IASB and Ikuo Nishikawa chairman of the ASBJ, the event focused on the convergence of Japanese Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

Mr Nishikawa said: "In Japan, the potential use of IFRS by Japanese companies has been discussed since last year. From those discussions, it is clear that constituents wish us to accelerate our convergence project so as to complete it by the end of June 2011."

For this reason, the ASBJ and the IASB will continue to work closely together in order to meet this goal, he added.

Recently, the IASB made changes to IFRS 7, which relates to fair value measurements, in order to bring the standard into line with its US equivalent.

NYSE chief looks to reinstate a version of the uptick rule

By Anuj Gangahar in New York

Mounting political pressure will result in an incarnation of the so-called uptick rule, abolished amid a chorus of criticism before the worst of the financial crisis, but the exact form of these curbs remains in question, according to Duncan Niederauer, chief executive of NYSE Euronext.

Mr Niederauer on Wednesday met top officials at the Securities and Exchange Commission and discussed, among other matters, the possible reinstatement of the rule or similar measures.

He said the next step was likely to involve equity market centres, working in concert with regulators, coming up with two or three ideas for the best way in which some form of the uptick rule could be reintroduced. This could involve a price test that takes the greater speed of today’s markets into account or stock-specific rules that would be triggered by a certain degree of short interest in particular stocks among other possibilities.

The so-called uptick rule was scrapped by the SEC in July 2007 just as the credit crisis was beginning to take hold and before the worst equity market volatility of the recession of the past 18 months. It allowed short selling only when the last tick in a stock’s price was positive. This rule was implemented after the 1929 market crash to prevent short sellers from driving the price of a stock down in a bear run.

Several critics have blasted the SEC for its 2007 decision and the news that it is considering reinstating the rule now has been met with incredulity in many quarters.

Robert Ellis, senior vice president of the wealth management group at Celent, a Boston-based consulting firm, said: “I don’t know whether to laugh or cry. The 2007 decision by the SEC was one of the worst and most irresponsible in terms of leading to the overall decline that has wiped out trillions of dollars in wealth from Americans’ investment portfolios.”

“Making this change now is a lot like bolting the barn door after the horse has left the barn, the county and possibly the state,” he said, adding that many average investors had lost so much faith in the equity markets that it would be years, if not generations, before they return.

US Congress to discuss fair value rules...

Possible changes to fair value accountancy rules are set to be debated by the US House of Representatives. Read original article.

The rules, which are also known as mark-to-market regulations, have proved controversial in the wake of the economic downturn, with some claiming they are partly to blame for the liquidity problems facing banks.

Congressman Paul Kanjorski, who is to convene a meeting by the House Financial Services Subcommittee on the matter, explained that although there are currently problems with valuing sizable assets, this does not necessarily mean the rules should be scrapped.

He said: "While companies need stability, investors still need accurate information. We therefore cannot allow for fantasy accounting that wishes away bad assets by merely concealing them."

The subcommittee meeting will take place on Thursday March 12th.

Last week, the International Accounting Standards Board made changes to International Financial Reporting Standard 7 which relates to fair value practices, to bring it into line with the equivalent US rule.

New York CPA's present their arguments for IFRS resistance

by David McCann

The New York State Society of Certified Public Accountants (NYSSCPA) registered a broad range of concerns, addressing

• the quality of the international standards
• conversion costs
• an alleged contradiction the benefits of adopting IFRS put forth by the SEC
  
• eligibility criteria for early adopters
• and a forthcoming version of the standards for use by private companies.

Click here to read original article

The roadmap calls for the SEC to vote in 2011 whether to move forward with mandatory adoption, which under the existing plan would be phased in from 2012 to 2014. It also allows a limited number of large U.S. companies to adopt the international standards as early as this year.

The quality issue is foremost to the New York accountants. "The SEC Roadmap does not present, in sufficient detail, the methodology and criteria expected to be applied...in assessing the adequacy of IFRS," they wrote in their comment letter.

Apples and Oranges?
In their letter, the accountants seemed to question whether the SEC is doing enough to make sure financial reports that use IFRS will be comparable with one another.

Any assessment of the international standards, the NYSSCPA wrote, should consider whether they are consistent with the Financial Accounting Standards Board's Concepts Statements. They singled out Statement No. 1, which says that financial reports should provide information investors and creditors can use to make informed decisions, and Statement No. 2, which says comparability and consistency are important characteristics of financial statements.

The accountants also questioned whether the decision-making process of the International Accounting Standards Board, which promulgates IFRS, "is conducive to setting future high-quality standards." They criticized the IASB for its move last fall to let companies retroactively reclassify assets so they could "cherry pick" ones with significant losses and remove them from net-income calculations. In doing so, the international board gave in to pressure from the European Commission, the accountants suggested, saying they are concerned about "the influence of various national regulators, users, and others who promote the interests of their specific constituencies, as opposed to the needs of the worldwide community."

Further, the NYSSCPA said the supposed main benefits of adopting IFRS — comparability with non-U.S. reporting entities and allowing management greater judgment in preparing financial information — may both be desirable but appear inherently contradictory.

"The comparability of financial statements prepared in conformity with IFRS may be overstated," the comment letter said. "IFRS does not seem to be consistently applied from country to country, as the number of allowable options is conducive for the regulatory agencies in each country to interpret IFRS pursuant to their respective needs and business environments."

Comparability is further reduced, the letter added, by the tendency of preparers and auditors, "because of their habits of mind," to apply IFRS in a manner that is as similar to their current or former national accounting standards as possible. "When using principles-based standards, reasonable people arrive at materially different results after applying their judgments to a given set of facts and circumstances," the accountants wrote.

When and Who?
The letter also questioned the prudence of the conversion to IFRS when the depth and duration of the financial crisis are hard to predict. "It would be reasonable to conclude that the monetary and human capital costs of the transition could be burdensome to entities with limited resources and prohibitive for some smaller entities, even over a period of many years," it said.

An alternative, the NYSSCPA suggested, would be for FASB and IASB to vigorously pursue efforts to converge the American and international standards, which it said would produce the best-quality global standards and help minimize conversion costs for U.S. companies when IFRS adoption does finally become mandatory.

At the same time, though, the society said it fully supports allowing early adoption of IFRS, and in fact the eligibility criteria should be expanded. The roadmap suggests that the proposal to limit early use of IFRS to the 20 largest companies in so-called IFRS industries is grounded in an assumption that larger companies will be more likely to have sufficient expertise and resources to carry out the adoption.

"We disagree," the accounting society members wrote. "In fact, IFRS adoption experience in Europe has shown that smaller entities may need less time to complete the IFRS transition, while large companies with numerous subsidiaries in different countries may take as long as five years."

U.S. companies that are among the 20 largest worldwide in "IFRS industries" — such as oil and gas and some retail sectors in which IFRS is the most-often-used financial-reporting system — are eligible to adopt the international standards as early as this year. The SEC has estimated there are at least 110 such companies.

But, according to the accountants, the SEC potentially should let all filers in an IFRS industry be early adopters. If any restrictions are imposed, their basis should be the significance of the company's foreign operations rather than on market capitalization, they added.

Finally, the comment letter noted that while the SEC's authority is limited to public companies, many private and not-for-profit entities likely will convert as well. The problem is the version of the international standards designed for them, which IASB expects to roll out later this year.

"Full IFRS and the proposed IFRS for Private Entities represent a Big GAAP/Little GAAP system," the comment letter complained. "The accounting profession in the United States has consistently rejected Big GAAP/Little GAAP over the years. Any decision in 2011 to adopt IFRS must adequately address this concern."

Related Articles

• Former SEC Chief Accountant Blames FASB for Meltdown
• The Human Side of IFRS
• Is the SEC Soft-Pedaling IFRS?
• Wrinkles in the IFRS Roadmap
• SEC: Early IFRS Adoption Will Cost Firms $32M

Related Web Sites

• NYSSCPA comment letter
• SEC roadmap

Financial Management in Turbulent Times

INTERNATIONAL FINANCIAL MANAGEMENT ASSOCIATION SUISSE ROMANDE
Geneva Switzerland

http://www.ifma-geneva.org

IFMA in conjunction with CIMA, are pleased to inform you of a full day workshop:

Financial Management in Turbulent Times
28th April 2009 from 8:00 until 17.15

SWISSOTEL METROPOLE HOTEL, 34 Quai du Général Guisan, Geneva.
The event qualifies for CPE credits. Programme attached.

This one-day workshop enables financial managers to focus on the most valuable tasks in business during the downturn. Understand the background to the current economic climate, likely future events and how they will impact upon business and grasp what actions finance departments can take to benefit the business as a whole, and what opportunities are created by the downturn.
___________________________________________________________________________________________________________

Tim Luscombe
Associate Member of the Chartered Institute of Management Accountants (ACMA), management consultant & speaker, presenter of seminars, workshops and training courses on financial management, corporate strategy and the financial challenges faced by organisations during both upswings and downswings in the economy.
With a background in financial and general management in industries from manufacturing to oil & gas distribution, Tim has the ability to distil complex situations and explain them in everyday plain English.

___________________________________________________________________________________________________________

Who will benefit
•Finance managers responsible for teams or departments
•Finance professionals wanting to add value & assist in their strategic decision-making
•Business advisors providing financial services to corporations

___________________________________________________________________________________________________________
What you will gain
•Understanding of the current economic climate, likely future events & their impact on business.
•A toolkit of actions that finance professionals can take to benefit their business as a whole
•View of opportunities created by downturn for smart organisations.
•Working capital management;
•Asset management,
•Forecasting and planning in a down turn.
___________________________________________________________________________________________________________

Admittance is by registration only and limited to 25, first come first served.
Please register by email by 22nd April to signup.ifma@gmail.com.
The event costs CHF 700; CHF 600 for IFMA Members. Payment in advance should be received by 22nd April, failing which we will open the reservation to people on the waiting list.

IASB updates fair value rules ...

The International Accounting Standards Board (IASB) has issued a range of amendments to disclosure requirements relating to fair value rules.

Under the changes, firms will now have to supply additional information about the relative reliability of their fair value measurements.

The amendments, which take into account the views of the G20 group of nations, brings International Financial Reporting Standard (IFRS) 7 into line with the equivalent US rule.

Sir David Tweedie, chairman of the IASB, said: "The financial crisis has shown that a clear understanding of how entities determine the fair value of financial instruments, particularly when only limited information is available, is crucial to maintaining confidence in the financial markets."

The changes announced today will boost the clarity of financial reports, Sir David added.

Amendments to IFRS 7 will apply for annual periods beginning on or after January 1st 2009.

Meanwhile, the US Financial Accounting Standards Board is also conducting its own review into how fair value rules can be improved.

IASB move 'will kill final salary pensions'...

Draft accounting changes proposed by the International Accounting Standards Board (IASB) will prove to be the death of final salary pension schemes, according to one expert.

Marcus Hurd, head of corporate solutions at Aon Consulting, believes that, had the changes been in place for 2008, final salary funds would have faced a net annual loss of £85 billion.

He explained that the move is "another hammer blow" for final salary pensions.

"Over the last few years they have had to deal with ballooning deficits and significant asset losses, but now the IASB has seemingly killed off any last chance of keeping this type of pension alive," he said.

In its discussion paper, Preliminary Views on Amendments to International Accounting Standards 19 Employee Benefits, the IASB proposes that firms should separate the components of defined benefit obligations and in plan assets.

The IASB also decided entities should disclose these components in their income statements.

Earlier this week, the International Accounting Standards Committee Foundation, which oversees the IASB, announced that its work will now be monitored by a board made up of representatives from global regulators.