Mario Christodoulou, Accountancy Age, Friday 3 September 2010 at 10:37:00

US audit regulator will have access to confidential inspection reports

US audit regulators will be able to inspect European firms after the European Commission cleared the way for access to confidential papers, in a move which could allow Lehman Brothers investigators to follow up leads in London.

The European Commission said it will now share internal working documents with audit watchdogs in the US and Australia. The move breaks an impasse which had emerged between US and EU authorities over the sharing of confidential internal audit inspection papers, retained by regulators when they inspect audit firms.

In the past, the European Commission barred access to US inspectors because it felt the US was blocking access to its internal inspection documents.

The passage of the US financial reform bill through the senate freed access to the inspection documents, which in turn led European authorities to green light US inspections of European based audit firms.

In a statement, the European Commission said auditing has moved beyond national borders and international co-operation was ?necessary to ensure that high quality audits are carried out worldwide?.

Michel Barnier, EC internal market and services commissioner, said the decision will allow co-operation of European auditor oversight bodies and their US and Australian counterparts.

?The exchange of audit working papers is an important step in moving towards our ultimate objective of equivalent rules and mutual reliance on each other's audit oversight systems,? he said.

The US audit regulator, the Public Companies Accounting Oversight Board (PCAOB), will now be able to inspect the audits of US registrants including Vodafone, BHP Billiton, HSBC, Barclays and BT.

The move will also free up the investigators examining the audit of collapsed Bank Lehman Brothers, to inspect the UK component of the bank?s audit.

Controversy surrounding the Lehman audit centres on use of repurchase transactions, known within the bank by the slang ?Repo 105s?, which attracted criticism in March when a report claimed they were used to distorted the bank?s reported financial position.

Repo 105s were channeled through Lehman?s UK arm, Lehman Brothers International Europe (LBIE), and were likely audited, in part, by the Ernst & Young?s UK arm.

E&Y has defended its audit throughout and said it stands by the work it did for the bank, and would co-operate with any investigation.

The US audit regulator, the PCAOB, has neither confirmed nor denied whether it is investigating Ernst & Young?s audit of Lehmans in line with their policy not to comment on investigations.

Further reading:

Lehman investigation blocked by US-EU regulator stand-off

Transatlantic audit row between regulators rages

Barnier: we?re not blocking US watchdog

Santhie Goundar, Accountancy Age, Friday 3 September 2010 at 10:05:00

O'Sullivan tells his stories from 20 years working for the taxman in the Midlands and Wales

A former tax inspector has written a book about his time investigating tax avoiders and evaders.

The book, titled The Artful Tax Dodger: It?s your pocket they?re picking, has been written by John W O?Sullivan, who spent twenty years working for HMRC investigating serious tax evasion and fraud throughout the West Midlands and Central Wales.

Publishers Troubador has described the book as ?colloquial, anecdotal and irreverent in approach with a view to engaging, informing and hopefully entertaining? and provides ?an ironic take? on the inequities of the legislation, the idiosyncrasies of the administrative arrangements of the system, and the experiences and feelings of the functionaries who work within it ".

The book will be published on 6 September and is available in hardback at £17.99. Further information concerning the author and his writing can be found on the publisher?s website at: http://www.troubador.co.uk/book_info.asp?bookid=1172

Accountancy Age, Accountancy Age, Friday 3 September 2010 at 10:01:00

FASB Insider could new head of US standard setter FASB

The technical director of FASB, the US standard setter, has emerged as one the lead contenders to lead the organisation after it was revealed that the current chairman is to take early retirement.

According to the Wall Street Journal, Robert Golden is being considered by the foundation that manages FASB appointments.

Chairman Bob Herz leaves later this month after surprising observers with an announcement that he would take early retirement. He was due to leave in 2010.

Herz had a critical role in negotiating the convergence of US standards with their international counterparts.

Close watchers believe that the new chairman will give a clear indication on which way the US will go on convergence and whether it will finally sign on accepting international standards as a viable replacement for US GAAP.

There remains stiff opposition in US markets and companies to full convergence with international standards given that only a small proportion do business internationally.

Golden was partner at Deloitte before joining FASB in 2004. He became technical director in 2008.

Read more:

Herz departure could speed up convergence

FASB chief to retire early

Kevin Reed, Accountancy Age, Friday 3 September 2010 at 09:51:00

Hays profits fall, but a strong second half bodes well for the future

Year-end operating profits at Hays fell to £80.5m, compared to £158m in 2009.

Despite the tough market conditions, Hays said that recovery had been strong in the second half of the financial year, to 30 June. The outlook across the UK private sector market, along with 90% of it total markets, has improved.

"During the downturn we invested in building a stronger, more efficient and broader based business, and with our major investment programmes now substantially complete, this ideally positions us to capitalise on the significant growth opportunities that are increasingly present across our markets," said Hays chief executive Alistair Cox.

Hays' profits do not include exceptional charges of £41.1m, comprising £29m relating to the OFT fine that is currently under appeal and £12.4m non-recurring restructuring costs related principally to a UK back-office automation project.

Hays was fined by the OFT for operating within a cartel in the construction jobs market.

More than 200 consultants were added to Hays' roster in the second half of the year.

Further reading:

Former Smiths FD takes Hays role

UK results contrast for Hays and Robert Walters

David Jetuah, Accountancy Age, Friday 3 September 2010 at 09:45:00

Christina Rawlinson, a fellow of the Association of Chartered Certified Accountants brought in as non-executive director at the 3D

3D Diagnostic Imaging has brought in Christina Rawlinson as a non-executive director with immediate effect, the dental scanning company said today.

Rawlinson is a fellow of the Association of Chartered Certified Accountants.

Graham Lay, CEO of 3D said, "Chistina's appointment strengthens our board further, broadening our skills set and putting 3D in the best position to grow."

Further reading:

ICAS president says non-execs must grill company top brass