Accounting can be door to professional class

Ernst and Young HQ in Munich, Germany

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WASHINGTON, Oct 16 (Reuters) – When Gemma Urquiza interviewed for her job at True Partners, a Chicago tax and consulting firm, she remembers talking about her university honors, her ambitions and her dad’s restaurant.

Urquiza, 25, is the eldest of four children of Mexican immigrants and, like many first-generation Americans, she’s found accounting to be a perfect fit.

Her employer likes her work ethic and multicultural upbringing, as well as her technical mastery and spreadsheet savvy. She likes the variety of the job and its stability.

Accounting has long provided a path for first-generation Americans into the professional classes. Good pay and a focus on numbers makes it an attractive career choice.

Still, recruiting the children of immigrants is complex, say some Certified Public Accountants (CPAs). Parents’ opinions are influential and they often don’t know the field, a problem that alternatives like medicine or the law don’t face.

Once on the job, first-generation CPAs can face new challenges like decoding the relationship-driven, sometimes self-promotional American business culture.

As accounting firms rev up recruiting efforts on college campuses this fall, there is rising demand for multicultural candidates like Urquiza to match an increasingly global focus.

“It’s important to have talented accountants that reflect the demographic of a global economy.” Ken Bouyer, Ernst & Young Americas director of inclusiveness recruiting, told Reuters.

Specific figures on first-generation CPAs are hard to come by, but the biggest firms are spending millions of dollars on a diversification push that’s trying to reach minorities in college, high school and even as early as grammar school.

At a time when it is tough for many new graduates to find work, the Big Four accounting firms — PwC, Deloitte, Ernst & YoungKPMG– report they expect to hire more than 30,000 graduates this year.

via Accounting can be door to U.S. professional class | Reuters

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AFS and Tax Return always required

The Johannesburg Stock Exchange building.

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THE new Companies Act along with the International Financial Reporting Standard (IFRS) for small-and medium-sized enterprises (SMEs) can help reduce audit costs and simplify financial statements, according to Deloitte.

“To a degree an audit is no longer a grudge purchase,” Deloitte said in a statement yesterday.

Deloitte Western Cape partner Geoff Fortuin said: “Despite the fact that the IFRS for SMEs and the new Companies Act have made financial reporting simpler and more cost- effective through less stringent financial reporting requirements, many businesses still don’t understand what options are available and how the new legislation and standards interplay to their benefit.”

The IFRS for SMEs became the first set of international accounting requirements prepared specifically for SMEs in 2009. It was devised in response to demands by users of international accounting standards for a less onerous financial reporting framework for SMEs.

After the global transition to the IFRS, issued by the International Accounting Standards Board, all JSElisted companies were required to report under IFRS to ensure firms globally made the same levels of disclosures and used the same conceptual approach when reflecting their financial results. These requirements are however not mandatory for unlisted subsidiary companies of listed entities, which may elect to use the IFRS for SMEs.

This could cause some difficulties with the group consolidation process, but suitably designed year- end group reporting packs can be used to overcome this.

The South African Institute of Chartered Accountants has said the IFRS for SMEs is suitable for all entities that prepare general purpose financial statements (not tailored to the needs of any one group). The new Companies Act, which came into effect in May, has also introduced more flexibility in the audit requirements for companies.

Whereas all public companies and parastatals will be required to conduct audits as was the case under the previous Companies Act, there are more accommodating requirements for a large proportion of private companies. These depend on their level of turnover, debt and number of employees.

These factors determine the entity’s public-interest score which in turn determines whether the company’s financial statements must be reviewed or audited. In certain limited circumstances, the new Companies Act requires neither an audit nor a review to be performed.

via BusinessDay – Company Act ‘offers way to cut costs’

China’s accounting problem

KPMG offices in Leeds, West Yorkshire, UK. May...

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The Big Four — PwC, Deloitte & Touche, KPMG and Ernst & Youngaudit the books of most of the world’s largest corporations through networks of legally separate audit firms. Their Chinese arms, which also audit Chinese operations of large multinational companies, have also been beyond the reach of PCAOB inspections.

via Analysis: Painful choices loom on China’s accounting problem

New Companies Act supports honest directors

COMPANY directors who act honestly and reasonably while performing their duties under new company laws could have a valid defence if they face possible legal and criminal action, says a legal expert at Werksmans Attorneys.

Eric Levenstein, a director at Werksmans, said last week that directors who met their obligations and were able to show that they had discharged their obligations, would be able to defend themselves by showing they acted on the company’s behalf in a “reasonable” way.

“Personal liability is becoming an increasingly emotive issue for directors. They need to be aware of the circumstances in which they can be held responsible for company debts,” Mr Levenstein said.

The new Companies Act, which came into effect on May 1, penalises directors and holds them personally responsible for any losses incurred through knowingly carrying on business recklessly, or with the intent to defraud creditors and other stakeholders. It also created criminal liability for directors trading in a manner calculated to defraud creditors, Mr Levenstein said.

However, a director who meets his obligations under the new legislation would be seen as discharging his duties to the company.

George Tweedy, audit risk leader and national professional practice director at Deloitte, said the new laws also contained defence mechanisms for directors who had made bad decisions at board level.

Mr Tweedy said the new “business judgment” rule would give directors more protection from civil actions unless they were guilty of fraud or other unlawful activities.

“The Companies Act provides that a director will have satisfied his duties if he took reasonably diligent steps to become informed about the matter, does not have a personal financial interest, and has made a decision rationally in the belief that it was in the best interests of the company,” he said.

Mr Levenstein said: “Embracing honest, reasonable standards and meeting the requirements of the Companies Act would ensure that decisions made were defensible.”

via BusinessDay – New act ‘supports honest directors’.