Accounting fraud on the rise

The logo of KPMG.

Smaller finance teams, more stressed companies and complex reporting rules are leading to more mistakes in mid-size and small company financial records, raising the risk of fraud going undetected, says an auditor.

A bi-annual survey of fraud in Australia and NZ by KPMG, released on Thursday, shows the level of fraud by individuals of more than $1 million rose 82 per cent between 2010 and 2012, while fraud by internal staff rose to 75 per cent of the total from 65 per cent.

via Warning on accounting fraud as pressures rise.

Saica welcomes Companies Act

South African Institute of Chartered Accountants

The SA Institute of Chartered Accountants (Saica) on Thursday welcomed the new Companies Act as good for small business.

Small and medium-sized companies which had previously been obliged to bear the cost of an audit might now be exempted as the act introduced new criteria, said Saica.

The decision would depend on a newly-introduced public interest score.

“Under this system, a company is allocated points according to the number of its employees, its annual turnover, its stakeholders and the level of third party liabilities at the end of the financial year,” Saica spokesman Ashley Vandiar said.

Points are given for the average number of employees throughout the year, one point per million rand of debt financing, one point for each million rand of turnover, and one point for every individual with a beneficial interest, including shareholders.

Companies with 350 points or more must be audited.

Any company, regardless of point scores, with more than R5 million held for a client in a fiduciary capacity also had to be audited.

Companies scoring between 100 and 350 points must have an independent review conducted by a registered auditor or a chartered accountant.

Those scoring less than 100 are required to have an independent review conducted by anyone who qualifies as an accounting officer, unless circumstances indicate otherwise.

Close corporations are treated the same way as companies.

The cost savings for companies exempted from an audit should be ploughed back into the business or used to reduce debt, said Vandiar. – Sapa

via Saica welcomes Companies Act – Business News | IOL Business | IOL.co.za.

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Zuma urges opening up of world economy

CAPE TOWN/SOUTH AFRICA, 12JUN2009 - Jacob Zuma...

Johannesburg – World markets must open up to the least developed countries that had become “innocent bystanders” of the global financial crisis, President Jacob Zuma said on Thursday.

“We feel strongly about the need to open up the world markets in order to stimulate the recovery of the global economy,” he told a business meeting in France.

“The participation of low-income countries in global trade is crucial for their growth and poverty reduction endeavours,” Zuma said.

The meeting took place on the sidelines of the G20 Summit in Cannes.

Zuma said change was inevitable in order to curtail the effects of the crisis and “realistically” attain a higher and more equitable growth.

“We believe that this current crisis should lead to a realisation that change is inevitable. Balanced growth is just as important as strong and sustainable growth.”

Addressing growth was not possible without first dealing with the root causes of imbalances in the global economy.

“To this end, we need stronger commitments from large deficit and surplus countries to do a number of things.”

These included strengthening the fiscal policy environment, maintaining appropriate monetary policies and refraining from protectionism.

Zuma said surplus countries should support investment in developing and low income countries.

This would contribute enormously to promoting development, poverty reduction and decent work.

“Populations in emerging economies and least developed countries will continue to be subjected to harmful and excessive economic volatility and risks until agreement on these often divisive issues is reached within the G20,” Zuma said.

via Zuma urges opening up of world economy: Fin24: Economy