Sanyo's Chairwoman Steps Down

Ms Nonaka, one of the most senior businesswomen in Japan and dubbed the country's answer to Carly Fiorina, was appointed chief executive and chairwoman in 2005 in a surprise move.
A former TV news anchor, Ms Nonaka had no hands-on experience in the electronics business or in corporate management.

Sanyo said last night she had resigned for "personal reasons" not directly related to internal disagreements over how the struggling electronics maker should handle its recent accounting problems.

The Securities and Exchange Surveillance Commission is probing whether the lossmaking company mis-stated its accounts.

Sanyo has said it could restate historical earnings for a three-year period before Ms Nonaka joined the company. "There have been internal debates as to how we should handle the problem, but her departure is not directly related to these debates," said a Sanyo spokesman at the time. Ms Nonaka could not be reached.

Sanyo revealed the investigation after local media reports suggested the group had exploited a grey area of Japanese accounting to conceal over $1bn of losses accrued in fiscal 2003.
Ms Nonaka's appointment came as a ground-breaking move in a male-dominated industry.
Observers questioned the appointment of an industry outsider with no management experience at a time when turning around the company's finances was critical.

Ms Nonaka soon made a splash with the public presentation of a bold restructuring programme to increase profitability, revive Sanyo's brand and overhaul its corporate culture of autonomous business units.

Critics applauded her verve and ambition, but held out for more detail. The strategy has yet to bear much fruit. The company's financial woes led to a Y300bn ($2.5bn) bail-out in January last year under which it issued preferred shares to Goldman Sachs, Daiwa Securities SMBC and Sumitomo Mitsui Financial Group.

The company is plagued by a falling competitiveness. Its main profit-earners, including digital cameras, mobile phones and batteries, have suffered sharp price falls and Sanyo has lost customers to rivals in each category.

During the accounting period under scrutiny, Sanyo accounts were audited by Chuo Aoyama, the accountancy firm punished in the wake of the Kanebo accountancy scandal and which handled the accounts of Nikko Cordial, the brokerage under fire for its accounting.

UK Budget 2007

good news for big business as small firms suffer

Chas Roy-Chowdhury, Head of Taxation at ACCA, said: “This is a very surprising Budget from a Chancellor who claims to be a friend of enterprise. It seems to be a case of robbing small business Peter to pay big business Paul.”
ACCA’s comments on specific measures outlined in the Budget Speech include:
Cutting the corporation tax rate, dropping from the current headline rate of 30% to 28% in April 2008 – should have gone further
The UK is now one of Europe’s most heavily taxed countries, so in the interest of global competitiveness, the move to reduce the headline rate of corporation tax by 2% is a step in the right direction. But companies will not see this benefit until 2009, when they pay the reduced rate of tax. However, future Chancellors should address the UK’s relatively poor record amongst many of its EU counterparts when it comes to innovative and business-friendly use of deductions and allowances in the corporation tax system.
Small company tax rate increasing from 20% to 22%
This is no encouragement for the small business sector, which represents 99% of businesses in the UK. While bigger companies will benefit from the corporation tax rate, small companies are facing an increase.
Roy-Chowdhury commented: “This decision flies in the face of the Chancellor’s previous aim to encourages more businesses to incorporate and shows an irrational hostility to micro enterprises.”
Lowering the basic rate of income tax from 22% to 20% in April 2008
Although a welcome move, by setting this rate, the Chancellor has, in effect, tied the hands of his immediate successor.
Aligning the top rate of Income Tax and National Insurance to £43,000
The Chancellor should have gone further and addressed the technical differences between PAYE and NIC rules, which cause SMEs headaches in payroll administration. The two accounting systems should be merged, particularly given the fact that with an imminent National Pensions Savings Scheme, SMEs face a three-tier payment system unless action is taken.
Capital allowances changes
Short-term ‘chopping and changing’ with allowances serves overall to increase complexity and red tape for businesses – they will now have to spend a lot of time finding out what allowances have been taken from them and what new ones they are eligible for – with the probable outcome that there will be little difference in their financial situation at the end of the process.
Failure to raise the stamp duty threshold
The Chancellor has again failed to raise the threshold and change the fundamentally illogical system whereby a £249,000 house purchase deal is subject to 1% tax, while a £250,000 purchase incurs a 3% charge on the whole price.
As well as an exemption limited to carbon zero new homes up to the value of £500,000, Brown should have used his last Budget to make a real difference and revamp the whole stamp duty system, making it more like the Income Tax system, where only the amount over each threshold band is subject to tax at that rate, not the full property price.
Increasing the inheritance tax threshold
House price inflation continues to run at a much higher level than the overall inflation rate and the inheritance tax threshold is failing to keep pace, which is seen by many as one of the greatest injustices in the tax system.
An impressive legacy for the Chancellor to leave would have been to extend to inheritance tax the exemption that applies currently to the individual’s main residence under capital gains tax. Making the main residence exempt from inheritance tax would remove one of the greatest inequities of the inheritance tax system and reduce the burden on ordinary taxpayers and their families.
Chas Roy-Chowdhury, Head of Taxation at ACCA, said: “The Chancellor’s moves on stamp duty and inheritance tax - while welcome - represent missed opportunities to fundamentally reform the significant injustices in both these important areas and for him to leave an impressive legacy.”
ISAs – could do more to encourage a savings culture
Roy-Chowdhury commented: “Increasing the cash ISA limit from £3,000 to £3,600 in April 2008 is a step in the right direction, but fails to send a convincing message that the Government backs savers. ISA limits should have, at the very least, been increasing with inflation since their introduction in 1999.”

ACCA Backs EU Review of Audit Liabilit

Any reform should not restrict the rights of shareholder bodies and other legitimate plaintiffs to bring proceedings against a negligent auditor,” added Davies. “It should, rather, aim to ensure that the auditor is not seen as the guarantor of shareholders’ losses, as has effectively been the case in the past. Any EU-wide reform should also be broadly-based and ensure a level playing field for the audits of quoted and unquoted companies alike.”

ACCA accepts the principle of proportionate liability, assuming that an auditor is guilty of negligence, that this causes an economic loss and that the courts uphold a liability responsibility upon the auditor. Proportionate liability is “fairer than a monetary cap”, says the ACCA submission.

Proportionate liability is also consistent with the reality that the auditor is never the only party involved in a financial mis-statement. It must always be remembered, says ACCA, that “the management of the audited company has its own separate legal responsibilities in relation to the preparation of the accounts” and that, inevitably, “the management will be at fault” for any defect in financial statements at least as much as the auditor, if not more so.

“For auditors to be liable not only for their own mistakes but those of others is, in our view, unsustainable,” the submission emphasises. “It has led to the creation of a situation whereby auditors are sued by plaintiffs not because they are the party that is considered to be the party most at fault but because, via the insurance cover that professional rules require them to hold, they are the party that is most likely to be able to pay.” The adoption of proportional liability would not prevent innocent plaintiffs pursuing legal action against others who might also have been negligent and partially responsible for a loss, points out ACCA.

Global Delivery, Global Opportunity

ACCA is now the international market leader by size in 47 markets and, based on independent surveys in 15 markets, it has increased its reputation among employers of accountants over the last five years. ACCA achieved its growth targets in 2006, with a 13.8% increase in total student numbers and 5.3% increase in total members. All these achievements make ACCA the world’s largest and fastest-growing global professional accountancy body.
ACCA has achieved this position by focusing on global delivery and global opportunity. ACCA’s global infrastructure means that exams and support are delivered at local level, together with reputation and influence building, directly benefiting stakeholders wherever they are based - or plan to move to in pursuit of new career opportunities. More importantly, ACCA has developed according to a unique set of values which set it apart in the accountancy profession - in particular, by championing opportunity, diversity and integrity.

Highlights of 2006

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In 2006, ACCA expanded its global accountancy partnerships. New mutual recognition agreements (MRAs) were agreed in Canada and Hong Kong with the Certified General Accountants Association of Canada (CGA-Canada) and the Hong Kong Institute of Certified Public Accountants (HKICPA). Of particular significance is the range of partnerships ACCA now enjoys, with agreements relating to joint qualifications, regulation, continuing professional development, technical research and the promotion of further qualifications, such as the Diploma in International Financial Reporting. New contracts obtained to support regional and national bodies in delivering quality assurance and audit monitoring have helped to position ACCA as a global leader in audit regulation: ACCA now works with the East, Central and Southern African Federation of Accountants (ECSAFA), the Institute of Certified Public Accountants of Cyprus (ICPAC) and the Malta Institute of Accountants (MIA).

ACCA redesigned and launched its professional qualification, with a greater emphasis on professionalism and ethics at its core, increased flexibility with respect to specialist options, and a new framework for practical experience requirements, based on competences and the achievement of performance objectives.

ACCA's platinum sponsorship of the World Congress of Accountants in Istanbul, organised by the Turkish accountancy profession and the International Federation of Accountants, demonstrated that ACCA is a leading voice in the global accountancy profession.

A range of new partnerships with professional bodies and academic institutions (including e-learning) have extended the opportunities for members to obtain further professional development to acquire specialist skills or qualifications in broader strategy. With 78,900 members having commenced their CPD requirements under ACCA Realise in 2005 and 2006, attendance at ACCA-organised CPD events has increased to over 88,000. ACCA was pleased to announce a global partnership with the Securities and Investment Institute, providing members with access to additional qualifications and services in the financial services sector.

ACCA provided significant input into legislative developments in many countries, especially in relation to accounting standard interpretations in the UK.
Work continued to ensure ACCA is an efficient and effective organisation, through a restructuring of the customer services operation, investment in global technology infrastructure, and realised savings of £800,000 through outsourcing print and distribution of printed materials in the UK.

For further details visit:
http://www.imakenews.com/eletra/gow.cfm?z=accamember%2C168794%2Cb4pWgTbs%2C1296631%2Cb99NmjP

Boost your ethical fitness

When making your annual CPD return, you are required to complete a declaration stating ‘I have maintained and, where appropriate, developed my competence in relation to professional ethics’. A commitment to an ethical approach is not just a requirement of ACCA Realise. Good conduct is good for business too –making the right decision can be beneficial to you, your clients and colleagues, and your organisation.
But where do you source the support you need to make this declaration?
ACCA’s global website – accaglobal.com – has an entire section dedicated to professional ethics. Designed specifically for ACCA members, the online resource provides guidance and advice on how to approach and resolve any ethical challenges you may face in the workplace.
ACCA’s ethics resource offers a broad range of learning opportunities and activities, including:
online courses and podcasts – offering learning beyond the constraints of time and place
case studies - descriptions of ethical events at a range of organisations, featuring questions for discussion
ACCA’s perspective on corporate social responsibility ethics in the news useful articles about ethics.
To boost your ethical fitness, and earn CPD units, visit http://www.imakenews.com/eletra/gow.cfm?z=accamember%2C168794%2Cb4pWgTbs%2C1296643%2Cb99NmjP

IIA Membership for ACCA Members

ACCA members will be able to enjoy both local and IIA Global benefits including a discount on their first year's membership fee if they reside in the following areas: UK, Ireland, US, Canada, Caribbean and Malaysia. Members residing outside these locations may be eligible to join IIA Affiliates locally orjoin IIA Global if there is not an IIA Affiliate in their region.

In addition, ACCA members will have a unique opportunity to gain certification during 2007. Members based in the UK and Ireland will be eligible to gain the Advanced Diploma in Internal Auditing and Management through a special fast-track exemption route and examinations that will be held in June and November 2007. Members based elsewhere will be eligible to gain the Certified Internal Auditor (CIA) qualification on the basis of successful completion of a challenge exam which will be held in November 2007.

Clare Minchington, ACCA's managing director, education, learning and development, said: “This is an exciting development which will enable ACCA members to register as professional internal auditors with The IIA under one membership model. The IIA and ACCA are truly global organisations, with synergies which make is ideally suited to a joint arrangement such as this. The benefits are clear for ACCA members, and we look forward to working with The IIA in the future.”

Jo-El La Borde, director of membership from The IIA, said: “This new model offers a streamlined approach for IIA enrolment on a global basis delivering robust opportunities for members to join IIA affiliate networks or the option to join IIA Global directly. The IIA looks forward to continuing this relationship as we together enhance the profession of internal audit.”
For further information, click on the link below

IIA Membership for ACCA Members

New York could Lose Role as Financial Capital

London is set to overtake New York, because of the US vulnerability to litigation and heavy regulation, according to Bloomberg – backed by New York Governor Eliot Spitzer and Senator Charles Schumer.
The report concludes that today's trends, unchecked, would lead to the loss of between $15bn and $30bn in financial services revenues a year by 2011, with related losses of between 30,000 and 60,000 jobs.
As well as suffering from the impact of Sarbanes-Oxley, the report suggests that the United States' market advantage has been eroded by improved overseas markets and more sophisticated technology that have “virtually eliminated” barriers to the international flow of capital. Meanwhile, new barriers to the US competitive position have emerged and are “self imposed”, says the report. These include visa restrictions on overseas workers, preventing the recruitment and retention of skilled staff.
Recommendations in the report concentrate on improving the legal and regulatory environment, with particular attention to accounting rules. IFRS should be recognised for listing purposes without the need for reconciliation, with faster convergence of accounting and auditing standards, says the report. Measures should also be taken to improve the authority of the Securities and Exchange Commission and more should be done to attract international capital and resolve long-term structural issues, with a public private partnership established to further promote New York as a financial services centre.
"Our capital markets and financial services firms will only enjoy continuing growth - growth that our city expects, needs and demands - if we take seriously the challenges from rapidly-expanding competitors in Europe and Asia," said Bloomberg – who is widely expected to run a campaign for the Republican nomination for President.
"The financial markets are a cornerstone of New York State's economy yet, as the study illustrates, we are in danger of losing our pre-eminence as the financial center of the world," said Governor Spitzer, a Democrat. "We must take these recommendations seriously so as to support an economic climate ripe for financial services while continuing efforts to safeguard the market for investors.”

ACCA Welcomes Commission's Move on Auditor Liability

Roger Adams, Executive Director - Technical, said: "ACCA has consistently made the case for reform of the liability laws to prevent audit firms being potentially wiped out due to a catastrophic claim, which under the concept of joint and several liability they might have to pay the whole amount of, even if others were mostly to blame for a company collapse.

"We disagree strongly with those who say that it is only the threat of litigation that keeps auditors on their toes. Restricting liability will not reduce audit quality - on the contrary, it will in the long-term improve it by ensuring that audit firms do not drop out of the market due to unacceptable risk."

He added: "Ideally, our preferred option from the Commission's alternatives, would be a system of proportionate liability. Contracts entered into under such a system would establish a fairer basis for determining an auditor's liability for negligence since the new arrangements would implicitly provide for the responsibility of all parties involved in causing financial loss to shareholders to be taken into account by the courts. It would also level the global playing field for audit as firms do not have to compete on the level of liability cap.

"It must be remembered that the whole audit process exists to protect the interests of the company's shareholders. In view of this, it is vital that any initiative which would affect shareholders' rights of redress where they have suffered loss be made subject to their explicit approval. It is essential that the two sides enter into a liability limitation agreement freely and without undue influence from either side."

ACCA Responds to the Stern report

While Sir Nicholas Stern's report shows "what counts" for the global economy, accountants must rise to the challenge of "who counts" the ongoing costs of environmental degradation.

Blewitt commented: 'The contribution of the accountancy profession to date has been significant, but more must be done. Despite the government's unfortunate rejection of the Operating & Financial Review, a reasonably robust model for the Business Review still exists and can be used for mandatory disclosure of carbon emissions.'

The letter also includes four of practical suggestions for the future:
Greater emphasis on the true sustainability of reported profit levels will gain more general market acceptance if accountants can improve our ability to quantify, internalise and report on the financial consequences of social and environmental impacts

While ACCA can advise on how an enhanced range of green taxes can be formulated, transparency on where the money goes must be integral to this approach. People need to be reassured that their green taxes are ameliorating "catastrophic climate change"

Formal targets can be set for "greening" the supply chains of public sector organisations, building on the work already done by the government itself in this area

Finally, the government must propose robust models for personal carbon trading markets, so as to avoid any repeat of the privatisation voucher-type scandals seen after the collapse of the Soviet Union.

Student Engage 2007

Student Engage - your opportunity to ask questions about the new ACCA Qualification.



January 2007 marked the introduction of the new ACCA Qualification. Clare Minchington, managing director - education, learning and development and Stephen Heathcote, director of learning and development, will be available to answer your questions about the qualification in a live broadcast via ACCA 's website on 11 April 2007 at 12.00 GMT (13.00 BST).

student engage will provide you with the opportunity to put forward your questions on any aspect of the new ACCA Qualification - from the structure of the syllabus or practical experience requirements, to progression rules and conversion arrangements.

Do you have any query regarding the New ACCA qualification, submit it on the Student Engage Site

New postgraduate qualification in Public Financial Management

New postgraduate qualification in Public Financial Management is now available.

The agreement is part of ACCA’s strategy to link with internationally-respected universities and provide ACCA members with opportunities to undertake relevant postgraduate training as part of ACCA's commitment to CPD. The link with SOAS adds to ACCA’s existing links with Exeter University, Oxford Brookes University, Saïd Business School at Oxford University, and the University of Cambridge.
The Postgraduate Diploma in Public Financial Management is designed to enable an individual to advise on and make financial decisions and policy choices in relation to the financing and management of public infrastructure and services. It provides invaluable preparation for high-achieving employees in governments, public services, international organisations and NGOs.

The programme is endorsed by ACCA and will be attractive to members and affiliates who wish to gain further education in public finance. All ACCA members and affiliates are eligible to take the Diploma and will receive an exclusive discount of over 5%.

For further information on this qualification, please visit

http://www.cefims.ac.uk/