The Hindu Business Line : Cost rewards with security risk

THE BPO bug is "infecting" the accounting field in a big way, fear the US professionals. According to one estimate, Indian CAs will prepare 1.5 lakh to 2 lakh returns this year, up from about 20,000 last year and only about a thousand in 2002, states The New York State Society of Certified Public Accountants (NYSSCPA). "The average accountant in India makes $250 to $300 per month, compared with $3,000 to $4,000 in the US," and spells cost advantage for those opting for BPO. Critics lobby for fairer opportunities for CPAs in the US; also, they argue that BPO exposes "unwitting Americans to identity theft, which the Federal Trade Commission ranks as one of the country's fastest-growing crimes."

They are not giving any equation as yet about how many American CPAs equal one Indian CA, perhaps because that could make the protests grow shriller.

Flip flop

FLIP, OPIS and BLIPS. What are these? Not radar lingo, but acronyms of tax shelters sold by KPMG to wealthy individuals. Regulators are looking at these with much suspicion because these are complex strategies "designed to create often-large paper investment losses to offset unrelated taxable income", notes www.nysscpa.org. FLIP stands for Foreign Leveraged Investment Program, OPIS for Offshore Portfolio Investment Strategy, and BLIPS for Bond Linked Issue Premium Structure. There are more such schemes with catchy names: COBRA, BOSS, Son of BOSS, TRACT, SC2, PICO, CARDS and COINS.

Stock leash

GOOD governance is about being good and also being seen as good. So, IBM has decided to impose a restraint to its stock options: Its executives can cash out only if the company's shares goes up more than 10 per cent. This would make the top executives "more accountable to investors," feels the company. How? By letting "shareholders get some upside" before they take the upside. What about downside?

Cap demand

THE big accounting firms in the UK are too worried that some big liability claim will wipe out one of them. So, they are lobbying with the government to safeguard themselves against "catastrophic litigation". One suggestion is that auditors be given "some form of liability cap". If only this were in place before Andersen collapsed.

ICAEW to launch IAS exams

EVEN as the ICAI is busy with ISA, the ICAEW in the UK is busy with IAS exam. Not the one for churning out bureaucrats but International Accounting Standards. ICAEW's new testing and certification programme on IAS would be "open to anybody who needs to demonstrate proficiency in the standards, not just qualified accountants and ICAEW

members". The "two-tier assessments will provide an `external stamp' of a person's understanding", according to the ICAEW. "The certificate level will demonstrate candidates' `knowledge and understanding' of all the existing IASs/ IFRSs, and show that they can apply them in simple circumstances. The assessments will be taken online at designated centres around the world, and the examinees will be presented with their certificate on the spot. The diploma level will demonstrate higher level skills and the application of the standards in more complex situations. The assessments will initially be offered in English only, but the ICAEW may expand this to other languages in the future." Don't be surprised, therefore, if a kiosk comes up soon on Indraprastha Marg, Delhi, to offer IAS exam in Hindi.

GlobeTrot@thehindu.co.in