The Hindu Business Line : More to mop up and more to sweep

THE auditor industry is cleaning itself up, reports AccountingWeb. Mops had to work faster because of various factors, such as the attention bestowed on the profession by the US Congress, creation of the Public Company Accounting Oversight Board (PCAOB), and the Sarbanes-Oxley Act.

Now, there is pressure from the PCAOB to take another look at CPAs' long-time policy of not being responsible for finding fraud. The Big Four accounting firms are "choosing clients more carefully, spending more time on each audit and dramatically increasing staff training".

One wonders if something similar is happening in India too.

Atlantic accountant

AFTER the Euro accountant, it is now the turn of the Atlantic one. EU's auditors can audit US companies and vice versa, after duly registering. AccountingWeb reports that beginning mid-July, EU companies that want to work on publicly-held US companies will have to register with the PCAOB, which will inspect the firms every three years to make sure they are meeting US standards.

Any news on reciprocity from Indraprastha Marg?

Laundry report

MONEY laundering regulations came into force on March 1 in the UK and one fallout has been the flooding of money laundering reports at the National Criminal Intelligence Service (NCIS) and the Revenue. These reports are from accountants about their clients who they suspect may be involved in money laundering or tax evasion, reports TaxZone.

"Accountants have been reporting possible money laundering cases to NCIS at the rate of 100 a day since the new rules mean they now have an obligation to report suspicious financial behaviour by clients."

If a similar law were in India, do you think our accountants would have beaten their UK counterparts?

First to file

KPMG filed the first corporate tax return. TaxZone notes that it has become the first firm of accountants in the UK to successfully pilot a fully working system for companies to approve and file their corporation tax returns via the Internet.

"The system works by computation calculation software generating the company tax return form (CT600) in computer readable language and sending it to the Revenue computer. On receipt, it can be read by the Revenue computer and the details do not have to be re-entered by clerical staff."

Bank alert

MORE than $1 trillion in non-performing loans (NPLs) has gone off the books of Asia's banks and asset management companies since the 1990s. But they have another $1 trillion in bad loans to resolve, says Ernst & Young in a recent report.

Asia's banks have succeeded in moving more than $1 trillion in NPLs off their balance-sheets since the region's financial crisis of the late 1990s. "Banks in Germany and other European countries are carrying at least $300 billion in bad loans." While the progress of Asia's banks is `remarkable', E&Y is of the view that they need to keep up the momentum. "They cannot afford to become complacent." Shockingly, China and Japan together account for about 85 per cent of Asia's NPLs.

Some relief for India for not topping the bad loan tally.

Shared secrets

GRANT Thornton's CEO Ed Nusbaum is one of 100 helmsmen to offer `secrets and advice' that form the content of a new book titled, Leadership Secrets of the World's Most Successful CEOs. "Identify what makes an organisation unique or better, formulate this difference into a vision, build a strategy around the vision, execute on the strategy, and constantly communicate the vision and strategy to everyone within the organisation," he says.

Other CEOs are from Starwood Hotels & Resorts Worldwide, Estée Lauder, Domino's Pizza, US Department of Commerce, American Red Cross, Xerox, Southwest Airlines and Hewlett-Packard, and so on. What's special is that Grant Thornton is "the only accounting firm featured".

Know your business

A RECENT study carried in CEO Views of Grant Thornton is about customer expectations. These expectations are on the rise, says the firm. Customers expect a businessman to be knowledgeable about his business and the client's. Showing industry knowledge and demonstrating return on investment is essential, says the study.

"Customers don't want to spend time educating you on their business so you can make the sale; you must know it coming into the process. To make a new sale today, you need to be savvy and to prove to the customer that the sale makes sense for them."

GlobeTrot@thehindu.co.in