The Hindu Business Line : Sixteen going on accoun-teen!

UNBELIEVABLE but true. Accountancy reports of a survey that finds teenagers holding accountancy in high esteem as "one of the top sectors in terms of career progression" though "over 80 per cent do not feel they understand what the job entails or whether they have the right qualifications." The survey by the Foundation Degrees Organisation found legal and IT professions trailing behind accountancy. Though the students were prepared to work long hours to get to the top profession of their choice, a good percentage perceived the field as male-dominated. Other findings: "Qualifications and skills/vocational training are the greatest assets in today's recruitment environment. Long-term benefits such as pension and health insurance are more important in their job choice than short-term benefits such as a company car or gym membership."

404 - Found!

AS error code, 404 is `Not Found'. But that is the name of a new forum that KPMG has founded to help corporates meet the requirements of Section 404 of the Sarbanes-Oxley Act. This section calls for companies to meet key requirements for their internal financial reporting controls by November 2004. "A key goal," of the Institute, therefore, is "to aggregate the wide array of knowledge and information on internal controls and the evolving financial reporting environment". AccountingWeb reports that an advisory council comprising corporate and industry executives, as well as representatives from universities and business schools, is to help establish the Institute's priorities and provide oversight for its activities.

Sole scam

`CORPORATION Sole' is the cloak of new scamsters that the taxman is warning people about in the US. Law gives tax benefits for legitimate religious groups and church leaders operating as corporation sole. What schemers do is to establish sham one-person non-profit religious corporations, posing as `bishop' or `overseer', with the idea of getting tax exemption. AccountingWeb notes: "The scheme is currently being marketed through seminars with fees of up to $1,000 or more per person."

Bankruptcy wave

TO get company directors and sole traders back on their feet quicker and easier after a personal bankruptcy process, the Enterprise Act has come into force in the UK. As a consequence, it is feared that there would be a spate of bankruptcy applications from individuals with consumer debts. As in divorces, there is an innocent category of bankrupts, the other being `culpable'. Innocents will go through less hassle. Statistics speak of `runaway levels' in personal insolvencies in 2003 end, rising almost 30 per cent compared to the previous year. Many with huge credit card debts are eyeing the new law as a rescue but may be disappointed.

SOCA shock

THAT'S the abbreviation of the new Serious and Organised Crime Agency in the UK. And it will target `professional facilitators' — the ones relied upon by sophisticated organised crime especially in money laundering, fraud and cases where illegitimate business is mixed with legitimate business. Advocates of client confidentiality are shocked that SOCA is talking about combining information in the possession of the police and the Inland Revenue, to produce "a formidable new tool for the disruption of organised crime groups."

Fine fear

RECENTLY, the Financial Services Authority (FSA) in the UK imposed a stiff fine on a company for failing to issue a profit warning on time. If that became a precedent, thousands of directors could face a similar fate, warns a report in Accountancy. Suggestion to directors, therefore, is "to reduce their dependence on traditional management accounts which only focus on historic, financial information" because a review of forward-looking data is equally important.

Confidence misplaced

ONE in three large businesses in the UK had their Web sites attacked by hackers last year, states a PricewaterhouseCoopers survey. "Businesses that were scanned by PwC reported an average of one probe by hackers each week, while 4 per cent said their systems had been penetrated." More than financial loss or service disruption, companies were concerned about "the time spent on investigation and remedy — a quarter took between two and 10 man-days of effort". Though many businesses are confident about facing attacks, PwC believes this confidence may be misplaced because many organisations do not test their network security.

Vanishing game

ONE out of every four accountancy firms will disappear "as partners sell out or merge to provide a retirement income", observes a survey conducted by KATO Consultancy in association with Accountancy. "For 28 per cent of firms there is only one option: Sale or merger." Among the serious issues facing firms are: "Pensions are shrinking, there is insufficient capital to pay out retiring partners, a shortage of high quality new partners prepared to buy in and no possibility of continuing independence." And they are going to work till they drop. "Almost all the respondents thought they would need to work until 60 or 65 or even 70."

GlobeTrot@thehindu.co.in