The Hindu Business Line : Taxes on arms sales, affinity credit cards and a global lottery

The near-term outlook for global growth and inflation and the current balance-sheet strength of financial institutions provided a positive backdrop for financial stability, noted the Forum, and added that market participants need to closely monitor and manage evolving risks, including through stress-testing of exposures to more adverse scenarios.

The Forum also "noted progress towards international convergence in accounting standards and encouraged a positive outcome with regard to the finalisation of IAS 39 and other important conceptual accounting issues".

Of interest to accountants should be `Ongoing and Recent Work Relevant to Sound Financial Systems', the latest of which is a 44-page document with inputs on topics such as macroeconomic management, surveillance and transparency; market infrastructure; accounting, auditing and public disclosure; market functioning, conduct and transparency; prudential regulation and supervision; combating money laundering, terrorist financing and other market abuses; offshore financial centres; and e-finance.

World Economic Situation and Prospects 2005, a recent publication of Academic Foundation (www.academicfoundation.com) brought out on behalf the United Nations, devotes attention to the work of the FSF in a chapter titled `Financial flows to developing and transition economies'. The book is a concise source of the big picture for the first half of 2005.

Do you know, for instance, that the world community is looking at `innovative finance'?

Among the ideas being tossed about are not only global environment taxes, financial transactions taxes, and taxes on arms sales, but also "private donations for international development, affinity credit cards, a global lottery, global premium bonds, and emigrant remittances for development".

Three-point formula to manage time

THE top three, all-time-hit, sure-shot, 100 per cent guaranteed time-wasters are laziness, inaction and indecision, says Puneet Srivastava in Managing Time from Rupa & Co (info@rupabooks.com). Then he adds more: wishful thinking, procrastination, day-dreaming, fear of failure, and so forth. But you may be interested in knowing how to stop wasting time.

Here's a three-point formula: "What am I doing/ planning to do? What is the expected outcome of this activity? Would this outcome matter in five years time?"

If the answer to the third question is `no', don't take up the job, advises Srivastava. "If it is `yes', don't let anything stop you from pursuing it."

For harried professionals, the author's clue to finding balance in time is to get objective-oriented rather than remaining process-oriented. "Take decisions quickly, but never hastily. Don't keep pondering over an issue for too long. A timely decision, even if a wrong one, would provide a far better output than a wonderful decision, taken after the time is past."

A quick decision, I'd suggest is to spot Srivastava in the bookshop, for his other titles too, on managing confidence, creativity, communication, concentration and motivation.

Five threats to auditors' independence

GOING back in time, you'd learn that "auditing originated over 2,000 years ago when, first in Egypt, and subsequently in Greece, Rome and elsewhere, citizens (or, sometimes, slaves) entrusted with the collection and disbursement of public funds were required to present themselves publicly, before a responsible official (an auditor), to give an oral account of their handling of those funds," as Principles of External Auditing, by Brenda Porter, Jon Simon and David Hatherly, from Wiley (www.wiley.com) traces.

How I wish our elected representatives were required to present such accounts publicly on their use of taxpayer funds!

On the ever-contentious topic of `audit independence' the authors note how professional bodies around the world jealously guard against impairment of independence by publishing ethical guidelines.

For example, the UK's GPES, or Guide to Professional Ethics Statement, speaks of five broad threats to auditors' independence, as the book informs. These are: the self-interest threat resulting from financial or other self-interest conflict; the self-review threat, or the difficulty to maintain objectivity where "a product or judgment of a previous audit/ assignment needs to be challenged"; the advocacy threat, arising because auditors have to argue for or against their client's position "in any adversarial proceedings or situations"; the familiarity or trust threat, "arising from auditors becoming over-influenced by the personality and qualities of their clients' directors... and, consequently, too sympathetic to their interest"; and the intimidation threat.

I'm sure our ethics standards can identify more threats if only the accounting body closer home decided to move in this direction.

Essential read to recall old lessons.

BooksOfAccount@TheHindu.co.in

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