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BASDA launches cloud group

Rachael Singh — 2009-07-10T11:51:00.000Z

Rachael Singh, Accountancy Age, Friday 10 July 2009 at 11:51:00

BASDA to create a cloud computing handbook for end users and will host a summit later this year

The Business Application Software Developers Association has created a 'cloud' special interest group to address the growing interest in the online software model in the business software industry.

The cloud's discussion group will draw together ideas on a particular subject to create principles and raise its profile.

The group hopes to address the concerns of users in the accountancy and business industry and to help understand the potential benefits and limitations of online based applications.

BASDA hopes to create a platform to allow developers and end users to discuss 'cloud's' future and hopes to produce a cloud computing handbook at a later date.

Matt Holmes the MD of Liquid Accounts, the accountancy software providers, was voted chair of the group and David Turner, group marketing director for Coda, the financial IT company, was voted deputy chair.

Jairo Rojas, BASDA director general, said: 'We are delighted with the response from so many companies wanting to join forces with BASDA on this issue.'

'BASDA recognises the need to kick-start the industry debate on such an important new concept as Cloud Computing.'

BASDA is to hold a business cloud 9 summit in December in London.

Further reading:

Green code to measure eco impact

IT security risks increase with redundancies

Rachael Singh — 2009-07-10T10:38:00.000Z

Rachael Singh, Accountancy Age, Friday 10 July 2009 at 10:38:00

ICAEW's IT Faculty members believe the last 12 months have seen the risks of IT security increase

A poll by the ICAEW's IT Faculty found that around half of its members believed redundancies and cost reductions increased operational risk and impacted the effectiveness of day-to-day operations.

The survey questioned chief financial officers, finance directors and head of operational risk for a roundtable on risk for the Faculty. The results show respondents thought the recession increased external and internal IT security breaches, namely from disgruntled employees.

Two thirds of respondents found they faced greater operational risk now than this time last year and 39% believe internal security breaches, including employee theft of information, are a major concern.

Roland Brook, associate director Smith & Williamson, who attended the event said: 'Resilience has become much more of a major focus for our clients over the past year as many have had to contend with new threats such as internal sabotage from disgruntled employees and external security breaches which have dramatically increased in the recession.

Other findings include 70% of those polled found they are more at risk from damaging supply chain issues, such as business partners going out of business, compared to a year ago and a third said risk and resilience are now discussed at board level.

John Oates, chairman of the ICAEW IT Faculty, said: 'In the last 12 months we have seen operational risk rise up the business agenda as organisations identify new threats to their business, not least that caused by growing numbers of redundancies, both in terms of loss of knowledge and malicious attempts by departing employees to exact revenge on their employers.'

'More than ever, organisations need to create contingency plans that are water-tight and workable, but also flexible enough to cope with the new and unexpected threats thrown up by the current economy.' He added.

Further reading:

John Oates elected chairman of IT Faculty

IRS halts tax shelter penalties for SMEs

Judith Tydd — 2009-07-10T10:15:00.000Z

Judith Tydd, Accountancy Age, Friday 10 July 2009 at 10:15:00

US taxman temporarily suspends collecting penalties while it works on legislation

The US Internal Revenue Service has announced it will suspend imposing penalties on SMEs who invested in tax shelter transactions.

The move is designed to allow Congress time to work on legislation which would help businesses who face penalties out of proportion to any tax benefit received from tax shelters, according to tax-news.com

A lobby group wrote to the IRS Commissioner Doug Shulman requesting assistance while Congress moves to legislate on the matter.

“I’m pleased the IRS complied with our request so that Congress can do its part to ensure the tax code treats small businesses fairly,” said Max Baucus, chairman of the senate finance committee.

In response to the letter, Shulman said: 'I am concerned that because the current statute applies uniformly without exceptions and without regard to the amount of tax in question, some taxpayers are caught in a penalty regime that the legislation did not intend.'

More competition needed in banking sector: Darling

Accountancy Age — 2009-07-10T10:03:00.000Z

Accountancy Age, Accountancy Age, Friday 10 July 2009 at 10:03:00

Competition is `essential' ingredient for growth.

Chancellor Alistair Darling wants to see increased competition in the financial sector which he believes is a key ingredient for markets to recover from the global financial crisis.

Darling said he wanted to see the entrance of smaller non-bank players into the market describing this as an`essential' ingredient to maintain competition and promote growth, nebusiness.co.uk reported.

"We want to see greater competition and choice for consumers as well as a bigger role for mutuals…We need to promote a competitive market, with non-banking institutions," he said.

According to nebusiness Darling hinted that the sale of Northern Rock might be a means to achieve this aim.

He said the government would dispose of Northern Rock, "as soon as appropriate in a manner that will promote competition for retail services".

Read the full story: Northern Rock speculation amid building society calls

Citi CFO moves after just three months

Kevin Reed — 2009-07-10T09:54:00.000Z

Kevin Reed, Accountancy Age, Friday 10 July 2009 at 09:54:00

Citigroup CFO moves on to vice chairman role

Citigroup has gone through another round of management changes, with its CFO moving across to vice chairman after just three months.

CFO Ned Kelly will take on broader responsibilities for strategy and M&A and will serve as vice-chairman. Kelly moved to the CFO role in March.

Controller and chief accounting officer John Gerspach moves to the CFO role.

Eugene M McQuade joins Citi as CEO of Citibank. He served as vice chairman of Merrill Lynch and president of Merrill Lynch Banks. He has also served as president and COO of Freddie Mac, and president of Bank of America Corporation.

'Our relentless focus on executing against our strategic priorities at Citi continues as we remain focused on rationalizing Citi Holdings, and on Citicorp as our core operating business,' said Vikram Pandit, Cititgroup CEO.

Further reading:

Visit the Citi website

FSA overhauls its internal structure

Rachael Singh — 2009-07-09T10:17:00.000Z

Rachael Singh, Accountancy Age, Thursday 9 July 2009 at 10:17:00

Internal reorganisation of FSA sees the body ready itself for international responsibility

The Financial Services Authority is to overhaul its internal organisation later this year to take into account the growing responsibility of the body - including international regulatory engagement and consumer financial education.

Jon Pain, managing director of the FSA, will head up retail and wholesale supervision; Sally Dewar, the former MD of wholesale, will assume responsibility for risk management and identification while Margaret Cole, currently head of enforcement will manage the merged financial crime and enforcement office The Financial Times reported.

Hector Sants, chief executive FSA, said: 'The actions we have taken since the crisis began have shown the effectiveness of this model. This reorganisation will ensure our changing working practices and the way we make our judgements are successfully institutionalised.'

Further reading:

FSA triples fines to stamp out insider trading

IASB releases accounting standard for SMEs

Mario Christodoulou — 2009-07-09T09:10:00.000Z

Mario Christodoulou, Accountancy Age, Thursday 9 July 2009 at 09:10:00

Standards could affect 95% of world's businesses

The long awaited accounting standards for small and medium sized businesses (SMEs) have been released with the potential to change the way 95% of companies across the globe conduct business.

The five-year project by the International Accounting Standard Board (IASB) aims to create a common accounting language for the world's SMEs.

In the standards the IASB has tried to address concerns the rules would be overly complex, describing the 230-page document as a self contained standard which 'is tailored for the needs and capabilities of smaller businesses'.

'Many of the principles in full [reporting standards for large companies] for recognising and measuring assets, liabilities, income and expenses have been simplified, topics not relevant to SMEs have been omitted, and the number of required disclosures has been significantly reduced,' the IASB said in a statement.

It is now up to individual countries to decide whethern they will adopt the standards.

Demand for the document has come predominately from emerging and developing economies in need of high quality accounting rules, but without the expertise or resources to produce them.

The US is also said to be keen on adopting the standards, however, Europe has so far expressed reluctance, citing mixed and negative reactions to a draft in 2007.

The standard was the result of extensive consultation since 2004. They have been field-tested by 100 small companies in 20 countries, which according to the IASB, resulted in a number of 'simplifications'.

IASB Chairman Sir David Tweedie described today's publication as a, 'major breakthrough' for companies across the world'.

'For the first time, SMEs will have a common high quality and internationally respected set of accounting requirements. We believe the benefits will be felt in both developed and emerging economies,' he said.

Amnesty dates revealed for overseas account holders

Judith Tydd — 2009-07-09T08:26:00.000Z

Judith Tydd, Accountancy Age, Thursday 9 July 2009 at 08:26:00

Amnesty to launch 1 September

Final details have been confirmed for the second amnesty in which the taxman will try to persuade people with offshore bank accounts to declare income earned as interest.

Dave Hartnett, permanent secretary for tax at HMRC, confirmed a national campaign, including newspaper advertising, will run to promote the new amnesty - or new disclosure order(NDO). The NDO has been allocated a budget and though he would not confirm the sum involved, he said: 'It isn't colossal.'

The amnesty will begin on 1 September, with taxpayers able to submit paper disclosures. Those making online disclosures will have to wait until 1 October to submit their notice of unpaid tax.

Those making online disclosures will have until 12 March, and taxpayers would have until 31 January to come forward if volunteering information on paper, clashing with the annual self-assessment deadline.

Tax experts who spoke to Accountancy Age expressed concern over the timings. One said it will 'put real pressure on small accountants already dealing with the nightmare of the influx of self-assessment'.

Hartnett said he is pushing for taxpayers to make disclosures online. 'It takes a while to build up but we'd like to think there will be more disclosures online this time,' he said.

Internal auditors in fraud fear

Mario Christodoulou — 2009-07-09T08:16:00.000Z

Mario Christodoulou, Accountancy Age, Thursday 9 July 2009 at 08:16:00

More pressure to distort earnings in current economic climate

Nine out of ten internal auditors believe there is more pressure to distort earnings figures since the onset of the recession, an industry survey has found.

A KPMG study of more than 1,000 audit committee members from 25 countries found widespread concern for fraud, especially the manipulation of earnings data, since the recession took hold.

The distortion of earnings data can create a biased view of a company's financial position. Management can manipulate the timing of announcements or other basic reporting conditions behind closed doors in order to speed up or delay the release of earnings information.

The report found 86% of committee members said the risk of inappropriate earnings management and other misconduct had grown due to the recession.

Committee members felt powerless to challenge the practice.

Temptation to manipulate the earnings information can be particularly strong when times are tough, according to KPMG partner Tim Copnell. 'I wouldn't be able to point you to any statistics that prove it, but I think most people would accept the fact that this happens when organisations are stretched,' he said.

'I certainly think that good whistle blowing procedures would catch a lot of accounting fraud.'

Morale among HMRC workers falls to new low

Richard Brooks — 2009-07-09T07:48:00.000Z

Richard Brooks, Accountancy Age, Thursday 9 July 2009 at 07:48:00

Just one in ten HMRC staff believe the department is well managed

Morale at HM Revenue and Customs has plumbed new depths, a recent staff survey seen by Accountancy Age reveals.

Announcing results that HMRC chief executive Lesley Strathie described as 'hugely disappointing', the department admitted that 'of 11 government departments that took part in this pilot survey, HMRC was ranked last overall'.

The results, from this May, are particularly alarming because they represent the views of 53,000 employees, over half the workforce. Among the damning findings, in the largest ever such survey, are that only one quarter of people are proud to work for HMRC and that just 14% describe themselves as 'highly motivated'.

The grim picture from inside HMRC shows a deterioration from two years ago, when the department was already thought to be at crisis point. Then 19% said that 'senior management provide effective leadership', but now the proportion believing HMRC to be well managed has fallen further to 11%.

Among the few positive findings for HMRC to build on was that 57% of staff found their work interesting and 73% thought their teams strived to serve customers better.

Lesley Strathie admitted of the latest figures: 'As a department we cannot afford to ignore these results and my senior management team and I take them extremely seriously'.

Causes of staff dissatisfaction are likely to include 17,000 job cuts made in the last four years, the closure of 90 offices announced late last year and changes in working practices including controversial 'lean' techniques in call centres and processing centres.

ENDS