The most recent News from Incisive Media

Analysis: FRC's Haddrill at the Treasury select commmittee

Kevin Reed — 2010-02-10T08:24:00.000Z

Kevin Reed, Accountancy Age, Wednesday 10 February 2010 at 08:24:00

New FRC chief tells Treasury committee that current system for differentiating between audit and non-audit creates "absurdities"

The Financial Reporting Council’s new chief executive made his debut before the Treasury Select committee yesterday and received a grilling on the issues that are likely to dominate the FRC’s agenda in the coming year.

Committee members, looking into the role of audit and accounting in the banking crisis, expressed concern that audit firms were beginning to ‘move back into consultancy’.

Challenged by committee member Jim Cousins MP, Stephen Haddrill was pressed to explain why some Big Four firms were affirming in public their desire to grow their non-audit fees.

Cousins claimed Ernst and Young had said it wanted to treble its consultancy fees to £600m. Haddrill told Cousins that he assumed the firms would be seeking to grow their non-audit fees in general, but would not be doing that with their audit clients.

Cousins was persistent in his questioning of how the audit industry is regulated. His biggest concern was the inflated fees and lack of transparency over the work the Big Four undertook for their blue chip clients. Surely there must be a way, he said, to force audit firms to publish the amounts they receive for audit and non-audit work?

Haddrill, in a measured performance, conceded the current system of differentiating between audit and non-audit did throw up "absurdities" – work on interim accounts, for instance, is classed as non-audit – and said he would be working with a range of bodies to clarify this.

He also said his organisation would be monitoring the ratios of audit to non-audit fees.

Ian Patterson-Brown, convener of the ICAS Ethics Committee defended the increases, claiming that consultancy fees always rise during recession as businesses seek to cut costs and rationalise operations – for which they require advice.

In response to criticism from several MPs on the size of the fees received by the Big Four from banks in particular, Haddrill said that while it wasn’t his job to defend audit firms, he did believe substantial fees were justified if they were re-invested in training and staff development, in turn improving audit quality. The FRC is expected to report on its findings on the audit market in the next two months.

Following on from a similar hearing last year, this session covered a wide range of topics including the issues of transparency and the lack of competition in the market. Summing up, committee chairman John McFall asked the witnesses what they thought had changed since the advent of the financial crisis in 2008.

Haddrill said he believed that boards were now focusing more on the issue of risk management, and that international audit regulators were liaising on a more regular basis in order to tackle the issues that the financial crisis and its fallout has created.

Dr Steve Priddy, technical director of the ACCA and a last minute replacement for the absent chief executive Helen Brand, said he was seeing a strengthening of the role of audit committees in the wake of the Walker report on banking corporate governance. Robert Hodgkinson, executive director, technical of the ICAEW, meanwhile, defended the profession from criticism, claiming that the banking crisis wasn’t a failure of auditors, but did concede that lessons had to be learned about the impact of accounting decisions on the real economy.

HMRC in talks over plight of Portsmouth FC

Accountancy Age — 2010-02-10T07:46:00.000Z

Accountancy Age, Accountancy Age, Wednesday 10 February 2010 at 07:46:00

Premiership side faces court hearings today

Officials from Portsmouth are reported to have been involved in last minutes talks with the taxman to avoid a winding-up order due to hit the courts today.

According to the Independent the club will today contest the sum owed to HM Revenue & Customs, said to be £7.5m. Hearings have already been postponed once.

Commentators suggest the likely outcome is for the club to go into administration, though it remains unknown which firm would receive the appointment.

Portsmouth would become the first Premiership side to go into administration and, under Football Association rules, would be docked nine points.

The FA is described in some reports as sanguine over Portsmoth's plight having already concluded some time ago that the club's finances were unstable.

Clear as Crystal: Crystal Palace's administrator profile

Crystal Palace enter administration

UK seeks tax cooperation from developing world

Accountancy Age — 2010-02-10T07:19:00.000Z

Accountancy Age, Accountancy Age, Wednesday 10 February 2010 at 07:19:00

Pressures mounts again on tax avoidance

The UK has asked developing countries to help crackdown on tax avoidance by swapping more information.

The request comes ahead of a conference on financial crime today, Reuters reports, and came from Treasury minister Stephen Timms.

Timms has written to 16 countries with the proposal among them Jamaica, Cameroon, South Africa and Vietnam.

The UK has become increasingly aggressive on tax avoidance but the G20 meetings in the wake of the financial crisis brought a renewed focus on the issue as part of measures to stabilise financial systems.

Timms is expecting replies by the end of March.

Treasury drops gift aid proposals

Developer charged with cookie scam on eBay

Iain Thomson in San Francisco — 2010-02-10T03:10:00.000Z

Iain Thomson in San Francisco, V3.co.uk, Wednesday 10 February 2010 at 03:10:00

Auction site may have lost tens of thousands

A Las Vegas software developer has been charged over a software cookie scam that left eBay severely out of pocket.

Christopher Kennedy built a software program called Saucekit, which could be used to make it look as though internet users had been clicking on advertisements for eBay, according to the court filings.

EBay pays a fixed fee to affiliate sites that direct internet users to the auction site, and uses the information in the cookies to identify the payee for the advertising click-throughs.

Kennedy boasted on message boards that one of his clients was clearing $10,000 (£6,380) a month using the software, and another was making $7,000 (£4,460) a month.

EBay sent him a cease and desist notice in March but Kennedy ignored this and insulted the company and its request in message board postings. EBay also filed a civil suit before involving the police.

Kennedy is facing one count of conspiracy to commit wire fraud, which carries a prison sentence of up to five years and a fine of $250,000 (£160,000).

Microsoft issues patches for 26 flaws

Shaun Nichols in San Francisco — 2010-02-10T02:53:00.000Z

Shaun Nichols in San Francisco, V3.co.uk, Wednesday 10 February 2010 at 02:53:00

February update includes five critical fixes

Microsoft has posted the February edition of its monthly security updates.

The latest release includes 13 bulletins which address a total of 26 vulnerabilities. Five of the vulnerabilities address flaws which, if exploited, could allow an attacker to remotely execute code on a targeted system.

The five critical fixes include patches for flaws in the Windows SMB client as well as the Windows Shell and TCP/IP components. Other critical fixes include an ActiveX killbit update and a fix for a flaw in the DirectShow component.

Though the severity of each bulletin varies by Windows version, the update includes one or mote critical fix for Windows XP, Server 2003, Vista, Server 2008 and Windows 7.

Also included in the February update are seven bulletins rated "important." Those bulletins include fixes for flaws in both Windows and Office which, if exploited, could cause elevation of privilege, denial of service and remote code execution attacks.

The thirteenth bulletin addresses a remote code execution flaw in Microsoft Paint for Windows XP and Server 2003. That bulletin has been rated as "moderate " in severity.

US ecommerce saw first ever spending drop in 2009

Iain Thomson in San Francisco — 2010-02-10T02:50:00.000Z

Iain Thomson in San Francisco, V3.co.uk, Wednesday 10 February 2010 at 02:50:00

Down two per cent on 2008 rates

Ecommerce spending dropped two per cent in 2009, the first fall since records began according to internet monitoring firm comScore.

Total 2009 spending in the US was $209.6bn, with online travel sites taking the biggest hit with a five per cent fall. Non-travel ecommerce spending stayed largely flat over the year.

“The U.S. e-commerce market in 2009 exhibited substantial softness in the face of the global economic recession, which exerted downward pressure on consumer discretionary spending reflected in the e-commerce market,” the report ‘The 2009 US Digital Year in Review’ states.

“Throughout most of the decade, retail e-commerce spending saw growth rates in excess of 20 per cent annually, but 2008 showed signs of softness as the economy first began to weaken. While that year still saw retail e-commerce grow at a rate of 6 percent, it was the first time on record of single-digit growth rates.”

The best days of the year were unsurprisingly in the run-up to Christmas, with nine out the ten biggest spending days coming in December. Top of the list was December 15th, when $913m changed hands online.

Some areas did perform well over the year. Online sales of books and magazines grew 12 per cent, with computer games sales also rising seven per cent and consumer electronics sales up three per cent.

In its analysis of search data comScore said search volumes had grow 16 per cent on the year, with Microsoft’s searches rising 49 per cent. The biggest loser was AOL, which saw search volumes fell 20 per cent.

Social networking however had a very good year, with nearly four out of five US internet users visiting a social networking site in December 2009. Facebook took the top spot, with user growth of 105 per cent while Twitter saw its suer base jump from two million to 20m users.

Nvidia pitches Optimus as prime notebook platform

Shaun Nichols in San Francisco — 2010-02-10T01:56:00.000Z

Shaun Nichols in San Francisco, V3.co.uk, Wednesday 10 February 2010 at 01:56:00

New system pairs on-board with discrete chips

Nvidia on Tuesday launched a new notebook platform which pairs discrete and on-board processors.

The company said that the new Optimus platform will alternate between an Nvidia GPU chip and a lower-power Intel graphics chip. The system will designate the Nvidia GPU for high performance GPU operations such as 3D rendering, while the Intel chip will be used for less demanding processing tasks.

By offering a platform which switches between the two types of chips, the company hopes to offer users a notebook which can deliver high-end graphics performance while still offering solid battery life.

"Consumers no longer have to choose whether they want great graphics performance or sustained battery life," said Nvidia general manager for notebook products Rene Haas.

"Nvidia Optimus gives them both, great performance, great battery life and it simply works."

The company said that Asus would be the first notebook vendor to use the platform, and that the systems would "be available shortly," though no specific date was given.

OpenDNSSEC service goes live

Shaun Nichols in San Francisco — 2010-02-09T22:25:00.000Z

Shaun Nichols in San Francisco, V3.co.uk, Tuesday 9 February 2010 at 22:25:00

Security service encrypts site queries

A collection of security and infrastructure management groups have launched a new project to help secure DNS queries.

Dubbed OpenDNSSEC, the new project will provide a way for service providers and hosting vendors to encrypt DNS traffic.

A fundamental part of everyday internet use, DNS (or Domain Name System) servers allow the text URL addresses to be linked with the machine address of a site's host server.

Though largely unnoticed in the past, security researchers have been paying increased attention to the DNS service and its fundamental weaknesses. Many worry that by compromising DNS servers, attackers will be able to redirect traffic without user knowledge.

The new service will allow hosts and service providers to securely transmit DNS requests and prevent attackers from intercepting and redirecting information.

"OpenDNSSEC ensures that the domain name system is not tampered with, and that Internet users are directed to a preferred web site without intervention," said Lesley Cowley, chief executive of development group member Nominet.

"The collaboration in evidence, shows that the internet community is committed to forging a safer, more trusted internet for all."

Google moves into social networking with Buzz

Iain Thomson in San Francisco — 2010-02-09T21:08:00.000Z

Iain Thomson in San Francisco, V3.co.uk, Tuesday 9 February 2010 at 21:08:00

Facebook gets opposition in consumer and enterprice spheres

As expected, Google today announced a move into the social networking sphere with a new platform for Gmail users called Google Buzz.

Buzz uses Gmail contacts to build a social network and which interacts with YouTube, Flickr, Picassa, Blogger and Twitter to share media. A mobile version of Buzz also interacts with GPS to allow geotagging information to be shares, and users can see if anyone on Buzz has made a comment about a place or business nearby.

The company said that an enterprise version would be pout very shortly and Google was already using a version internally, which co-founder Sergey Brin said was very compelling and a real boost to productivity.

“Social services on the internet have evolutions,” he said.

“This is another very compelling evolution, a meeting of social networking and productivity. Past services have focussed on friends and entertainment but we’re seen a huge amount of productivity from using Google internally.”

Social networking was a great platform but the amount of information users needed to process to heavy and some was getting lost as networks get too large said Tod Jackson, product manager for Buzz.

“Organising social information on the web is a Google-sized problem, a problem of the type Google likes to solve,” he said.

Google will apply its search technology to the data generated by social networks and will filter and refine it Jackson said. It will also recommend material and use the user’s acceptance or rejection of posts to refine what data they get in the future.

Users can also set up more private custom groups to suit different needs, and post to one or all. All posts will be recorded on a user proifile hosted by Google.

On the mobile side Buzz has been integrated with Google’s existing location applications and the interface with GPS phones allows users to show where they are online and post up comments directly from other users locally.

“Maybe you’re at a concert and want to know other attendees feelings, going out for dinner and want feedback on a restaurant, you can find out which has the most interesting buzz by be able to see what people around you are saying,” said Vic Gundotra, vice president of engineering at Google.

Google stressed that Buzz as it stands is very much a work in progress and there will be numerous upgrades and revisions based on user feedback. In particular Google Voice and Wave platforms could be added.

Invitations to join Buzz will be rolled out to all Gmail users over the next few days.

More analysis of the press conference can be found here.

Global IT industry to return to growth this year

Tom Young — 2010-02-09T18:42:00.000Z

Tom Young, Computing, Tuesday 9 February 2010 at 18:42:00

Public sector and utility sector showing strongest recovery

The global IT industry is likely to come out of recession in 2010 with public sector and utility spending being the recovery's chief driver, according to a report from Pierre Audoin Consultants.

The public sector and utilities are both expected to show a spending rise of over 3 per cent in the period, with spending in the banking, insurance and transport sectors all expected to rise by 1 per cent.

Non-public sectors showed a decline of at least 2 per cent last year, with the retail and manufacturing sectors both showing drops in spending on IT of over 5 per cent.

However public sector spending is now likely to drop as countries ease back on stimulus spending, according to Arnold Aumasson, Senior Consultant at PAC Paris.

"The public sector has been very resilient in most countries in 2009 as federal investment programs have supported demand; however municipalities and regional governments face decreasing tax income and most countries’ debts will be a heavy burden for the years to come," he said.

Utilities are benefiting from some industry specific issues such as liberalisation, unbundling, information management, smart grid and smart metering projects, according to the report.

Meanwhile the situation in banking will remain highly differentiated from country-to-country, depending on the level of government aid and the structure of the industry.

Retail will remain a very difficult market in most countries, especially those dominated by discount retailers, which spend less on IT.

Overall, the recovery is expected in the second half of 2010. But the PAC report says average prices and rates will be lower than in 2009 even if spending volumes do recover.

Mobile operators to boost 3G mobile services

Dave Bailey — 2010-02-09T18:06:00.000Z

Dave Bailey, Computing, Tuesday 9 February 2010 at 18:06:00

Ofcom consults on a mobile operator 3G base station transmission power increase

Ofcom has launched a consultation aimed at letting all the mobile operators vary their 3G licences to bump up their base station transmission power.

Such a move would reduce the number of 'dead zones' – areas of no signal – and give better mobile data downloads and phone calls.

An Ofcom spokesman said: “the consumer benefit of this change may be improved mobile phone coverage, potentially increasing the availability of services in the UK.”

The consultation, called "Application for a variation to 3G licences", was launched in response to a request from mobile operator Vodafone. The operator said it would: “vary its Wireless Telegraphy Third Generation Mobile Licence (3G) to increase the permitted power limits.”

In the consultation document posted on its site, Ofcom said that the request had been discussed with other 3G licensed operators and that all have indicated that they would support the proposal and would like to benefit from the same condition being applied across the licence class.”

Ofcom’s spokesman added that further mobile broadband performance improvements could be realised since base station technology had improved meaning there was “new equipment on the market capable of using increased powers more effectively.”

However, any moves to increase transmission power from mobile operator’s base stations could lead to complaints from residents living near to such stations.

However, the consultation claims that the size of power increase being proposed is unlikely to significantly affect its position in relation to the International Committee for Non-Ionising Radiation Protection (ICNIRP).”

ICNIRP set maximum permitted emission levels from mobile base station infrastructure.

Ofcom, "invites written views and comments on the issues raised in this document, to be made by 5pm on Friday 19 March 2010."

Juniper touts new tools to ease network pressure

Dan Worth — 2010-02-09T17:41:00.000Z

Dan Worth, V3.co.uk, Tuesday 9 February 2010 at 17:41:00

Company claims products will help service providers free up bandwidth

Juniper Networks has announced a series of network tools designed to help service providers better manage the rising tide of mobile data.

The first product, Traffic Data, will help providers free up space on networks by moving mobile data traffic across to the fixed internet, without having to wait for Long Term Evolution (LTE) technology, the firm said.

"We think it's important that networks evolve to handle LTE in the long term, but in the short term service providers need to ease the pressure on their networks and Traffic Data is designed to monitor and then offload data to the relevant channel," said Gijs van Kersen, head of mobile and convergence marketing at Juniper.

Van Kersen claimed that the company's research had shown that almost 70 per cent of bandwidth could be freed up by pushing 2G and 3G traffic to the landline infrastructure via Traffic Data.

The second tool, Juniper Media Flow, is the first result of the firm's partnership with Ankeena Networks. The product will provide a content delivery network for different types of data, including voice, SMS and video.

"Our partnership with Ankeena allows us to provide wireless carriers with dedicated networks able to cope with the increasing rise of videos being watched and downloaded on the networks," said van Kersen.

The final product is an evolved packet core platform called Mobile Core Evolution, which will allow providers to gradually prepare networks for LTE. The system forms part of Juniper's Project Falcon to develop routers able to meet the needs of evolved packet core and future cellular networks.

The announcements form part of the company's attempt to keep pace with Cisco, which recently acquired wireless technology company Starent Networks to address the market for mobile services.

Juniper will officially launch the products at Mobile World Congress in Barcelona next week. Media Flow and Traffic Data will be available in the second quarter, and Mobile Core Evolution in late 2010. No pricing details were released.

130,000 laptops ordered through Home Access Scheme

Nicola Brittain — 2010-02-09T17:26:00.000Z

Nicola Brittain, Computing, Tuesday 9 February 2010 at 17:26:00

Parents given Barclaycard enabling one off transaction worth £528

More than 130,000 families have applied for free laptops and broadband internet access for their kids within weeks of the launch of the government scheme designed to help close the digital divide.

So far 132,000 application forms have been received, 15,000 returned and 5,000 approved under the £300m Home Access Programme launched by Prime Minister Gordon Brown and Schools Secretary Ed Balls a month ago.

Balls said there had been "a fantastic response by families to the ground-breaking offer we've made".

He said that computers are as essential as books, pens and paper to help children learn.

Under the scheme each qualifying family gets a Barclaycard which can be used for a one-off transaction worth £528 to buy the equipment at an approved supplier.

Some 270,000 lap tops are expected to be handed out on a first-come-first-served basis.

Qualifying families are those with children in school years 3 to 9 who are eligible for free school meals and meet other criteria. Children under 18 in the care of local authorities also qualify.

Proponents claim having a computer at home can improve GCSE results by two grades.

Government petitioned to abandon centralised IT projects

Computing Staff — 2010-02-09T16:41:00.000Z

Computing Staff, Computing, Tuesday 9 February 2010 at 16:41:00

Petition says government should adopt incremental private sector approach

An e-petition on the 10 Downing Street web site calling on the government to abandon centralised IT projects has received 199 signatures.

The petition, which has been in place for a week, says the failure of such projects is mainly the result of the nature in which they are procured and delivered, with commitments to all the requirements of a project made in advance of the work.

"The private sector has mostly moved away from this failed model to an incremental approach, which allows for changes in understanding and requirements and enormously reduces the chances of failure," says the petition.

"It's about time our government did too."

The government is coming under increasing pressure to cut the £12.7bn National Programme for IT (NPfIT) and the £5.4bn National Identity Scheme to reduce the deficit.

Chancellor Alistair Darling has already signalled cuts to the NPfIT and the signing of some contracts for the ID cards programme has been delayed until after the election.

The petition concludes: "We ask the prime minister to demand a review of current practices and look at adopting a more incremental and agile approach to government IT projects."

Schengen system raises privacy concerns

Nicola Brittain — 2010-02-09T16:34:00.000Z

Nicola Brittain, Computing, Tuesday 9 February 2010 at 16:34:00

System contains personal data of EU citizens and can be accessed via 500,000 terminals

It is believed that confidential information on British citizens could be accessed via 500,000 terminals all hooked up to an EU-wide computer network called the Schengen Information System (SIS).

It is the vast number of terminals through which the system can be accessed that has triggered concerns about security of personal data.

The network has seen a growth in terminals as a result of the expansion of the EU, from 125,000 in 2003 to 500,000 currently.

Concerns were highlighted by a report in The Observer that cites the Council of the European Union Inter-institutional File as saying: “The SIS is built around a central database that is networked, via national systems, to more than half a million terminals located within the security services of the member states."

There are concerns that the personal data contained by SIS is now accessible via too many ports and that it could be a target for fraudsters.