WeiserMazars, Mazars independent US member firm, has merged with health care consulting firm pmpm Consulting Group.

pmpm Consulting Group is based in Sacramento and provides advisory services in health care management through two partners and six staff.

"As the health care sector undergoes a complete structural transformation, we are taking action to deliver effective service to clients," WeiserMazars chief executive officer Douglas Phillips said.

"Our health care practice is an essential component of the future vision of the firm and we plan to continue expanding it."

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The UK Competition and Markets Authority's (CMA) draft order for audit market remedies lacks clarification of the competitive tendering requirements, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

ICAEW head of integrity & markets Tony Bromell said that the draft lacked clarity and logic for both businesses and audit firms.

"The CMA's more detailed explanatory notes to help clarify the competitive tendering requirements and in particular audit committee responsibilities are still too complex," he said. "Further clarification will be needed to help companies understand when they need to take action."

Bromell said a specific area the ICAEW hoped CMA would reconsider was when a UK company has to put ist audit contract out for tender.

"The CMA's guidance on the transitional arrangements suggests that companies that have changed auditors in the last 11 years will have to tender their audit contracts earlier than those who have not changed auditors that recently," Bromell said.

This is the result of the EU leaving some room for different interpretations, he explained. "But this interpretation is not logical and is the subject of much debate within Europe."

ICAEW comments came as a response to CMA's public consultation launched in July 2014 on the draft order The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of competitive Tender Processes and Audit Committee Responsibilities) Order 2014.

The draft order once finalised will put into force some of the changes proposed by the Competition Commission's investigation into the UK statutory audit market. These include10 year mandatory audit retendering for the FTSE350 companies.

The consultation will run until the end of until August 2014. CMA expects the order to apply for financial years beginning on or after 1 January 2015.

Related articles

UK competition authority launches consultation on draft order for audit market remedies
Mandatory retendering every 10 years hits UK FTSE350

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ICAEW
CMA

By Steffen Müller

The US companies' disclosures of cyber risks rarely provide differentiated or actionable information, PwC US warned in a joint report issued in collaboration with the Investor Responsibility Research Center Institute (IRRCi).

The report, What investors need to know about cybersecurity: How to evaluate the investment, encourages investors to demand better and more actionable disclosure on the companies' cybersecurity policy across all industry sectors.

"The reality today is that virtually every company is reliant on information and technology, so not one company or sector is left out," IRRCi executive director Jon Lukomnik said.

According to the report, the topic of cybersecurity "has moved from the back office to the corporate board room," since poor cybersecurity can lead, amongst others, to lost revenue, compromised intellectual property or increases in costs.

However, the steps the boards take to address potential cyber risks tend to be hesitant and often lack disclosure and transparency for investors struggling to evaluate investment risk, the report read.

"Even when boards do act, investors often feel in the dark on cybersecurity," Lukomnik said and continued: "First, it's dynamic and highly technical. Second, companies can be reluctant to disclose details on threats because they are concerned about providing hackers with a roadmap to vulnerabilities."

PwC investor resource institute leader Kayla Gillan said that the investors should "begin to navigate critical cybersecurity issues, with a focus on sector-specific portfolio risk." The report suggests therefore that investors should question if there is a strong expertise in cybersecurity on the senior level of the company and if the company has response plans for cyber incidents.

According to the joint report, cyber-attacks affecting industry sectors happen for different reasons. While the financial services and the retail sectors become victim mostly out of financial gain and greed, attacks on the energy, the aerospace & defence and the government sector are often political motivated.

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PwC US

Report: What investors need to know about cybersecurity: How to evaluate the investment?

International association MSI Global Alliance has appointed Timothy Wilson as its chief executive officer.

Wilson hails from the position of membership director at Abbeyfield Society, a later-life housing charity, where he helped support over 200 independent care homes.

Before joining Abbeyfield, Wilson served in the armed forces for 28 years, including tours in Bosnia, Cyprus and Northern Ireland and heading a 1,000-soldier task force in Iraq.

Having completed a selection process described by the company as "rigorous", Wilson will be based in MSI's London offices.

James Mendelssohn, chairman and outgoing acting chief executive officer of MSI, said he was "delighted" by Wilson's appointment.

"His previous experience and knowledge of working in an international organisation will make him an excellent asset to MSI, and we are looking forward to Tim having a long and successful career with us as our new chief executive," he added.

Wilson himself also professed himself "delighted" at the opportunity, and said of MSI: "It is an association with a great reputation and I am very much looking forward to working with MSI's legal and accounting firms around the world and meeting the new challenges."

In 2012 MSI Global Alliance appointed Donal Watkin, formerly deputy executive director of Nexia International, as chief executive, but he left the post in 2013.

Related articles

MSI Global Alliance admits five members

MSI adds Irish firm

KPMG US has acquired the Workday Consulting Practice from AXIA Consulting, a technology and business consulting provider.

According to KPMG, the move will strengthen its business transformation support capabilities through its alliance with Workday, an enterprise cloud application provider for both finance and human capital management.

Stephen Chase, service line leader for technology at KPMG, praised the "deep and focused IT experience" of the joining Weekday team, abilities he said would "significantly" advance KPMG's ability to provide technology enablement and enterprise transformation support to its customers.

"In turn, AXIA's Workday professionals now have access to the extended capabilities that KPMG provides to the Software-as-a-Service (SaaS) Enterprise Resource Planning marketplace," he added.

Ed Mueller, founder and chief executive officer of AXIA, said the acquisition would allow AXIA to refocus all resources on its advisory and consulting businesses and added: "KPMG is currently one of only a handful of Workday Partners that is building capabilities for full Workday Platform delivery, and the culture and vision of KPMG's Enterprise Solutions team provided an excellent fit for our team."

Global association BKR International has added Xinjiang Fangxia CPAs, a Chinese professional services firm based in Urumqi, as a member.

Offering audit, tax and other professional services, Xinjiang Fangxia CPAs was founded in 2004 and counts six partners and 39 members of staff.

The firm specialises in university, government investment, manufacturing, retail, real estate, shipping and transport and is ranked among the top ten in the Autonomous Region of Xinjiang Uygur.

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BKR International

Confidence among businesses dropped for the first time in two years, according to the latest Institute of Charted Accountants for England and Wales (ICAEW) and Grant Thornton UK Business Confidence Monitor (BCM).

The BCM's confidence index fell from 37.3 in the first three months of 2014 to 32.2 this quarter.

Despite UK growth expectations for the third quarter of 2014 remaining positive at 0.9%, the report also predicted a slowdown in the last quarter of the year, as turnover and profit growth projections level off.

Business investment is also expected to dwindle, according to the findings.

Stephen Ibbotson, director of business at ICAEW, described the fall in confidence as a sign "businesses are becoming more realistic about the future."

The imbalances in our economic recovery that were masked by rising confidence continue to persist - our exports remain weak, and investment isn't maintaining momentum," he explained.

"We look to the Bank of England and the government to work harder to ensure that the recovery is placed on a broader footing before we see this still relatively high optimism erode away."

As growth in the UK economy continues to outstrip that of its key export markets, domestic sales remain the primary driver.

According to the report, the consequent focus on domestic demand has led UK businesses to increase staff levels.

With employee numbers expected to increase 2.5% next year and salary growth remaining modest, an increasing number of businesses are facing a shortage of skills, particularly in the construction, utilities and IT sectors, according to the report.

However, remuneration is expected to rise above inflation over the next 12 months.

Scott Barnes, chief executive officer of Grant Thornton UK, warned that despite enduring positive confidence levels: "Business is however anticipating a slight slowdown in investment, and sourcing the relevant skills has become a greater challenge for some, particularly in construction."

He added: "As the labour market continues to improve, and staff turnover increases, it is important that we ensure that those entering the workforce are adequately equipped with the skills needed to take the economy forward."

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Grant Thornton UK

PrimeGlobal has appointed Peter Davies as chairman to its global board of directors. The association also appointed three new board members, Richard Fisher, Richard Linder and Mark Worsey.

Davies works as managing partner at UK accounting firm CK. Prior to his appointment, he was serving as the association's Europe, Middle East and Africa (EMEA) chairman since 2012.

Newly appointed board members Fisher and Linder both also serve in PrimeGlobal's North American board. Fisher is principal at Berntson Porter & Co and Linder is partner at SingerLewak, both PrimeGlobal member firms in the US.

Mark Worsey is partner at Buzzacott, a UK member firm based in London. In addition to his new role on the PrimeGlobal board, Worsey serves as a member of PrimeGlobal's EMEA board.

"PrimeGlobal is grateful for the service of these insightful individuals as our association continues to grow around the world," said PrimeGlobal president and chief executive officer Kevin Mead.

"We are pleased to be able to rely upon their vision and strategic perspectives as our association develops new and comprehensive programs and services to meet the needs of our members, their clients, and the global accounting community."

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The UK Financial Reporting Council has extended the scope of its investigation of Computer 2000 Distribution (C2000), a distributor of IT, communication and electronics products, to look at EY's conduct in the audits of the company between 31 January 2009 and 31 January 2013.

The UK FRC launched its investigation in May of this year into the preparation and approval of the financial information of C2000 (now rebranded Tech Data) relating to the years ended 31 January 2009 to 31 January 2013.

The UK FRC has now announced it will broaden its investigation to look at the audits for those years as well as the conduct of the auditor, EY.

Contacted by IAB, EY said it does not comment on ongoing investigations.

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FRC

Praxity has added Brazilian firm Bexcell Auditores Independentes (BAI) to its association.

Founded in 2010, BAI counts eight partners and 210 staff. It provides audit, tax, advisory and outsourcing services, specializing in sectors such as real estate, investment funds, industries and not-for-profit.

The firm is headquartered in Sao Paulo and has offices in Alphaville plus satellite businesses in Rio de Janeiro and Manaus.

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Praxity

BDO UK has acquired the British team of US-based business strategy company MorganFranklin Consulting.

The eight-person team, led by former managing director Hans Christian Iverson, will become a part of BDO consulting's financial management and technology branch.

?"The transfer of the UK team recognises that there is a strong relationship and potential for ongoing partnership opportunities between BDO and MorganFranklin," BDO UK said in a statement.

MorganFranklin chief executive officer C. E. Andrews confirmed that the acquisition of the his organisation's uk firm by BDO UK could be the first step for further collaboration.

"The deal enhances our relationship with BDO for future global opportunities and support," he said.

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MorganFranklin

Nearly half of the US senators, 46 out of a 100, have signed a letter to the chairman and ranking member of the Senate Finance Committee opposing a switch to accrual accounting for tax purposes.

The letter responds to the proposals of The Cost Recovery and Accounting Discussion Draft published by the US Senate Finance Committee in November 2013, which forms part of a broader tax reform under consideration by the US Congress.

The discussion draft suggest that all businesses with average annual revenues of $10m or less will be allowed to choose to adopt either a cash or accrual accounting method. While businesses with average annual revenues of over $10m will be required to adopt accrual accounting.

"As the Finance Committee develops its comprehensive tax reform package, we ask that you consider the negative impact that this proposal would have on the professional services sectors as well as farming and ranching businesses," the senators wrote. "Requiring more businesses to use the accrual method of accounting would create unnecessary complexity in the tax law and substantially increase compliance costs."

In addition to the substantial cost of changing accounting systems, businesses would also be burdened by having to pay tax on income before it is actually received, the senators argues. In their letter, they take the examples of professional services businesses, which include CPA firms, who must pay their employees and fixed operating expenses regardless of when their clients pay them.

They also took the example of farms and ranches which they say would face additional complications because under accrual accounting, "growing crops and raising livestock are considered production activities that would have to be accumulated as inventory and deducted when the commodity is sold".

The senators wrote that in both the case of professional services businesses and farms and ranches, the acceleration of the business' tax liability combined with the inability to match revenues with expenses would force businesses to borrow money to meet their tax liability.

"The basic tenet of taxation is 'ability to pay'," they wrote. "Forcing businesses to recognise income before they receive payment violates this basic tenet."

A spokesperson from the American Institute of Certified Public Accountants (AICPA) told The Accountant: "The AICPA's view is that any tax reform should meet two tests: simplicity and fairness. The accrual requirement fails on both counts. It is under consideration only because it would allow the government to collect revenue from affected businesses sooner - although it would put those businesses at a serious economic disadvantage by doing so."

The US Senate Finance Committee was not available for comment at the time of publication.

Betfair, the world's largest internet betting platform, has admitted a £80m ($135m) payout to its investors violated Institute of Chartered Accounts in England and Wales (ICAEW) guidelines, according to the Financial Times (FT).

Three payouts in 2011, 2012 and 2013, worth £30m overall, as well as a £50m share buy-back constitute a breach of accounting rules as they occurred at a time when the company's insufficient distributable reserves would have prohibited such payments.

The issue is grounded in a 2010 change to the way a company's realised profits and distributable reserves are defined.

Both Betfair and KPMG, the company's auditors, appear to have failed to register the change.

Betfair's latest annual report explained: "As a result of certain changes to the technical guidance issued by the Institute of Chartered Accountants in England and Wales (ICAEW) in October 2010, the Company did not have sufficient distributable reserves to make those distributions and so they should not have been paid by the Company to its shareholders."

According to the FT, deed polls have been put in place to protect investors from having to repay the dividends and the company is expected to approve the cancellation of affected shares at its annual general meeting in September.

A spokesman for the company described the error as a "minor technical point arising from 2010", with "no impact on shareholders", reported the FT.

At the time of publication, KPMG was unavailable for comment.

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Institute of Chartered Accountants in England and Wales (ICAEW)

KPMG UK

Global network RSM International has added three correspondent firms in Benin, Cameroon and Burkina Faso.

The new firms, Cameroun Audit Conseil (Cameroon, with an office in Congo), Canal Audit SARL (Benin), and Seccapi Sarl (Burkina Faso) have increased RSM's clout in Africa by 25%, according to the network.

RSM's latest additions in Africa follow last year's admittance of SIAO Partners, the fifth accounting firm in Nigeria by revenue, and the network currently counts fifteen member and correspondent firms across the continent.

RSM International chief executive officer Jean Stephens described the network's three new members as "leading African firms" and added: "Business in Africa is developing rapidly and as demand for professional services in the region continues to grow it is imperative that we ensure RSM is represented by very high quality local businesses."

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RSM International adds members

RSM International adds Panama firm

EY has appointed Uschi Schreiber to global vice chair for markets and chair of the global accounts committee. The role sits within the network's most senior management body, according to EY.

Prior to her new role Schreiber was EY's global sector leader for its government & public service practice from 2010 to 2014. The appointment makes Schreiber the fourth woman on the global management team.

George Atalla, who joins the firm from Booze & Co., is to succeed Schreiber in the role of global sector leader for its government & public service practice. Atalla's pervious role was vice president at Booz & Co., where he led their government & public sector practice across the Middle East and Africa regions. Booze & Co. was acquired by PwC earlier in the year and rebranded to Strategy&.

Tax leader
EY has also appointed Jay Nibbe to global vice chair for Tax, leading more than 35,000 tax professionals around the world.

Nibbe chairs EY's tax executive committee and is also a member of EY's global executive, the organisation's highest management body.

Nibbe, who joined EY in 1985, was most recently the chair of EY's global accounts committee and deputy area managing partner for (EMEIA). Previously Nibbe also worked as Americas vice chair of tax and Americas tax managing partner.

Prior to his leadership roles in the Americas, from 1995 to 1999, Nibbe was based in Moscow where he led tax in the Commonwealth of Independent States for four years, developing EY practices in Russia, Kazakhstan, Azerbaijan and Ukraine.

Related article:
Uschi Schreiber: Global leader and a role model for women
http://www.internationalaccountingbulletin.com/features/profile-global-leader-and-a-role-model-for-women-4327444/

By Steffen Müller

Nexia International has added Georgien firm Nexia TA to its network.

Nexia TA, based in the capital Tbilisi, is the network's first firm in Georgia. It provides audit, accounting, tax, consulting and valuation services through two partners and eight staff.

"We are delighted to be the network of choice for Nexia TA. Their membership gives us a vital presence in Georgia and means that other member firms can provide local assistance to their clients operating in the country," Nexia International chief executive Kevin Arnold said.

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Nexia International

Geneva Group International (GGI) has added member firms Walker Davey and Blackmore Virtue & Owens (BVO) in New Zealand.

Located in Christchurch, Walker Davey was founded in 1999 and covers business services, including accounting, budgeting, payroll, management consulting and strategic planning, as well as tax services ranging from goods and services tax to tax consulting and fringe benefit tax.

The firm currently counts 26 employees and six partners.

Auckland-based BVO was founded in 1958 and employs a team of 23 professionals and four directors. Among the services offered by the firm are: business accounting, tax compliance and consultancy, audit and assurance, valuations, estate planning, asset protection, business planning, financial reporting and property management.

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Walker Davey

BVO

The UK Financial Reporting Council (FRC) is to pursue an investigation of Grant Thornton UK's preparation, approval and audit of the financial statements of AssetCo, a management and resources provider to the fire and emergency services in the Middle East.

The FRC will look at Grant Thornton UK's audits of AssetCo. for the years ended 31 March 2008 to 31 March 2010.

A Grant Thornton UK spokesperson said: "I can confirm we have received a letter from the Financial Reporting Council informing us of its decision to commence an investigation, and we will, of course, fully cooperate in this matter."

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FRC

Grant Thornton UK

Baker Tilly International has added Tokyo based firm Nihombashi Corporation to its network.

Founded in 1952, Nihombashi Corporation provides audit services through 12 partners and 40 staff.

The firm's chairman and Japanese Institute of Certified Public Accountants' (JICPA) vice chairman Katsushi Kuroda said his firm would be honoured by the admission.

"Our multinational and local clients will benefit immensely from the expertise of the global network and we are keen to promote the wide range of services that are now available to them through our membership of Baker Tilly International," Kuroda continued.

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Baker Tilly International

Nihombashi Corporation

PwC has entered into an agreement with UK based global consulting, valuation and training organisation SHASAT to offer International Public Sector Accounting Standards (IPSAS) training workshops in three continents.

The collaboration will provide IPSAS courses to public sector professionals in London, Brussels, the Hague, Geneva, Dubai, Abu Dhabi and Miami.

PwC chair of IPSAS technical working group Patrice Schumesch said: "PwC supports the development of IPSAS with the aim to promote transparency, democratic accountability and enhance good governance and public financial management by public sector entities around the world."

According to PwC, the five-days workshops are tailored to instruct attendees to understand and apply IPSAS principles, concepts and knowledge; to embed the standards within their organisation and assess their impact; and to produce and interpret financial statements and information on cash and accrual basis.

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SHASAT