International

Tax

IRS Bills British Drug Company $2.7 Billion

Europe's largest pharmaceutical company, GlaxoSmithKline (GSK), said Wednesday that it will fight a tax bill that may total more than $5 billion.The Internal Revenue Service (IRS) contends that Glaxo Wellcome, legacy company of GSK, owes $2.7 billion in additional taxes for the years 1989 to 1996, the company said in a statement. GSK estimates that the interest would add $2.5 billion to the bill, Reuters reported. GSK was formed three years ago by the merger of Glaxo Wellcome and SmithKlineBeecham.
Community News

Parmalat Suits Start Piling Up, Deloitte and Grant Thornton Dropped as Auditors

Three law firms have said they filed or started lawsuits against Parmalat, dubbed (Europe's Enron), the Italian food giant that is enmeshed in a multibillion-dollar accounting scandal.On Wednesday, Parmalat's court-appointed administrator formally dropped Deloitte as one of the group's auditors, following the move earlier this week to remove Grant Thornton, the other auditor.
Community News

Parmalat Probe Widens, Bruising Grant Thornton

In a widening fraud scandal that is being called "Europe’s Enron," two executives at Grant Thornton’s Italian unit have been arrested for their involvement with the now-bankrupt Parmalat.The executives arrested Wednesday are Lorenzo Penca, chairman of the Italian branch Grant Thornton SpA, and Maurizio Bianchi, a partner in the firm's Milan office. Penca promptly resigned, while Grant Thornton International suspended Bianchi.

EU Guidelines Issued to Help with IFRS Implementation

The European Union has issued guidelines to help companies grapple with the biggest accounting change in decades, which is aimed at bringing uniformity to the reporting practices of the 7,000 listed companies in what is soon to be a 25-country bloc.The guidelines, which were anxiously anticipated by affected companies, advise companies to phase in the new rules over the next year to be ready for full adoption in 2005. The new rules do not include a restatement of accounts for years prior to 2004.
Community News

Tighter Regulations in Store for UK Corporations

A new bill in the UK calls for criminal charges against directors who lie about company finances and beefed-up enforcement powers for regulators.The bill, which is expected to become law next year, is designed to improve standards of corporate behavior in the UK to prevent the kinds of accounting scandals that have plagued U.S. companies, The Guardian of Manchester, England reported."There is no denying that financial markets around the world have been badly shaken by the corporate failures of the last few years,” said Trade Minister Jacqui Smith.
Community News

$32 Million Settlement Reached in Deloitte Hedge Fund Case

Deloitte Touche Tomatsu's Bermuda affiliate has agreed to pay $32 million to settle lawsuits over its audits for the now-defunct Manhattan Investment Fund, a hedge fund that cost its investors millions when it collapsed four years ago.The settlement was given preliminary approval last month from the federal district court in New York. A hearing on final approval is expected sometime next year."Deloitte & Touche Bermuda believes that it performed its audit work in accordance with all applicable professional standards," a Deloitte spokeswoman said.

Foreign Outsourcing Expected to Grow, but Tough Issues Abound

As outsourcing technology jobs overseas becomes more widespread, businesses are learning they have to be sensitive to their customers’ concerns as well as their bottom line.U.S. companies are becoming increasingly reliant upon contractors in cheaper labor markets abroad to handle customer service calls, programming, processing of forms and other tasks. But companies are also finding that customers sometimes balk at talking to a customer service representative on another continent.
Community News

Board Adopts Rules For Non-U.S. Firms, July 2004 Deadline

On Tuesday, The Public Company Accounting Oversight Board voted unanimously to propose for public comment rules relating to the inspection and investigation of non-U.S. public accounting firms. The Board also voted unanimously to propose extending the registration for non-U.S. firms by 90 days to July 19, 2004. Section 106(a) of the Sarbanes-Oxley Act of 2002 provides that any non-U.S. public accounting firm that prepares or furnishes an audit report with respect to any U.S.
Community News

Board To Consider Rules Related to Oversight of Non-U.S. Accounting Firms

The Public Company Accounting Oversight Board has scheduled an open meeting for 2 p.m. Tuesday, December 9, to consider whether to propose and seek comment on rules related to inspections and investigations of non-U.S. public accounting firms that register with the Board. The meeting will be held in the Chandelier Room at the St. Regis Hotel, 923 16th St., N.W., in Washington, DC.
Community News

Canada Follows U.S. Lead With Strict Independence Standard

Canada’s chartered accountants have adopted a tougher independence standard that closely follows regulations issued in the United States after a series of corporate accounting scandals."The core principle of the new standard is that every effort must be made to eliminate all real or perceived threats to the auditor's independence," the Canadian Institute of Chartered Accountants (CICA) said Thursday.
Tax

Texas Society of CPAs Speaks Out About Foreign Outsourcing Trends

In a recent letter to Scott Voynich, Chairman of the Board of Directors for the AICPA, the Executive Board of the Texas Society of CPAs has expressed concern over the growing trend of CPAs outsourcing services to foreign countries. You may read and comment on this trend below. AccountingWEB members may add their comments below. Just click on the orange comment button below this article and add your comments and thoughts on this issue. Letter to the AICPANovember 11, 2003S.
Community News

KPMG Separates Legal Services, Discussing Formation of New Legal Group

KPMG announced this week that it will stop providing full-scope legal services, and that its associated legal network – KLegal International – is to be discontinued.Member firms of the KLegal International network are now discussing the formation of a new legal grouping that will be completely independent of KPMG, and which will work with KPMG member firms - where appropriate - on a non-exclusive basis. The announcement reflects changed market conditions, including the U.S.

Foreign Registrants Face Unprecedented Shareholder Class Actions

According to PricewaterhouseCoopers research, 13 foreign companies have been sued in shareholder class actions through November 3, 2003.In 2002, PricewaterhouseCoopers Foreign Securities Litigation Study reported an unprecedented 22 foreign issuers who were named in securities class actions, an increase of 47 percent over the 15 cases filed in 2001. (Note: 2001 numbers exclude "IPO Laddering" cases).PricewaterhouseCoopers' research shows that since the start of 2002, foreign issuers have agreed to pay a total of approximately $700 million to settle shareholder class actions in the U.S.

US and Finland go Head to Head in Competitiveness Report

The United States and Finland are the two most competitive economies in the world, according to a report by the World Economics Forum. Finland is the most competitive economy in the world, followed by the United States, Sweden, Denmark and Taiwan respectively. Highlights of The ReportFinland is the most competitive economy holding first position in the Growth Competitiveness Index rankings due to a good all-round performance.

IFAC & International Regulators Propose Reforms to Strengthen Audit Quality

The international accountancy profession, together with international regulators, are spearheading reforms to improve the quality of standards and practices in auditing and assurance worldwide and to achieve global convergence of high quality standards. Their focus is on strengthening the international auditing and assurance standards process to bolster public confidence in the work of auditors and in the financial reporting process.

PCAOB Releases Parameters of Non-U.S. Accounting Firms

The Public Company Accounting Oversight Board today released a briefing paper that describes the broad parameters of the Board’s approach to the oversight of non-U.S. accounting firms.The briefing paper describes the Board’s plans for oversight of non-U.S. registered public accounting firms, based on cooperation with appropriate non-U.S. auditor oversight authorities.
Community News

US, EU Close to Agreement on PCAOB Registration

U.S. and European Union regulators are nearing agreement over the once-controversial matter of European companies registering with the Public Company Accounting Oversight Board (PCAOB).As part of the Sarbanes-Oxley Act, all domestic and foreign firms auditing publicly held firms in the U.S. must register with the PCAOB. Domestic firms have until October 22, 2003.

Report Ranks Countries' Corruption Levels, U.S. Ranks in Top 20

A report released by the Berlin-based Transparency International (TI) ranks countries based on the perceived level of corruption that exists among politicians. Finland ranked as the least corrupt country in the world, but the United States made it into the "Top 20." The TI Corruption Perceptions Index (CPI) ranks 133 countries in terms of the degree to which corruption is perceived to exist.
Tax

U.S. Companies May Receive Tax Windfall

On Wednesday, the Senate Finance Committee approved a bill that would provide a reduced tax rate on income that has been held overseas. Analysts say it is likely the bill will become law.This proposed legislation is yet another attempt on the part of our legislators to replace the U.S. export credit that has been available to U.S. companies that sell their products abroad. The World Trade Organization (WTO) gave the U.S.

Accountants, Lawyers Face Death Penalty For Aiding Terrorists

The restrictions on those providing professional services are getting tighter all the time. And now they've been kicked up another level.Accountants and lawyers in Malaysia may be looking up at the gallows soon if they are found guilty of providing professional services to terrorists or terrorist groups.Earlier this month, the parliament in Malaysia began deliberations over whether to amend the country's penal code to incorporate death by hanging for those who provide terrorists with professional services or facilities.

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