Alibaba lists in Hong Kong
Chinese e-commerce giant Alibaba Group Holding Ltd listed on the Hong Kong Stock Exchange on 25 November, in reportedly the world’s biggest initial public offering this year. Shares closed at HK$187.60, 6.6 percent higher than the offering price of HK$176, creating the city’s biggest stock with a market value of HK$4 trillion. The listing was the most traded stock, making up 10.5 percent of turnover on the main board. Alibaba Executive Chairman and Chief Executive Officer Daniel Zhang was present at the ceremony, while founder Jack Ma delivered a video message before the event. Alibaba first listed on New York Stock Exchange in 2014. The company said it will use the proceeds from the share sale for strategies to expand its users, help businesses with “digital transformation, and continue to innovate and invest for the long term.”
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U.K. regulator to publish to publish poor audit results
The Financial Reporting Council (FRC), the United Kingdom’s accounting watchdog, has vowed to publish grades for audit inspections, saying that the quality of audits by the biggest accounting firms has fallen short of necessary standards. The move, according to the FRC’s Developments in Audit 2019 report, will apply to audits from March 2020 onwards. It will name the firm and client being audited if both parties consent to the disclosure. The FRC’s current annual inspection reports only give overall assessments for each accountant, with no specific grades for a named company’s audit. “At a time when the whole audit market faces reform, we expect audit firms to make audit quality their number one priority and to have effective programmes of work to deliver consistently high standards,” said David Rule, Executive Director of Supervision at the FRC.
U.S. court bocks release of Trump’s tax records
The United States Supreme Court this month temporarily blocked an appeals court ruling requiring U.S. President Donald Trump’s accounting firm, Mazars USA, to hand over eight years of tax records. President Trump, who is being investigated over payments made to two women during his 2016 presidential campaign, has been fighting to shield the records from becoming public since being issued a subpoena in April this year by the House Oversight and Reform Committee. There were no dissents following the President’s emergency request to block the subpoena. The high court’s stay will remain in effect until 5 December, the deadline it has given the President’s legal team to file its appeal of the lower court’s ruling.
Xero releases annual accounting industry report for 2020
Cloud accounting software company Xero has released its annual Accounting Industry Report for 2020. The company surveyed 146 accounting and bookkeeping companies in Hong Kong and 349 in Singapore to assess their business performance in relation to technology adoption. The report found that the adoption of data automation tools has led to a 140 percent increase in advisory revenue for pacesetting firms in Hong Kong. Pacesetting firms reduce client servicing hours by almost 50 percent, from the industry average of 518 hours to 249 hours per client. The report also found a link between a lack of cloud technologies and increased hours used to serve clients, with 40 percent of small business clients of complex advisory firms still preferring traditional methods of working.
European bankers want trading day shortened by 90 minutes
Banks and fund managers want the European stock trading day to be shortened by 90 minutes, saying that it will improve market efficiency and staff well-being. Europe has some of the longest trading hours of eight and a half hours compared with six and a half hours in New York and five and a half hours in Hong Kong. The Association for Financial Markets in Europe said shorter hours would “concentrate liquidity leading to more consistent trading costs and provide greater time for traders and the market to digest corporate announcements” and would ensure better mental health for traders. Rainer Riess, Director General of The Federation of European Securities Exchange disagreed, noting “a reduction in trading hours in Europe would give an advantage to other jurisdictions in similar or equivalent time zones to expand their trading hours.”
Tax evasion cases drop by 11% in the U.K.
The number of arrests made in the United Kingdom for suspected tax evasion has decreased by 11 percent to 782 cases this year, down from 877 cases made from 2017 to 2018, according to corporate and insurance law firm RPC. The drop is partially due to Her Majesty’s Revenue and Customs (HMRC) using its powers of arrest more responsibly, which previously led to a number of wrongful arrest claims brought by taxpayers. HMRC now has over 1,500 officers with the ability to arrest a person, provided certain conditions have been satisfied. “Fewer arrests could be a sign that HMRC is now exercising its powers of arrest more responsibly and in accordance with the law,” said RPC Partner Adam Craggs.
RSM to merge five firms in France
RSM International will merge five of its regional firms in France into a single legal entity in a move to push forward the group’s single culture and brand. The merger will take place in July 2020. The five firms, which have doubled their revenues and workforce over the past five years, currently have a total of 85 partners and 1,000 employees and plan to add a further 200 employees by the end of next year. “RSM France is entering into a new chapter. Moving from separate legal, regional entities towards one single, national entity reflects our strength and growth opportunities,” said Jean-Michel Picaud, President of RSM France.
The Pentagon discovers unaccounted equipment during audit
The Pentagon found US$81 million of military equipment at a U.S. Navy base in Jacksonville, Florida that had not been inventoried, according to a top Pentagon official on 20 November. The audit discovered major flaws in how the Pentagon handles IT processes and challenges with its internal tracking databases, but did not discover any major cases of fraud or abuse. David Norquist, Deputy Secretary of Defense, told a U.S. Senate panel that the Pentagon had “made progress toward fixing accounting irregularities, but that it will take years to eventually pass a full audit.” The secretary said it was the Department of Defense’s second failed audit in a row, following a comprehensive audit last year on the organization’s weapon systems, military personnel and property.
IFAC board comprises of more women
The International Federation of Accountants (IFAC) has named its first-ever board with a majority of female members. The IFAC board, which was approved at its annual council meeting in Vancouver this month, now has 12 women in its 23-member panel. IFAC has dedicated the last decade to improving the gender balance on its board and committees. “Each of these individuals was nominated and approved on the basis of their leadership qualities, business acumen, and passion for the future of our profession. We are particularly pleased that, as a result of our deliberate focus on gender diversity, the majority of these well-qualified board members are women,” said IFAC President Dr. In-Ki Joo.
Hong Kong’s virtual banks in talks with Jetco
Hong Kong’s eight virtual banks are working with Joint Electronic Teller Services (Jetco) to provide customers of branchless banks access to more than 2,000 ATMs across the city, despite not being allowed to operate any physical branches under the terms of their license from the Hong Kong Monetary Authority. Jetco operates more than half of Hong Kong’s 3,300 ATMs. Angus Choi, Chief Executive Officer of Jetco, said: “The virtual banks may opt to issue cards to customers to use the Jetco ATMs owned by other banks, or they can allow access through a mobile application on their smartphones.”
Former CEO of audit regulator to head FLA
Stephen Haddrill, the former chief executive officer of the U.K.’s Financial Reporting Council (FRC), has been appointed Director General of the Finance and Leasing Association (FLA). The FLA is the U.K.’s leading trade body for the asset, consumer and motor finance sector. Haddrill, who held his former post at the FRC for ten years, will begin his new term at the FLA next month. Haddrill announced his resignation from his post as CEO last October following criticism surrounding the FRC related to its oversight of various company collapses. Richard Jones, FLA Chairman said: “I look forward to working with him as he leads the FLA on to its next chapter, supporting its members by progressing and championing the long-term prosperity of our markets and the customers we serve.”
