Accounting news

 


Stronger regulator to replace U.K. audit watchdog

Britain’s accounting watchdog, the Financial Reporting Council (FRC), will be replaced by a new regulator with more stringent powers, in a bid by the government to restore public trust in the audit market. The Audit, Reporting and Governance Authority will be able to investigate company directors, issue a wider range of sanctions in cases of corporate failure, and publish reports into a company’s conduct and management. The move comes amid the FRC’s effectiveness being scrutinized following the collapse of Carillion, and accounting scandals at BHS and Patisserie Valerie in the last few years. Chairman of the FRC, Win Bischoff, will step down from his position once the leadership of the new body is appointed.



 New law gives Hong Kong citizens new tax breaks

Hong Kong lawmakers passed an amended law on 20 March allowing taxpayers to collect up to HK$60,000 in tax deductions. The new law, which comes into effect on 1 April, aims to encourage more voluntary retirement savings in pension schemes. Citizens will be able to claim their deduction on their tax returns in the new financial year. Wong Ting-kwong, lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong, said the new law hopes to encourage more people to better prepare for retirement. “We support the law change, but we would also like to see the government review the scheme in the future and increase the tax incentive cap to HK$100,000.” The government is also introducing a Voluntuary Health Insurance Scheme to ease the strain on overburdered public hospitals. It hopes to shift 1.5 million people from public to private health care by offering the public a range of private health insurance products.



EY Japan appoints first female chair

Ernst & Young ShinNihon has appointed Masami Katakura as chair of the firm, beginning 1 July. The appointment marks the first time a woman will hold the position of chair of any major or mid-sized audit corporation in Japan, according to the firm. Katakura, aged 50, originally from Tokyo, first joined the firm’s predecessor Ota Showa Audit in 1991, made senior partner in 2011 and was later promoted to managing partner in 2016. She will lead the digitization and globalization of operations. Current Chairman Koichi Tsuji will go on to lead the parent company, EY Japan. According to a study by McKinsey & Company, Japan significantly lags behind other countries in Asia in terms of female board-level representation.


£1 trillion moved out of U.K. in light of Brexit

Financial services companies in the United Kingdom have begun initiating no-deal contingency plans, shifting an estimated £1 trillion worth of assets out of the U.K. The move is an attempt by financial services firms to mitigate the impact of a no-deal Brexit on their business and customers. According to EY, 39 percent of all financial services companies publicly announced their intentions to move part of their operations out of the U.K. as of last month, up from 36 percent in November last year. Dublin is the most preferred location for companies moving operations, followed by Luxembourg and Paris.


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