OECD to tax tech giants
The Organization for Economic Co-operation and Development (OECD) announced a proposal on 9 October to prevent large digital groups such as Facebook, Apple, Amazon, Netflix and Google from shifting profits around the world in order to minimize taxes. The aim is to create a new and stable international tax system because “the current rules dating back to the 1920s are no longer sufficient to ensure a fair allocation of taxing right in an increasingly globalized world,” according to the OECD. The proposed changes will target digital giants with global turnover of more than US$1.23 billion. Tax experts and businesses, such as Amazon, welcomed the move, saying it was “an important step forward.”
IFAC sees strong adoption of global accounting standards
The International Federation of Accountants (IFAC) issued a report on 14 October indicating strong support for international accounting and auditing standards, especially in areas where IFAC members are involved. The report, International Standards: 2019 Global Status Report, includes data from over 170 accounting organizations in IFAC’s membership. It found that over 90 percent of the jurisdictions use International Standards on Auditing, International Financial Reporting Standards, and the International Code of Ethics for Professional Accountants. “Since there are no international laws requiring nations to adopt and implement international standards, support from IFAC’s member organizations for these dual objectives is critically important to progress,” stated IFAC Chief Executive Officer Kevin Dancey.
CEO of the SFC to step down next year
Ashley Alder, Chief Executive Officer of Hong Kong’s Securities and Futures Commission (SFC), will step down from his post at the regulator, where he has been CEO since 2011, effective 30 September 2020. “Mr. Alder has been at the helm of the SFC for eight years, during which the organization has pursued a set of intensive policy and operational reforms to tackle market risks as well as setting itself as a tough, competent and effective market regulator,” an SFC spokesman said. The commission has begun its search for a replacement.
PwC invests US$3 billion in new training programme
Big Four firm PwC is launching a programme that will provide training on digital skills for all of its almost 300,000 employees worldwide. The programme, entitled “New World, New Skills,” will see the firm invest US$3 billion over the next four years, which will go towards helping employees to build new skills in specialist areas such as data analytics, robotic process automation and artificial intelligence, and developing technologies to support clients and communities. “The skills gap is an issue that goes to the heart of our purpose and we have the scale and experience to make a measurable impact,” said Bob Moritz, PwC’s Global Chairman, in a statement. The move follows PwC’s annual earnings report, which showed global revenues of US$42.4 billion, up by 7 percent compared with last year.
Petroleum company plans to launch IPO worth US$2 trilion
Saudi Arabian petroleum company Saudi Aramco is to launch its initial public offering (IPO) on 3 November. The company plans to announce the transaction’s pricing on 17 November and start trading on the nation’s domestic stock exchange, Tadawul, on 11 December. The company, one of the most profitable in the world according to Bloomberg News, made US$111 billion in net income in 2018. The IPO, first announced in 2016, has been hit by delays amid speculation that it would fail to meet its expected valuation of US$2 trillion, with investors estimating a value between US$1.2 trillion to US$1.5 trillion. The company is in talks with investors as it seeks to bridge this valuation gap ahead of finalizing the pricing for the listing.
Gender pay gap drops to 39.3% at Deloitte U.K.
The pay gap between men and women at Deloitte in the United Kingdom narrowed to 39.3 percent this year, down from 41.1 percent in 2018, according to the firm’s 2019 Gender Pay Gap Report. Deloitte promoted 32 female partners in June, its highest number yet. However, Dimple Agarwal, Managing Partner for People and Purpose at Deloitte U.K. acknowledged “there is no quick fix to reducing the pay gap until our gender balance action plan has been embedded across all part of the business.” She added: “Our focus now is creating the building blocks for the future. We’ve reviewed all our recruitment and promotion processes to minimize bias and we are promoting more women to partner, director and senior manager.”
House passes corporate transparency bill
The United States House of Representatives passed a bill on 22 October that will require anonymous shell companies to disclose actual ownerships at the time a company is formed. The Corporate Transparency Act aims to clamp down on anonymous shell companies that evade law enforcement and hide illegal activities. “Anonymous companies are widely recognized as the single most dangerous and significant gap in our anti-money laundering framework,” said Gary Kalman, Executive Director of the Financial Accountability and Corporate Transparency Coalition, in a statement. The Senate will now decide whether or not to pass the legislation.
FRC investigates Thomas Cook auditors
The Financial Reporting Council (FRC) in the United Kingdom has launched a probe into Big Four firm EY’s audit of the accounts of U.K.-headquartered global travel group Thomas Cook. The accounting watchdog’s enforcement division will look at financial statements audited by EY for the year ending 30 September 2018. EY took over from PwC as auditors in 2017. “The FRC will keep under close review both the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook, liaising with other relevant regulators to the fullest extent permissible,” the FRC said in a statement. The travel group collapsed in September, impacting more than 20,000 jobs.
FASB and GASB looking to hire executive director
The Financial Accounting Foundation (FAF) trustees, the group overseeing the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) in the United States, have begun searching for a new executive director. The new executive director will lead a team of 45 professionals who offer support services to the FASB, GASB and the Private Company Council. The move comes as the terms for FASB Chairman Russell Golden and GASB Chairman David Vaudt are set to expire in June 2020. The FAF President and Chief Executive Officer Teresa Polley also announced her resignation in April.
KPMG U.K. considers closing members’ club
KPMG in the United Kingdom is exploring the possibility of closing its exclusive club in a bid to cut costs and boost investment in other areas. The five-storey club, named Number Twenty, is used by its partners and clients to dine and entertain, and has been in operation in London’s Mayfair district since 2015. The firm revealed 150 cost-cutting measures this month as part of its cost-saving scheme called “Project Zebra.” It also cut back on expenses this year by recalling corporate mobile phones from some employees, and making almost a third of its personal assistants redundant. The firm have yet to reach a decision on the closure.
Netflix accused of tax evasion in Italy
Prosecutors in Italy have launched an investigation into United States-based streaming service Netflix. Prosecutors are arguing that despite the fact that Netflix has no official physical presence in Italy, the company’s infrastructure, including servers and fibre optic cables that deliver content to its 1.4 million subscribers in Italy, qualify it as a local business, and that it should pay taxes. Italian prosecutors have previously probed other U.S. tech giants such as Apple, Amazon and Facebook for avoiding taxes, allowing Italy to collect several billion euros in fines and tax payments.
