The new Accounting Standards Council (ASC) will issue a separate set of accounting rules for Charities and Coops.
Donors to charities are more concerned with how the donated funds were used rather than financial performance information generally required by shareholders of companies.
The new accounting rules are still pending ie. waiting the new Council to get around to this issue.
The Courts of Appeal ruled recently on 2 fraud cases where the auditors took some blame for losses experienced by their respective clients.
What are the 2 cases?
- Case 1 – Gaelic Inns vs PlanAssure Public Accounting – I discussed it back in Feb 2007. Take a look. http://accountingwithedgar.blogspot.com/2007/02/denise-ang-and-her-gaelic-victim.html
- Case 2 – JSI Shipping vs TeoFoongWongLCLoong (Tfwl) – Mr John Riggs, the MD of JSI Shipping, made $1.8 million disappeared via its monthly salary! FYI – his salary represented 25% of total staff costs. The Court said “Tfwl should have shown more professional scepticism.” (In another word, the errors are so BIGG that normal human eyes should be able to see and check on them.)
So what is the penalty for not doing your job?
In Case 1, PlanAssure is to pay Gaelic Inn $317,108 (half of earlier ruling of $775,266) for contributing to the negligence.
In Case 2, Tfwl is to pay JSI $273,386 for being bo-chap to Mr Riggs’ activities.
As in any profession, auditors too have their fair share of problems and risks.
I was curious about where and how the terms debit and credit come about.
I finally come across a brief explanation of the terms.
The words have Latin origins ie. “debitum” and “creditum”. Pacioli is the name of the Italian monk who wrote about accounting in the 15th century and used these terms.
So they were NOT “debere” or “credere” as I thought they were initially. And the mystery continues ie. who was the inventor of these terms.
Well I learned something new today.
How does Singapore Financial Reporting Standards (SFRS) fare in terms of our assessment as being IFRS-equivalent?
One opinion said that SFRS are almost in complete sync with IFRS and are applicable to all entities. How come? Singapore generally adopts new or amended IFRS within a three-month period but there are some exceptions.
- FRS 40 Investment Property
IAS 40 was issued in year 2000 and effective for financial periods commencing Jan 1, 2001 while FRS 40 was issued in 2005 and effective for financial periods commencing Jan 1, 2007. By now, there are no timing differences between IFRS and SFRS.
Any difference between FRSs? Yes, the difference is in these areas:-
- Differing finance lease requirements
- One-off revaluation exemption from periodic revaluation for property, plant and equipment.
Anyway Accounting Standards Board (who will replace the Council on Corporate Disclosure and Governance with effect from Sept 1, 2007) is to present to Committee of European Securities Regulators (CESR) that the SFRS is equivalent to IFRS. Probably to get some sort of compliant certification from the Euro body.
Source – “Bridging the gap between accounting standards”, Aug 23, 2007, BT, Choo Eng Beng and Chew Tong Gunn