by Edgar

ACRA’s proposal to draw talents into audit

On July 25, 2007, ACRA has proposed some bold moves to ease the talent strain in the audit profession as follows:-

  • It is seeking feedback on how to make it easier for mid-career professionals such as bankers and financial analysts to switch to accounting.
  • To consider the possibility of letting international auditors with specialised expertise to practise here.
by Edgar

Water Conservation Tax – You kena tax twice!!!

Karma Tsultrim Wangchuk highlighted in his/her letter to ST Forum today that we are being charged GST on Water Conservation Tax. Are we being tax on a tax? If it is, when? When have we been paying the Water Conservation Tax (WCT)?

I checked my latest PUB bill. There is an item called WCT valued at $3.54 ie. 30% of $11.82 worth of water I have used in the past month. GST of 7% is then applied on the total utilities costs and WCT. Wangchuk asked Ministry of Finance (MOF) to explain.

Ms Low Yin Leng of MOF justified the imposition of GST on WCT on the basis that:-
  • “WCT forms part of the total price of water” and;

  • “GST is charged on the final value of any goods or services consumed in Singapore”.

Wangchuk disagrees on the following basis:-
  • WCT does not form the total price of water as the proceeds from WCT go to MOF’s pocket and not PUB’s pocket.

  • PUB must be already charging an economic viable and sustainable pricing for water it is supplying to its customers.
WCT is truly and effectively a tax with the purpose of encouraging a change in behaviour and/or redirecting flow of economic resources.

Wangchuk cited a correct practice of GST on purchase of new cars ie.

“GST is charged on the selling price LESS ARF, COE, Registration Fee and Road Tax” as these are charges imposed by the LTA on vehicle buyers and do not relate to the provision of goods and services.

This leads me to cite my own doubt.

Are the smokers paying GST on the Tobacco Tax included in the selling price of a cigarrete pack?

Not that I care or worry that smokers have been overpaying. We want some consistency. So if PUB and/or MOF has/have made a mistake, just say so, correct the error and move on. Don’t try to explain your way deeper and deeper into the mess.
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by Edgar

teaching you about "ethics"

One of the biggest problems facing the accountancy profession across the globe is dealing with issues that bordered on ethical grounds.
A student asked me recently on what should he do when the auditor has asked him to disregard some audit errors done.
Taking a step back from such incidents, the biggests issues seem to be:-
  • how do we teach our students and
  • what to teach our students about “ethics”?
How do our students learn about managing ethical issues?

In July 2007’s Accounting & Business (A&B), “ethics should be taught (and learnt) as a part of lifelong professional learning”.

What to teach then?
Peter Williams in A&B presented 5 fundamental principles in:-
  • integrity —- [“yuen cherk”]
  • objectivity — [“unbiased and focused”]
  • professional competence and due care — [“got leow” and not “boh chap”]
  • confidentiality — [“your mouth must learn to talk less or stop talking”]
  • professional behaviour — [“dun anyhow”]

Friends – It is not easy to be a professional and an accountant at the same time.

by Edgar

HKEx has pushed its limit again

With effect from 25 Jun 2007, Electronic Disclosure Project (EDP), the new regime for electronic dissemination of regulatory information will be launched.

EDP would consist of the following items:-

  • mandatory paid announcements will no longer be required [notification in the newspapers will be eventually phased out – less advertising revenue for newspaper companies but lower cost of compliance for listed companies / good for the environment]

  • companies must eventually maintained their own website
My concerns
I don’t think HKEx and the respective listed companies are expecting the respective shareholders to prowl through a dozen of websites for any announcement that might impact them every day.

Eventually I would forsee the delivery of announcements and financial results by email to shareholders.

Then how about uncles and aunties who don’t email addresses? They will learn when making money is involved.

Environmentally, this is definitely a good move.

by Edgar

Practical Experience Requirement (PER) Part 5

This posting focuses on the person called MENTOR.

  • Who can be your mentor?
  • What is the purpose of mentor to PER?
  • Can I have more than one mentor?
  • Any advantage or disadvantage of having an ACCA member as a mentor?
  • What if my mentor is not an ACCA member? Will I be penalised?

For answers to the above, please read:-
http://www.accaglobal.com/students/publications/student_accountant/archive/2007/77/2957617

by Edgar

Practical Experience Requirement (PER) Part 4

Hi to existing student or affiliate,

If you belong to the above, you will be required to transfer to the new PER by 31 December 2007.

You will need to transfer any STR competences you have recorded under the current or pre-2001 scheme to the new PER.

I have just read this article that described the various actions needed for the following groups of student/affiliate:-

  • those who have completed the requirement under the old STR
  • those who have started but have not completed the STR
  • those who have not started at all

Read this article for a complete help – http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/pract0307.pdf

by Edgar

FRS39 Section 34A Impairment claims

Old rule – General and specific provisions for bad and doubtful debts were not tax deductible.

New rule (since Mar 6, 2006)

  1. Both individual and collective impairment must be recorded in the income statement and be eligible for tax deduction.
  2. For specific provisions to be tax deductible – subject to detailed info being available. What info? Not define by IRAS.
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by Edgar

Pay rise for new recruits to Big Four

The tight labour market has forced the Big Four accounting firms to increase the starting salary twice in 6 months.

So what is the starting salary? Your neck must be straining to know?
As per today’s ST, you should get about $2,400 with about 1,000 vacancies.

So what are waiting for?
Faster finish your ACCA papers and get your job applications in.
P/S – Govt is paying as much as $2,900 for accounting graduates.