The Hindu Business Line : Call an auditor to blow the whistle

ONE of the recent corporate reforms has been to put whistleblowers on a pedestal. The Sarbanes-Oxley Act too mandates it, to ensure better governance. Thus audit committees have to allow employees to report accounting or auditing irregularities, sheltered by anonymity. Among the techniques used are whistleblower hotlines and facility to report suspicions through the Intranet. "Many companies in the US and Canada are looking for outside companies to sift through the anonymous phone calls, e-mails and faxes and investigate suspected fraud," says AccountingWeb, citing the Globe and Mail of Toronto.

The advantages are: speed of processing complaints, else whistleblowers lose confidence and may resort to contacting the press; and confidence for employees that anonymity will be safe. A statistic that is cited is that "about one-third of corporate frauds are brought to light by a whistleblower."

Here is a break-up of 150 calls received by KPMG over a four-month period at one company: "Two-thirds were either malicious or unfounded and were handled quickly. Of the one-third that required more work be done, two were about genuine issues of serious wrongdoing that required attention." Here, we may need whistling booths, at least as many as there are for STD, to trap irregularities.

From accounting to Nobel

HERE is something for accountants to be proud of: KPMG International has been named the Global Founding Partner of the Nobel Peace Centre in Oslo, Norway, "as a demonstration of its global commitment to inspire leadership, ethics and responsibility", notes AccountingWeb. Accordingly, KPMG will help establish the Peace Centre "as a resource for public information and discussion about the topics of war and peace, and conflict resolution, as well as a forum in which to present the work of Alfred Nobel and the Nobel system, the Peace Prize Laureates, and the Nobel Committee."

Something that fills the lacuna of there being no Nobel for accounting.

Number crunching to video streaming

CONSUMER response to streaming video advertising on the Web is high according to a recent study by Dynamic Logic: "Brand awareness increased 54 per cent, advertiser's brand favourability increased by 40 per cent, key message retention increased by 144 per cent and purchase intent increased by 47 per cent." Using this, an accounting firm has decided to set the bar for Web site excellence.

"Gilbert Associates Inc., recently announced the launch of their redesigned Web site at www.gilbertcpa.com. With the use of streaming video, the firm's Web site now has the impact of a successful television and print campaign online," according to AccountingWeb. Check it out, though I'm sure the Institute would not okay all those jazzy things on your site.

More workaholics than sick

BAD news: Number of sick days taken by staff has risen. Good news: Accountants are bucking the trend. These are the findings of an accountancy recruitment firm in the UK, Nicholas Andrews and Temps Financial, reports AccountingWeb. "UK workers took 176 million sick days last year costing £11.6 billion. However estimates of those taken as a result of feigned illness were in the region of 15 per cent. Nevertheless, fewer than one in 10 accountancy staff would be willing to throw a `sickie', the questionnaire revealed."

The following questions crop up: "Are we impressed by accountants' devotion to duty? Or is it the case that financial professionals are working in a culture dominated by performance anxiety in response to staff cuts over the past couple of years?" Any answers?

Dirty half-dozen

THE global anti-money-laundering body, the Financial Action Task Force (FATF), has slimmed down its notorious blacklist to six, observes Accountancy. "At its July meeting, the FATF removed Guatemala, leaving Nauru, Myanmar, Nigeria, the Cook Islands, Indonesia and the Philippines." The Cook Islands has done some positive work: Such as introduce the Crimes Amendment Act 2004, the Financial Transactions Reporting Act 2004, the International Companies Amendment Act 2004 and the Proceeds of Crime Amendment Act. "Nine of the country's 16 offshore banks have applied for licences under the new Banking Act."

Yet, the FATF wants the Cook Islands to implement anti money laundering legislation. Ditto with Nigeria and Indonesia. "Egypt and Ukraine were removed from the blacklist in February. Originally the FATF identified 23 non-cooperative countries and territories, of which 17 are now seen by the body as compliant." The Task Force shares space with the Organisation for Economic Co-operation and Development (OECD) in Paris. The OECD has also been against harmful tax practices, and published a similar blacklist. "The OECD has persuaded 33 jurisdictions to sign up for co-operation on this process. Five jurisdictions remain non-cooperative. These are: Andorra, Liberia, Liechtenstein, the Marshall Islands and Monaco," reports Accountancy. See if you can find them in your atlas.

The LLP lollipop

IN THE race among the Big Four, PwC retains its top slot in the UK, although revenues fell by 6 per cent observes Accountancy. "Deloitte comes in at number two, with Ernst & Young and KPMG in third and fourth place." Top 60 UK firms "have taken or are actively considering taking steps to limit their liability, mainly through the LLP route."

A consequence of the new law on limited liability partnership. "LLPs are required to produce annual accounts and there is a penalty and disqualification scheme for LLP members that is broadly equivalent to the one for company directors." Won't the Indian CAs too like the LLP lollipop?

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