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A stormy start to a stormy year?

Wednesday 11 January 2012 - by Michael Izza


Another key topic under the audit headline is of course the European Commission's proposals for audit market reform, which will be debated by the European Parliament and Council in the coming months.

The proposals are likely to have a considerable impact on the profession. Some of the proposals have merit and will help enhance the service auditors provide but others are more questionable and may have unintended consequences.

Reporting issues: another turbulent area for the financial services firms and the accountancy profession over the next few weeks will be bank reporting, with the year-end reporting season due to kick-off shortly.

Financial institutions, auditors and users of financial reports will all have to pay particular attention this year to explain and understand the financial position of these institutions. Some of the areas in need of particular focus include transparency regarding what risks are taken to earn returns and details on provisioning against Eurozone exposures.


From a more accountancy technical point of view, there is also plenty to deal with in relation to financial reporting. The delayed decision by the US Securities and Exchange Commission on whether to adopt International Financial Reporting Standards (IFRS) is a big-ticket item.

A positive decision from the US will give the drive towards the development of a global financial reporting language a boost. Several important accounting standards are due to be completed this year as well, including new standards for revenue recognition, insurance and impairment, which will have wide-reaching impact on businesses all over the world when they come into force a bit further down the line.

Accountants and auditors have an important role to play in helping businesses ride out the storm. In other words; plenty to get on with. Happy 2012!

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