Ukraine Will Pursue Hard Reforms This Fall, Finance Minister Says

After a week of back-to-back meetings in Washington, Oleksandr Danylyuk is tired. He gladly downs a cup of coffee before we turn on our microphones to discuss Ukraine’s economy. The affable forty-two-year old finance minister is one of the few reformers left in Ukraine’s Cabinet of Ministers and has a reputation as a doer. He’s in town for the International Monetary Fund’s and World Bank’s annual meetings.

When Danylyuk took over after Natalie Jaresko stepped down in April 2016, expectations weren’t high, but he has exceeded everyone’s expectations. My colleague Anders Åslund captured it well: Danylyuk has “turned out to be the reform anchor in a government that has been less committed to reform than the previous government, and he has managed to keep the state finances in good order.”

The former investment banker managed to render elusive value-added tax refunds automatic, which pleases many foreign businesses, and has presided over a period of modest economic growth. In September, Ukraine returned to the international finance markets with the introduction of a $3 billion Eurobond, and analysts expect that there may be more offerings. Ukraine’s macroeconomic indicators are good, and Danylyuk has become one of the more convincing reform voices within the government—and someone that Ukraine’s formidable civil society actually respects.

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When SSARS does and does not Apply to Preparation Engagements

The Statement on Standards for Accounting and Review Services (SSARS) is a section of the professional standards set out by The American Institute of CPA’s (AICPA), seeking to review earlier standards for reviewing and compiling financial statements and setting out the terms of engagement between the CPA’s and the parties. This section has been set out by the Clarity Project of the AICPA’s Accounting and Review Services Committee (ARSC). The terms of engagement constitute a principal element of Section 21 of the SSARS.

The AICPA’s Section 21 is a significant improvement over the earlier standard, Section 19. Having come into effect in December 2015; AICPA Section 21 overrides the earlier standards. On its part, Section 19 was considered an improvement over the existing standards that had been getting enacted from 1978. It stressed the importance of the independence of the CPA, in that they should not be part of the board or management of the company whose accounts they are auditing. It also required the CPA to obtain an engagement letter before proceeding to prepare and issue financial statements.

 

Supersedes Section 19

Where Section 21 goes beyond Section 19 is in setting out the clear terms for a new service, that of preparing financial statements. Also, it takes changes brought about by technologies such as the cloud into the accounting profession, into consideration. It sets out these requirements in its four sections, sections 60, 70, 80 and 90. Briefly, these are what these sections represent:

Section 60: Describes the General Principles for Engagements performed in accordance with Statements on Standards for Accounting and Review Services

Section 70: Preparation of Financial Statements

Section 80: Compilation Engagements

Section 90: Review of Financial Statements

The highlight of Section 21 of SSARS is that these sections are clearly demarcated. One prescribed action should follow the other, only after the one taken up is completed. It draws a distinction between, for instance, financial statement preparation and a compilation, which is something that CPA’s have to submit for any financial statement submitted to third parties. In this way, Section 21 is a comprehensive set of regulations.

Complete clarity on Section 21

Want to understand how this section relates to your profession? Want to gain clarity and insights into the ways of the workings of this section? A webinar from Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance, has all the answers relating to the comprehension and implementation of Section 21 of the SSARS.

At this session, Candace Leuck, who owns Athena Finance Group, Inc., which specializes in strategic planning, distressed entity recovery, valuations, and educational programs; will be the speaker. To register for this highly interesting and valuable webinar, please visit Compilation and Review Updates

Understanding of all aspects of Section 21

The aim of this presentation is to familiarize participants with all the sections of SSARS 21. Participants will be able to understand general requirements for SSARS engagements and learn details of new financial statement preparation engagement requirements. Since Section 21 both supersedes Section 19 and differs from it in many ways, Candace will explain the details pertaining to understanding and implementing Section 21, which includes requirements for engagement letters, requirements for understanding of the client, industry and environment, when SSARS does and does not apply to preparation engagements, attest versus non-attest engagements, reporting requirements, and disclosure requirements.

She will cover the following areas at this webinar:

o  Understand general requirements for SSARS engagements

o  Learn details of new financial statement preparation engagement requirements

o  Review compilation and review engagement requirements

o  Discuss the elimination of “management use only” compilations

o  Understand new formats for compilation and review reports

o  Compare and contrast preparation, compilation and review engagements.

This webinar will be of high use to personnel whose work requires them to implement Section 21 of SSARS, such as Public Accountants, Managerial Accountants, and Financial Accountants.

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How to test your firm’s Compliance Program based on what the Regulators are Focusing on

The financial regulators publish a listing of their exam initiatives for the upcoming year. Financial advisers use this listing to anticipate what thinking the regulators bring into a financial year, which will have a major bearing on the financial industry. This listing offers financial advisers an idea of what to expect during a particular financial year.

For instance, taking off from the backdrop of the financial crisis of 2007 to 2009; the financial regulatory priorities listed out in a study carried out by Harvard included the following:

o  Increased capital regulation

o  Improved stress testing and capital planning

o  Regulation of the liquidity requirements

o  The need for learning the tools for regulatory migration across financial institutions

o  The authority the regulatory agencies have in regulating large financial institutions

These constitute the broad items of financial regulatory priorities. Financial advisers may use these financial regulatory priorities issued at a particular point of time to make assessments and calculations that help them arrive at decisions which they pass on to investors. However, different priorities emerge from time to time, simply because the financial situation is fluid and ever evolving.

Based on evolving priorities and situations

Financial advisers may make valuations and offer honest advice to investors about the financial markets, but these can be subject to flux. In the event of these changing goals and situations; it is not possible to arrive at black and white conclusions about the priorities.

Financial professionals and those who take their advice need to be fully alert to the happenings in the financial landscape if they have to arrive at the right decisions. How do they do that? What is the basis on which the exam initiatives need to be understood in order to facilitate sensible decision-making about finance?

Learning about how to understand exam initiatives

This is what a webinar from Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance, will be offering at a webinar. This webinar will have Lisa Marsden, IACCP, who is the President and Founder of Coulter Strategic Services. Coulter Strategic Services, which provides Financial Advisors and compliance consulting firms with compliance and project management services, as the speaker.

Please visit day to day tasks of financial compliance to enroll for this webinar and gain clarity in understanding the details set out in the regulatory exam initiatives.

Understanding how the priorities suit participants’ organizations

The speaker will explain what each financial industry participant needs to know about this year’s regulatory initiatives. She will highlight the importance of learning from priorities that are involved in the day to day tasks of financial compliance.

She will show how participants can learn the ways of reviewing the regulator’s annual priorities list and incorporating the priorities that relate to their own firm into their compliance program. The ways by which to test the specific areas and how to remediate any issues found, will be explained. Beyond the priorities, Lisa will also show how to find out what to expect from exams and how to test the suitability of the participants’ compliance program based on what the regulators are focusing on.

Lisa will cover the following areas at this webinar:

o  Learn how to gain access to the financial regulators priorities

o  Understand how to apply those priorities to your firm

o  Incorporate the priorities into your annual review

o  Distinguish which priorities need to become part of the Compliance Manual/Code of Ethics

o  Determine what your firm’s financial regulatory priorities should be

o  Other sources for annual priorities.

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Crypto-Mania Grips Hong Kong as City Looks for Life Beyond Banks

In the mid-1990s, Johnson Leung embarked on a career in shipping. In the early 2000s, he moved to finance. And now, he runs a Hong Kong startup that aims to improve how container ships are booked using blockchain technology.

Many in Hong Kong hope the city can make a similar leap. The shipping and banking hub, which has struggled for years to nurture a domestic technology industry, is embracing the blockchain revolution as it looks for new sources of growth.

Skeptics say it’s a risky bet on an unproven technology — one with more than its fair share of hype and, in some cases, fraud. But a growing number of Hong Kong entrepreneurs and policy makers are convinced the online ledger system that underlies cryptocurrencies like bitcoin will eventually reshape everything from financial services to supply chains. They say the city’s laissez faire approach toward regulation, along with its expertise in finance and logistics, make it a natural hub for blockchain startups.

“I don’t see why Hong Kong can’t be a leader of blockchain technology,” said Leung, who co-founded 300cubits.tech after more than a decade in the financial industry that included stints as a research analyst at JPMorgan Chase & Co. and Jefferies Group LLC. “It’s so new that it’s not like any country has a huge advantage compared to us.”

Hong Kong’s government has been throwing resources at the technology. The city’s monetary authority is developing its own digital currency and is testing blockchains for trade finance, mortgage applications and e-check tracking. Hong Kong’s securities regulator has joined R3, a global consortium that develops blockchain technology for financial transactions, while a government-backed research institute has worked on a blockchain-based system for tracking property valuations, among other initiatives. Hong Kong Exchanges & Clearing Ltd., the city’s publicly-traded exchange monopoly, plans to start a blockchain platform for early-stage companies and their investors next year.

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How to Achieve the best Outcome in an Audit

An internal audit, as we all know, is carried out for a number of specific purposes, the main one among which is to assess the adherence to the industry guidelines for quality and processes. Helping the organization meet the requirements of processes and standards, which are usually issued by regulatory agencies and other relevant bodies and boards, is the main aim of an internal audit. An internal audit seeks to bring about quality through standardization of many of the processes that go into the product.

In the context of the food industry, this adherence is all the more important, because food contamination is quite a serious issue in all parts of the world. According to statistics from the Center for Disease Control and Prevention (CDC); about one in seven Americans, or close to fifty million, get sick from consuming contaminated food. More than an eighth of a million people get hospitalized for this reason, and some 3,000 people lose their lives due to food contamination in the US every year.

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The major challenge in food contamination is to identify the source of the contamination. Since we humans eat a variety of foods in our meals, it is difficult to zero in on the exact source. Our food is usually consumed in variety, and most of it is from different and varied sources. If all of our food were derived from just one source, this task would have become interminably easier. But this is not the case; hence, the problem in identifying the source of the food contamination.

Means for ensuring quality

An audit is a sure method of identifying and preventing food contamination. An audit is a continuous process that is planned, specified, and carried out at set intervals and documented to determine the quality of a product. A food audit does all this to food products. It adds strength to the process of preparing, distributing and consuming food, and provides confidence that the food that we consume meets the standards set out for its quality and safety and has gone through the prescribed processes. This is the essence of a food audit, and this is described as such by the Global Food Initiative.

The main aims of an internal audit for food are twofold:

Apart from helping a food facility to locate and set right issues pertaining to the Quality Management Systems; a food internal audit identifies a problem before it gets detected by an external audit, and rectifies it. Doing so at this stage will prevent the problem from reaching the end consumer. All these conditions can be met when the internal audit is objective, is done with commitment and conviction, reviews the quality programs, and is comprehensive.

  • An effective food internal audit also ensures that the facility is adapting and implementing quality systems, which leads to involving top management into making improvements over time.
  • The FDA, many regulatory agencies from around the world and the ISO –in the form of 19011, and to a lesser extent, the ISO 9001, 14001 and 22000 –all have standards for food safety. An internal food audit should ensure that these are being complied with.

Get complete understanding of internal food audits

All the finer aspects of an internal food audit will be explained in detail at a webinar that is being organized by Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance. At this webinar, the speaker is Ruth M Bell, a Food Safety/Quality and HACCP Management Consultant, Auditor and Trainer based in the UK.

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To derive the benefit of the deep and varied experience that Ruth Bell brings to food quality, food technology and food audits; please enroll for this webinar by visiting Food Technology for Non-Technologists

The purpose of this webinar is to provide Internal Auditors with an overview of the tools and information they need to carry out thorough and productive audits. Ruth will give them the knowledge of how to achieve the best outcome in an audit. The learning from this session will help internal auditors gain knowledge of:

  • What an audit is and why they’re carried out
  • The skills and qualities needed by an auditor
  • Audit documentation and preparation
  • Audit techniques
  • How to judge non-conformances

This is a session that is highly useful for those involved directly in food quality audits or those who work with them. These include HACCP Team Members, Technical Managers, Production Managers, Engineering Managers, and Consultants.

Although meant for internal auditors, those planning to become Internal Auditors in the food industry, and Consultants; the learning from this webinar will benefit just about anyone involved in the auditing process, be they auditees or supervisors.

Ruth will cover the following areas at this webinar:

  • Audit Process
  • Audit Preparation
  • Audit Techniques
  • Questioning Techniques
  • Non-Conformities and Corrective Action Close Out
  • Audit Follow-up and Close Out.

Tool for Checking Corporate Revenue Accounts Frauds

Corporate revenue account fraud and account manipulation are serious issues for businesses in many parts of the world today. Although legislations such as Sarbanes Oxley have been passed with the intention of making corporates more accountable; corporate accounting is still vulnerable to manipulation and fraud. A company’s financial statement is a primary area in which a fraud can happen.

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A financial statement is the elementary piece of documentation which reflects a company’s financial stature. It mirrors the company’s financial health, and is the document that is taken up as reference for discussion and clarification during shareholders’ and board members’ meetings. Since they contain information about cash flows, balance sheets and income statements; financial statements are the reference point for judging the financial situation of a company.

Why does fraud take place in financial statements?

Financial statement fraud can happen for a number of reasons:

  • It can be carried out to deflate figures, so that shareholders may be paid lesser dividends than they deserve
  • Financial statement fraud can also be to report lesser incomes, so that the company pays lesser tax
  • They can also be inflated to raise more funding and capital

Financial ratios as a means of detecting financial statement fraud

Among the many mechanisms used for detecting financial statement frauds; financial ratios are an important one. They can be used to analyze and interpret the numbers in financial statements to arrive at an understanding of important aspects such as the following among others:

  • Is the company holding excess inventory unnecessarily?
  • Is it running a heavier debt than is necessary or manageable?
  • Are the payments from customers coming rightly, fully and on time?
  • Is the company spending a lot more on production than is necessary, i.e. is its operating expense on the higher side?
  • How is the company utilizing its resources and assets to generate revenues?

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Ways of using financial ratios to detect frauds

A financial analyst, or anyone connected with the company’s financial statements, such as a chartered accountant, auditor, stakeholders, and board members and so on, can use financial ratios to quickly analyze the situation. Whenever there is a change in the allocation or revenues from each source, the extent to which the changes happened needs to be explained. Unless there is a reasonable or convincing reason for which the values change from one year to another; it becomes a potential red flag that is worth investigating into.

And the percentage or extent to which the ratio changes in relation to the industry average can also be used as a reference. If the industry average for a certain item is say, 15% of the expense, and if there is a perceptible change in it from one year to another in a company’s financial statement, then that is something that needs to be looked into.

These are just a couple of examples of how ratios can potentially show up mismatches and anomalies in the financial statement.

Full learning on how to use ratios for detecting fraud

Is there a way of detecting these account frauds before they happen? Which are the warning signs and red flags that need to be taken note of when checking financial statements, so that these frauds are detected early, and the damage limited?

A webinar from Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance, will show which these are, and how they can be used. This webinar will offer an in-depth, professional way of using ratios for detecting financial fraud in companies.

At this webinar, Mike Morley, who is a Certified Public Accountant, business author and an entertaining and informative speaker and a recognized authority in the field of finance, will be the speaker. Mike offers various training programs, such as IFRS, SOX, and Financial Statement Analysis that focus on providing continuing education opportunities for finance and accounting professionals. It is this wide-ranging experience that Mike brings into this session on using ratios for fraud detection.

Please register for this webinar by visiting Detection in Corporate Revenue Accounts Michael will offer an overview of some of the best practices in ratio analysis for fraud detection in corporate revenue accounts used today. This will be highly useful to participants from the Finance sector, such as Accountants, CFO’s, Auditors –External and Internal, Business Managers, Forensic Accounting Researchers, and Fraud Investigators.

Mike will cover the following areas at this webinar:

  • External Pressures that Might Lead to Committing Financial Reporting Fraud
  • Internal Red Flags that Might Affect the Revenue Accounts
  • Ratios that Help Spot Unusual Financial Results
  • Ratios that Indicate which Transactions should be Analyzed in Detail
  • Ratios for Finding Account Balances that Might be Inflated

Ratios for Verifying the Relationship Between revenue and other Accounts.

Why is credit card surcharge an issue for businesses?

The credit card surcharge issue has always been a tricky one in the US. Back in 2005, this issue was the subject of an antitrust lawsuit, and the resultant judgment, which came in mid-2012 prohibited credit card surcharge in ten States. Another 12 States are in the process of implementing their laws.

Although credit card regulations have traditionally opposed surcharging; companies have been circumventing merchant rules to ensure that credit card surcharge continues to be made. Even as State laws will continue to override networks merchant rules; companies have been looking out for ways to skirt the laws.

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The credit card surcharging issue in the US

Why is credit card surcharge an issue for businesses? It is because the credit card surcharge is the last link in the payment chain and causes a business that makes use of this facility to incur expenses. In simple terms, this is the checkout fee that gets added to every consumer’s shopping bill whenever a credit card is used to make payments for the purchases made at the business. Businesses are not willing to bear this expense and like to pass it on to the consumer.

The court judgment of 2012 permitted charging of credit card surcharge for certain card transactions from January 2013. As a result, there has been a change in not only merchant processing transactions but also of credit card usage. The settlement makes it mandatory for businesses that levy the credit card surcharge to follow requirements relating to consumer disclosure and to set limits on the amounts for which the surcharge is collected.

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They should also notify Visa and their acquirer of their decision to charge credit card surcharge a month before they begin to levy the surcharge. These rules vary from State to State, and the business is free to choose which brands of its outlet it wants to keep the credit card surcharge.

Clear the confusions about the issue

A more detailed and clear understanding of this topic will be offered at a webinar that is being organized by Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance. Ray Graber, a highly experienced professional in the payment industry, who brings deep and profound understanding of the way banking and finance converge with technology, will be the speaker at this webinar.

Please register for this webinar by visiting What are the Stipulations for Compliance

Clarifying the important issues relating to credit card surcharging

Ray Graber will offer clarity on the changes in the rules and will explain who benefits from the changes, and how these changes are going to affect the retailers and customers. He will explain the perils of an uninformed reaction to surcharging by end-user organizations. He will show why it is important to first look at the big picture of credit card surcharging, since end-users should also educate suppliers about the economics of card acceptance, pointing out the savings possible and other benefits. Suppliers should not be adding a surcharge when they are reaping the rewards. Ray will explain how they might overlook the benefits of card acceptance, as well as the cost of other payment methods like checks and cash.

Being of high value and importance to every level of employee who works in the credit card industry, such as financial officers, small business owners, corporate risk officers, internal auditors, operational risk managers, credit card program administrators, CPA’s and attorneys and legal staff; this session will cover the following areas:

  • What changed in the rules?
  • Why did it change?
  • What rules apply to surcharge?
  • Survey results
  • Who may benefit?
  • Will this change anything?