Accountants will not get lower rate under U.S. tax bill
Accounting firms will not benefit from the lower 25 percent tax rate under the tax reform bill, which was passed by the United States House of Representatives on 16 November, Accounting Today reported. According to Brent Lipschultz, Tax Partner at PwC’s personal financial services practice in New York, service industries will not get the benefit of the lower rate despite service industries comprising the majority of U.S.’s gross domestic product. “This was just a way to appease the small business group out there. In general, partners at accounting firms will not get the benefit of the lower rate,” he added. The benefit for pass-through service businesses is not applicable for individuals with incomes above US$75,000 and couples with combined earnings of US$150,000 a year.
South African mid-tiers firms merge
BDO will take over Grant Thornton’s offices in Cape Town and Port Elizabeth starting on 1 March 2018, reported Economia this month. The process will bring 413 new staff into BDO, including 35 partners and directors, and will raise the firm’s total South African workforce to more than 1,000. “Critical to this merger is our ability to scale up and to leverage the opportunities created by the changes in the auditing profession, including the introduction of mandatory audit firm rotation,” said Mark Stewart, Chief Executive Officer of BDO South Africa.
China’s statistics bureau to take control of provincial GDP accounting to combat fraud
Regional-level data collection in China will be taken over by the National Bureau of Statistics starting in 2019, reported the South China Morning Post. Following criticism that the output of the nation’s provinces has long exceeded the official figure for the country as a total, the change is expected to result in significant reduction in the discrepancy between national and regional gross domestic data, said Li Xiaochao, the bureau’s deputy head. The country has taken steps to unify the accounting systems between national and local authorities, with increased inspections of potentially fraudulent data.
U.K. calls for quality reports by SMEs
The United Kingdom’s Financial Reporting Council has taken a “step-change in the quality of reporting by smaller companies” in areas of shareholder concern, reported the Financial Times. The disciplinary body has made plans to write to 40 companies before their year-end to review two specific accounting disclosure areas of their next published reports. It wants “companies to tailor accounting policies appropriately and consider whether new policy disclosures are required for large and unusual transactions.” The reviews will cover the ways companies present their strategic report and alternative performance measures, accounting policies, cash flow statements, tax and pensions.