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Accounting news

January 2018



KPMG-Gupta scandal probe nearly complete

The South African Independent Regulatory Board for Auditors’ (IRBA) investigation into KPMG is progressing “satisfactorily” and nearing completion, says Bernard Agulhas, Chief Executive Officer of the audit regulator, reported Reuters. He added that the IRBA will continue to engage closely with the firm to obtain the necessary outstanding information. The investigation follows the Big Four firm being accused on turning a blind eye to questionable business practices conducted by their clients, companies owned by the controversial Gupta family. KPMG forced its South African leadership to resign after it emerged the auditors allowed the Guptas to write off 30 million rand (HK$1.9 million) in wedding costs as business expenses. 



Apple owes £137 million in back taxes

An “extensive audit” by the United Kingdom’s Her Majesty’s Revenue and Customs department revealed that tech giant Apple owed £137 million in back taxes – a sum that was described as a corporate income tax adjustment covering the prior periods until September 2015, reported Accountancy Age. Apple’s Europe branch has agreed to pay the sum in addition to £57 million in corporate taxes for the period ending April 2017. “Apple pays all that we owe according to tax laws and local customs in the counties where we operate,” a spokesperson for Apple said. 



IFRS for weed still hazy

A biological asset rule under International Financial Reporting Standards may cause overoptimistic values being pre-booked into financial statements by publicly traded licensed producers in Canada’s fast-growing marijuana industry. The related accounting guidelines require agriculture companies to put a value on crops as they grow, meaning a grower could report net income in the quarter that they grew or harvested marijuana, but this figure may prove inflated if the bud sells later for less in the country’s nascent weed sector. Canada will legalize cannabis for recreational use effective July 2018. 


MAS head sceptical over central banks issuing digital currencies

Amid some European central banks considering creating digital currencies, Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) urged for caution on such action. In an interview with the Financial Times, Menon questions the meaning behind central banks issuing digital currency to the public. “It means that you and I will have cryptocurrency deposits in the cloud with a private key that’s issued by the central bank. It’s the central bank’s liability directly to the individual... If there’s any sense of nervousness about the banks, you will have a bank run; everybody is going to go into the central bank [with their deposits]... And, if people placed their deposits with central banks, who’s going to extend credit?” Menon believes a bitcoin crash could “potentially cast a larger shadow over FinTech and innovation.”