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Demand rises for accountants - Jamaica an IFRS case study
Gleaner published: Thursday | November 9, 2006
Raphael Gordon, Guest Writer
Dennis Brown (second left), council member of the Institute of Chartered Accountants of Jamaica, participates with other unnamed delegates at the 23rd session of the United Nations Conference on Trade And Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). Jamaica was one of five countries selected by UNCTAD for a case study on the successful implementation of International Financial Reporting Standards (IFRS) at the ISAR Session held October 9-12 in Geneva, Switzerland. The other four countries being studied are Brazil, Germany, India and Kenya. - Contributed
The developments in the accountancy profession over the past few years have resulted in significant focus on practitioners.
New financial reporting standards, especially International Financial Reporting Standards (IFRS), have extended disclosure requirements. IFRS are complex and require interpretations to arrive at their practical applications.
Auditors appear to be the persons who are expected to be fully up to date with the changes and to assist clients in attaining compliance.
Competition for qualified accountants has increased because of increased demand for them worldwide. Shortages exist in places like China, United Kingdom, United States of America, and Canada.
Accountancy firms are working hard to retain key talent and this is proving to be very difficult.
Average salaries
A recent survey conducted by recruitment consultants, Morgan McKinley, found that newly-qualified accountants, working for investment banks in financial control, attracted average salaries of £60,000. The salaries for internal audit averaged £54,000 per annum.
Bonuses of up to 30 per cent of salary were also available for those working for banks. As a consequence, Jamaica is competing with the rest of the world for qualified accountants. However, trainees are soon lost to firms offering alternative employment in Jamaica or overseas.
Improved compensation has to be paid to retain staff, hence, the cost of providing professional services increases. Sometimes, the persons involved are still relatively low on their learning curve. Therefore, a move to another job may retard such persons' professional development. In the audit firms, these individuals learn to operate in a team and are guided by partners and managers in the performance of their duties.
This guidance may not be available in other jobs, as the accountant may have no one above him to consult, hence, the significant reliance on auditors to give advice.
Resistance to fee increases
Ironically, there is resistance to fee increases at a time when more work is required to be done and professional risk increases.
International Standards on Auditing (ISA) are being revised to make certain audit procedures compulsory.
These changes will extend the audit work required to be done, hence, further increase in costs. These changes are being made to align ISA with the new audit report, which is effective for reports issued on or after December 31, 2006. Early adoption of this standard is not permitted. This may be so because all the other ISA will have to be revised during 2006 to be aligned with the reporting requirements.
The implementation of, and amendments to, reporting under IFRS increased the cost of reporting by entities. The proposal that no new standard be issued with an effective date before December 31, 2009 is welcome news. This should provide reporting entities with a stable period when there should be very few changes in reporting financial information.
Raphael Gordon is the managing partner of KPMG in Jamaica and chairman of KPMG CARICOM.
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Taken from Wednesday Business, November 08, 2006
Gleaner published: Thursday | November 9, 2006
Raphael Gordon, Guest Writer
Dennis Brown (second left), council member of the Institute of Chartered Accountants of Jamaica, participates with other unnamed delegates at the 23rd session of the United Nations Conference on Trade And Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). Jamaica was one of five countries selected by UNCTAD for a case study on the successful implementation of International Financial Reporting Standards (IFRS) at the ISAR Session held October 9-12 in Geneva, Switzerland. The other four countries being studied are Brazil, Germany, India and Kenya. - Contributed
The developments in the accountancy profession over the past few years have resulted in significant focus on practitioners.
New financial reporting standards, especially International Financial Reporting Standards (IFRS), have extended disclosure requirements. IFRS are complex and require interpretations to arrive at their practical applications.
Auditors appear to be the persons who are expected to be fully up to date with the changes and to assist clients in attaining compliance.
Competition for qualified accountants has increased because of increased demand for them worldwide. Shortages exist in places like China, United Kingdom, United States of America, and Canada.
Accountancy firms are working hard to retain key talent and this is proving to be very difficult.
Average salaries
A recent survey conducted by recruitment consultants, Morgan McKinley, found that newly-qualified accountants, working for investment banks in financial control, attracted average salaries of £60,000. The salaries for internal audit averaged £54,000 per annum.
Bonuses of up to 30 per cent of salary were also available for those working for banks. As a consequence, Jamaica is competing with the rest of the world for qualified accountants. However, trainees are soon lost to firms offering alternative employment in Jamaica or overseas.
Improved compensation has to be paid to retain staff, hence, the cost of providing professional services increases. Sometimes, the persons involved are still relatively low on their learning curve. Therefore, a move to another job may retard such persons' professional development. In the audit firms, these individuals learn to operate in a team and are guided by partners and managers in the performance of their duties.
This guidance may not be available in other jobs, as the accountant may have no one above him to consult, hence, the significant reliance on auditors to give advice.
Resistance to fee increases
Ironically, there is resistance to fee increases at a time when more work is required to be done and professional risk increases.
International Standards on Auditing (ISA) are being revised to make certain audit procedures compulsory.
These changes will extend the audit work required to be done, hence, further increase in costs. These changes are being made to align ISA with the new audit report, which is effective for reports issued on or after December 31, 2006. Early adoption of this standard is not permitted. This may be so because all the other ISA will have to be revised during 2006 to be aligned with the reporting requirements.
The implementation of, and amendments to, reporting under IFRS increased the cost of reporting by entities. The proposal that no new standard be issued with an effective date before December 31, 2009 is welcome news. This should provide reporting entities with a stable period when there should be very few changes in reporting financial information.
Raphael Gordon is the managing partner of KPMG in Jamaica and chairman of KPMG CARICOM.
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Taken from Wednesday Business, November 08, 2006
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