Tag Archives: Audit

Swan promises rigorous audit of election policies

Updated February 22, 2013 09:08:51

The Parliamentary Budget Office will be required to release a post-election audit of all election commitments within a month of polling day under changes announced by Treasurer Wayne Swan today.

In a speech to an Australian Business Economists forum this morning, Mr Swan has also promised to release a preliminary budget outcome for the current financial year well before the September 14 election.

Amid an increasingly personal debate with the Coalition over economic credibility, Mr Swan has committed to a funding boost for the Parliamentary Budget Office (PBO) to ensure it has the resources needed to prepare rigorous policy costings in the lead-up to the election.

“Transparency would be further enhanced if the PBO were to prepare a post-election audit of all political parties, publishing full costings of their election commitments and their budget bottom line 30 days after an election,” he said.

“We will introduce legislation for consideration by the Parliament to enable this reform.

“This will remove the capacity of any political party to try to mislead the Australian people and punish those that do.

“It will avoid a situation we saw last election, where the Liberal Party thought they could con the Australian people.

“As a result of the reforms I am announcing, their $11 billion black hole in the budget bottom line would have been uncovered regardless of the election outcome.”

After the 2010 election, Treasury analysis revealed a multi-billion-dollar shortfall in the Coalition’s election costings, although the Opposition described the figures as a “difference of opinion”.

The analysis was only made public because of the post-election negotiations between the independent MPs and the major parties.

Shadow treasurer Joe Hockey has welcomed Mr Swan’s move, saying the Coalition strongly supports the PBO.

“I cannot believe my luck in Wayne Swan calling for sunshine on budget numbers,” he said.

“I mean, he is just the gift that keeps giving in this regard.

“Every single number from the mining tax and the carbon tax through to the budget surplus that he claimed he was going to deliver, every number he’s got wrong and transparency only helps the Coalition.

“It seems as though Wayne Swan is actually trying to get more prepared for opposition than he is actually running the country. I mean, he’s almost declared the innings closed on Labor by going down this path.”

The Coalition has said it would not be able to finalise its policy costings for the 2013 election until the Pre-election Fiscal Outlook (PEFO) is released, which will occur after the official campaign begins in August.

Mr Swan has today pledged to release a preliminary budget outcome for the 2012-13 financial year as soon as he is given a “reliable figure”.

“Treasury and Finance officials last week were clear that a reliable estimate of the underlying cash balance could be made well before the election and we commit to releasing them,” he said.

“This means that the 2012-13 outcome of the underlying cash balance – the most important budget aggregate – will be there for everyone to see.

“There will be no fiscal surprises after the election.”

Both the Coalition and Labor have indicated the economy will be a key focus of its election pitch to voters, although the Government is still dealing with the fallout of walking away from its promise to deliver a surplus this financial year.

It is also coming under pressure to explain how it will pay for signature policies such as the National Disability Insurance Scheme and the overhaul of school funding.

“Inevitably, these reforms will involve very difficult decisions, but they will always be guided by our Labor values,” Mr Swan said.

Topics: federal-government, government-and-politics, budget, business-economics-and-finance, australia

First posted February 22, 2013 06:18:50

Company audit standards ‘disappointing’

Posted December 04, 2012 11:03:43

The corporate watchdog has slammed the audit industry, saying almost a fifth of reports were deficient.

The Australian Securities and Investments Commission conducted an 18-month audit of auditors, and described the results as “disappointing”.

ASIC found, of the 20 companies it inspected, 18 per cent of the 602 audit areas reviewed did not perform all the procedures necessary to reasonably ensure that the financial report being audited was not materially misstated.

The watchdog says that is significantly worse than the 14 per cent it recorded in its investigation during the previous 18 months.

ASIC’s chairman, Greg Medcraft, says the results simply are not good enough for an industry relied on by everyone else involved in financial markets or corporate transactions.

“Auditors are gatekeepers that play a critical role in ensuring that Australian investors can be confident and informed,” he noted in the report.”

“These results are disappointing. Audit firms need to increase their efforts to improve audit quality and the consistency of audit execution.”

ASIC says auditors need to obtain more evidence of companies’ financial position, exercise a higher degree of scepticism about information provided by the audited company, and reduce their reliance on the work of other auditors and experts.

Topics: business-economics-and-finance, accounting, corporate-governance, regulation, australia

Samsung audit finds China issues

Samsung factory Samsung has asked its suppliers to adopt new hiring process with immediate effect Samsung says an audit of 105 of its suppliers in China has identified “several instances of inadequate practices at the facilities”.


These included overtime in excess of local laws as well as fines for being late or absent from work.


However, it found no evidence of under-age workers at any of the suppliers.


The audit followed a report by China Labor Watch which alleged that it had evidence of long working hours and under-age workers.


“Samsung did not identify any instance of child labour during the audits after reviewing HR records of all workers aged below 18 and conducting face-to-face ID checks,” the company said in statement.


The South Korean manufacturer said that it had asked all its suppliers to adopt a new hiring process immediately to address the problems identified.


It said that among other things, it had asked the suppliers to develop a longer term plan to resolve working hour practices by the end of this year and also to correct irregularities in labour contracts.


Samsung said it was reviewing practices at another 144 of its suppliers in China.

Corrective measures

China Labor Watch (CLW), a New York-based campaign group, has published two reports about alleged breach of labour laws at factories of Samsung and its suppliers in China.

Continue reading the main story
Except the overtime issue, violations covered in the report are not in line with our knowledge”

End Quote Samsung Electronics The first, published in August, alleged that it had found seven children – all of them are under the age of 16 – working at a factory of Samsung’s supplier HEG Electronics.


Samsung had carried out an audit of that factory and said it did not find any evidence of child labour.


It was after that report Samsung announced that it would conduct an audit of 249 suppliers in China.


But just as Samsung promised to carry out the checks at its suppliers, CLW published another report alleging “illegal and inhumane violations” at eight Samsung factories in China.


CLW said it had found evidence of “forced and excessive overtime”, “extensive labour contract violations”, “abuse of underage workers”, “lack of worker safety” and “severe discrimination based on age, gender, and individual characteristics unrelated to the job” among other breaches.


Samsung said that it had conducted regular checks as well as unannounced inspections of all its factories in China in October.


“Except the overtime issue, violations covered in the report are not in line with our knowledge,” Samsung said.


It added that it would correct its working hours practices and meet the local guidelines by the end of 2014.

UAE to chair Supreme Audit Institutions

Abu Dhabi: The Governing Board of the International Organisation of Supreme Audit Institutions (INTOSAI) has approved the UAE candidature to host the INCOSAI XXII Congress to be held in 2016.

The approval of the candidature was decided during the 63rd Meeting of the INTOSAI Governing Board which took place in China from November 19-22. The meeting was attended by Dr. Harib Al Amimi, President of State Audit Institution.

The INTOSAI Governing Board has unanimously approved the UAE SAI to host the INCOSAI XXII Congress to be held in 2016. The UAE, represented by the SAI President, will chair the Governing Board of INTOSAI during the period 2016-2019.

Dr. Harib said that “This achievement is an important event in the historical achievements of the UAE in the International forums. It is considered recognition of the distinctive position and professional status achieved by the SAI during the previous stage which enabled it to host the INCOSAI XXII International Congress to be held in 2016.”

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Moreover, the professional efforts and works exerted by different levels in the SAI, whether in the daily work or participation in international and regional forums, and the professional and developed level of the UAE Government and people were the motivation of this successful achievement such as hosting the 3rd EUROSAI-ARABOSAI conference held during the last year.

The SAI President concluded that he is confident that the UAE SAI will best benefit from all capabilities to make such distinctive event one of the other events hosted successfully by the UAE. The UAE Government has distinguished itself by the regulation and preparation of these events and forums.

It is worth mentioning that the INTOSAI is considered the second largest organisation in the world and it includes 190 countries represented by the supreme audit institutions. INTOSAI comprises the General Secretariat, Governing Board, Congress as well as Seven Regional Working Groups that cover all continents.

The main activities of the INTOSAI are to enhance the level of audit work in the government sector, build capacities of supreme audit institutions and develop the overall framework of audit standards in order to support accountability and transparency principles in managing public funds.

Malaysian regulators find ‘issues’ in AirAsia audit

Posted November 23, 2012 17:39:24

Top budget airline AirAsia has had its right-to-fly extended by six months rather than the standard two years after an audit by Malaysian regulators found “some issues”, an official said Friday.

The government official says the department of civil aviation had decided to extend the low-cost carrier’s air operator’s certificate until March 31 next year, at which point it will need to reapply.

The certificates, which allow carriers to use aircraft for commercial purposes, are usually granted for two years.

“The department already audited AirAsia, and they only approved six months for AirAsia,” the official says.

“AirAsia needs to apply again for renewal… next year,” he added.

The official says the carrier, Asia’s largest low-cost carrier by fleet size, faced “some issues… that have been found” but did not elaborate further.

Local daily SunBiz reported on Friday, quoting sources, that AirAsia had failed to meet regulatory standards.

The daily says an audit showed “shortcomings in AirAsia’s flight operations procedures and practices, including flawed communications between flight operations and pilots, an outdated manual and flight operations not in keeping with the manual”.

SunBiz also reported AirAsia’s head of flight operations had been removed from their post and replaced.

AirAsia did not immediately return requests for comment.

“The fact that they have not grounded AirAsia aircraft shows that it’s not a serious safety issue, but this action still serves as a warning,” a source told SunBiz.
Rapidly expanding AirAsia has become one of the airline industry’s biggest success stories, rivalling national carrier Malaysia Airlines, which has been struggling to get out of the red.

Head Tony Fernandes acquired the then-failing airline a decade ago. He has set up subsidiary budget carriers in Indonesia, the Philippines, Thailand and Japan.

AFP

Topics: air-transport, malaysia, asia

Corporate entities issued audit notices

KARACHI: Tax departments have issued audit notices to corporate entities, which were selected through parametric computer ballot for the tax year 2011 conducted by the Federal Board of Revenue (FBR), said officials on Monday.

“Notices for the audit have been issued to companies that were selected through computer balloting,” said a tax officer on the condition of anonymity.The FBR on November 13 conducted parametric computer balloting and selected 1,217 corporate cases and 8,523 non-corporate cases and individuals for audit under Section 214C of the Income Tax Ordinance, 2001, Section 73B of the Sales Tax Act, 1990 and Section 42B of the Federal Excise Act 2005.

Tax officials, however, are not hopeful of big revenue recovery through this audit exercise because most of the corporate entities had been audited last year and recoveries had been made. “There may be nominal recovery through this audit exercise as the tax departments had completed 80-85 percent audit of companies registered with the tax departments in Karachi,” said the tax officer.

The tax departments in Karachi, including the Large Taxpayers Unit and Regional Tax Office have conducted audit of the corporate entities for the tax year 2011 through manual selection criteria, which was restricted by the court of law, instructing the tax officials to only audit those companies, which were selected by the FBR through computer balloting.

“The tax authorities will avoid re-auditing those cases, which had already been audited through manual selection,” said the tax officer.The manual selection of audit by the FBR officials had been contested by the tax practitioners, saying that the audit could only be conducted through the selection of computer balloting.

Munawar Hassan Shaikh, president of the Karachi Tax Bar Association (KTBA), said that the audit through manual selection criteria is against the law. “We will urge the FBR to drop the cases for audit that were selected manually for the tax year 2011,” he added. —Shahnawaz Akhter

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FBR selects 9,740 cases for audit


ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday selected 9,740 cases for audit through parametric computer balloting, said an official.


The FBR selected 1,217 corporate taxpayers and 8,523 non-corporate taxpayers for audit in income tax, sales tax and federal excise duty for the tax year 2011, said official.


The FBR conducted computer ballot for selection of audit cases at the FBR House, which was made on the basis of various risk parameters developed after consultation with all the stakeholders.


Ijaz Hussain, Member (Inland Revenue), while addressing the audience said that the revenue body has ensured transparency in the process of selection of cases for audit.


The list of cases selected for audit has been placed on the FBR’s website showing taxpayers ‘National Tax Number only without displaying their names.


He said that the audit notices issued by the commissioners in the Large Taxpayers Unit (LTUs) and Regional Tax Offices (RTOs) for the tax year 2011 were issued without the approval of the tax authorities.


Responding to various queries of the tax bar associations and chambers, Hussain said that the audit notices already issued for the tax year 2011 by the field formations are without approval of the FBR.


Only cases selected for audit through computer balloting would be considered for the tax year 2011, he said.


“We have to look into the cases selected directly by the commissioners in the field formations,” said Hussain.


Mustafa Ashraf, FBR Member Taxpayers Audit, while welcoming the participants said that of 22,204 returns received from the corporate sector for the tax year 2011, a total of 1,217 cases have been selected for audit.


Of 519,974 returns filed by the non-corporate persons, a total of 8,523 cases were selected for audit, while 494 Presumptive Tax Regime (PTR) cases have been excluded from the total returns of 22,204 filed for the corporate sector, he added. The cases of Presumptive Tax Regime and salaried individuals are not made part of the computer ballot, he said, adding that the Presumptive Tax Regime cases having other sources of income are made part of the balloting.


The FBR has also timely placed the list of taxpayers, their national tax numbers (NTNs) on the FBR website duly signed by the FBR Member Audit; FBR Member Inland Revenue and Chief Executive Pakistan Revenue Automation Limited (PRAL).


The lists of the NTNs have been placed in ascending order so that the taxpayers can easily check whether their cases have been selected for audit or not, he said.


About the parameters applied for selection of cases for the audit, the FBR Member Taxpayer Audit said that the parameters have been shared with the stakeholders, including Pakistan Tax Bar Association, field formations and audit teams of the revenue body. The FBR has devised the parameters at the board level.


These parameters would be changed every year in view of the risk factors. The parameters of the non-corporate sector are slightly different from the parameters set for the corporate sector, he said.


The FBR Member Taxpayers Audit said that the revenue body has conducted computer balloting earlier this year to provide sufficient time to the field formations for timely completion of tax assessments. This would ensure recovery of the unpaid amount of taxes before June 30, 2013. Taking into account the issues of capacity of the workforce in the field formations, the FBR has selected low percentage of taxpayers for audit.


This would also not overburden the tax officials, while conducting audit but would ensure quality audit.

Bank of Korea chief’s comments at parliamentary audit

Tuesday, 09 October 2012 11:10 Posted by Shoaib-ur-Rehman Siddiqui

central-bank SEOUL: Following are key remarks from Bank of Korea Governor Kim Choong-soo at a parliamentary auditing session before lawmakers, translated by Reuters:

ON EXPIRATION OF CURRENCY SWAP EXTENSION WITH JAPAN:

“The decision was made based on economic factors, rather than political ones.”

“The decision is expected to have little effect on the market.”

LONG-TERM TREASURY BOND YIELDS

“There are reasons inside and outside the country that have been attributed to long-term treasury yields falling below the base rate. Internally, yields were pushed down because of hopes of a cut in interest rates. And from an offshore point of view, foreigners seem to believe investing in South Korean bonds is favourable.

We are keeping a close eye on the issue.”

Force field: PAC slams audit dept for protecting the corrupt

Audit object­ions involv­ing Rs295m were not brough­t to body’s knowle­dge. Audit objections involving Rs295m were not brought to body’s knowledge. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Once praised for its untiring work, the audit department came under criticism, for the first time, here on Tuesday when the Public Accounts Committee found that the department was working hand in glove with corrupt elements.

In a meeting convened to discuss financial irregularities in the Ministry of Housing and Works, PAC Chairman Nadeem Afzal Chan noted that the audit department quietly tabled four audit objections involving Rs295.5 million for settlement without bringing these to the knowledge of the PAC.

In terms of the audit department, PAC discusses only those audit objections which are highlighted in the reports while there are numerous objections which the audit department sends for settlement without any discussion. However, PAC has the authority to even discuss objections which are recommended for settlement. But it usually does not take up such objections for discussion.

“How the AGP (Auditor General of Pakistan) can recommend objections for settlement despite knowing that there were losses to the exchequer,” asked Chan while expressing displeasure.

PAC directed Housing Secretary Kamran Lashari to initiate an inquiry and fix responsibility on those who caused losses to the exchequer. It also gave directives to Additional Auditor General Abbas Naki to proceed against those officials who recommended objections for settlement.

Since Akhtar Buland Rana has been appointed as the Auditor General of Pakistan, the performance of the audit department has been questioned. Rana avoids PAC meetings and often sends his deputy Naki to participate in the proceedings.

Rana is currently abroad and will return on June 29, said Deputy Auditor General Tahir Saeed.

According to the details, Pakistan Housing Authority suffered a loss of Rs140.9 million after making changes to the designs of housing schemes, approved during the second tenure of Mian Nawaz Sharif from 1997 to 1999. PAC also asked why the projects were started without approval of PC-I of the schemes.

The audit department also quietly sought settlement of another case relating to Prime Minister’s Housing Scheme, launched by former prime minister Mian Nawaz Sharif in 1999, and involving Rs103.2 million.

Despite clear violation of public procurement rules that led to a loss of Rs52.4 million in two different cases in 2005, the audit department did not highlight the objections for discussions. “It seems that the audit department has special sympathy for the housing ministry,” observed the PAC chairman.

PAC also gave June 25 deadline to the housing ministry for submitting details of those bureaucrats, judges and generals who got two plots at the expense of taxpayers. It also asked the housing ministry to produce the file carrying the order to give two plots to the bureaucrats.

“After going through the record, PAC will give its decision on allocating two plots each to the officials,” said Chan.

Published in The Express Tribune, June 20th, 2012.

Financial discrepancy: Audit of Universal Service Fund demanded

Teleco­m operat­ors allege that fund is being used illega­lly for politi­cal gains. An official said the fund can be used at the discretion of the board, which owns the fund. PHOTO: FILE

KARACHI: 

It seems that no one can beat our bureaucrats when it comes to spending someone else’s money to appease the sitting government. Telecom operators’ apprehension about the misuse of their hard-earned money by Ministry of Information Technology (MoIT) is the latest attack on one of the highly taxed sectors of the economy.

Telecom companies contributed Rs117 billion, almost one-third of its revenues, to the national exchequer last year; it may have fallen short of the government’s expectations though as the latter, allegedly, spent Rs120 million out of a telecom fund for political gains.

MoIT has spent a huge amount out of the Universal Service Fund (USF) on projecting the achievements of the government in electronic media during last two months, stakeholders said in a written complaint to IT and Telecom Minister Raja Pervaiz Ashraf.

They also asked Ashraf to conduct an inquiry about the illegal use of USF and take action against those responsible for the same; a source familiar with the matter told The Express Tribune.

Telecom operators – each of whom contributes 1.5% of their gross income to USF – are the sole sponsor of the company. USF is meant for the expansion of telecom network to the remote areas – which do not make a business case for telecos.

The aforesaid amount, according to the source, was spent without any budget allocation and approval of the USF’s board of directors. Competitive bidding procedure and Public Procurement Rules were not followed either while awarding the contract to a single ad agency, the source added. This act is contrary to the Public Procurement Regulatory Authority Ordinance, 2002; the source said.

The money spent on media campaign, the source said, was in violation of section 33 (B) (2) of Pakistan Telecommunication (Re-organization) (Amendment) Act, 2005, which states:

“The USF shall be utilised exclusively for providing access to telecommunication services to people in the un-served, under-served, rural and remote areas and other expenditure to be made and incurred by the Federal Government in managing USF.”

The USF’s last year’s advertising budget was about Rs5 to 6 million, the source said, but this year they spent Rs120 million and that, too, on political campaign – causing uneasiness among telecos whose money was wasted in media campaign for political purposes.

USF currently has about Rs30 billion in its account; the telecos annual contribution to the fund is about Rs3 to 4 billion, the source said. This money – which would be needed for the expansion of telecom network to remote locations following the 3G auction – is likely to be used for political campaigns as general elections are nearing, the source said.

Another telecom source, who wished not to be named, also confirmed that the money spent on the media campaign was not approved by the board. He, however, said USF has about Rs40 to Rs45 billion its account while the money used in the ad campaign was higher than Rs120 million.

Despite several attempts – via phone and email – to contact the minister; secretary and other MoIT officials, no contact could be established to find out if any inquiry has been launched in this regard.

However, a government official – when contacted on his cell phone – said the media campaign was approved by the Prime Minister, then chairman of USF board.

The chairman can’t approve this without the approval of the board, the official said, requesting he should not be quoted. Representatives of the telecom sector are also on board, he said, they were part of the decision.

The use of funds depends upon the board that owns the fund, the official said, adding if the board desires to use it for advertising, it can. However, it is done in accord with the rules and regulations governing USF; he added.

The official refused to talk about the amount used for the media campaign, saying it was not in his knowledge.

Published in The Express Tribune, May 17th, 2012.