Bamboo Innovator

Korean accounting firms poised for seismic changes next year

Accounting firms poised for seismic changes next year

By Park Seung-cheol/ Lee Ga-yoon

2013.07.31

South Korea’s accounting industry is fussing over the largest-ever seismic changes slated for next year. Critical changes will all come next year: international audit standards will become effective; the period for audit firm rotation will approach on the annulment of the rule, under which businesses must replace an audit firm with another in six years; and an independent auditing committee will be given rights to pick audit firms.  Large accounting firms including Samil PwC, Deloitte Anjin, Samjong KPMG Advisory and Ernst & Young Korea are already in the cutthroat competition, believing the next year’s accounting firm selection will be the event that will reshape the market landscape. An official at Ernst & Young Korea noted, “accounting firms had enjoyed extra demand for consulting services with the introduction of the international financial reporting standards, but now failed to seek new breakthroughs to be in the doldrums over the last few years,” adding “the next year will be the cornerstone for accounting firms to get out of the hardships.”  The international audit standards call for a parent company’s auditor to hold responsibility for the audit results of its consolidated subsidiaries. Accounting firms project that the introduction of international audit standards will eventually make parent company and its subsidiaries have the same audit firm. In addition, it has been three years since Korea scrapped the rule, by which businesses are obliged to rotate their auditors every six years, in 2009. This is acting as another catalyst for fueling competition among accounting firms.

The benefits and perils of riding China’s coat-tails; Many Latin American nations have bet the mine on an economy that is now slowing

July 31, 2013 4:18 pm

The benefits and perils of riding China’s coat-tails

By David Pilling

Many Latin American nations have bet the mine on an economy that is now slowing

Few parts of the world have benefited as much from China’s rise as Latin America. In 1990, China was a lowly 17th on the list of destinations for Latin American exports. By 2011, it had become the number one export market for Brazil, Chile and Peru and number two for Argentina, Cuba, Uruguay, Colombia and Venezuela. Over that time, annual trade rose from an unremarkable $8bn to an irreplaceable $230bn. Chinese leaders predict it will reach $400bn by 2017. Read more of this post

Ex-courier lifts lid on theft and fraud in China’s logistics industry

Ex-courier lifts lid on theft and fraud in China’s logistics industry

Staff Reporter

2013-08-01

A retired courier said that it has become the norm for employees in China’s delivery services industry to steal or tamper with items trusted to them to sort and deliver, while couriers work with contacts to scam the recipients out of money, reports the Guangzhou Daily. The former courier, who recently retired from his position at the Guangzhou branch of Shanghai YTO Express (Logistics) — a leading player in the delivery services industry — said that many couriers steal parts of a parcel if its packaging is broken. He added that many would open and steal from parcels if they knew that the contents were items such as moon cakes, teas or fruit. He said that many in the industry would also take high-end electronic products such as iPhones if they had the chance, which they then would replace with a counterfeit item, repackaging the parcel before delivering it to the recipient. Read more of this post

Money Merry-Go-Round in North Korea

Money Merry-Go-Round in North Korea

Good luck finding a North Korean won in Pyongyang

By Giles Hewitt on 1:10 pm July 31, 2013.
Pyongyang. Chinese yuan, US dollars, euros and tea bags. Money can come in many forms in North Korea, but as a foreign visitor you’ll probably never even see a local banknote, let alone use one. Pretty much any hard currency is welcome in a country with anemic foreign reserves. Tourists, although few in number, represent a valuable cash source. For those who do choose to visit, every transaction — no matter how small — must be made in foreign exchange, further narrowing options in what is already among the most restrictive countries in the world. There are not many places to spend money in the capital Pyongyang. As a foreigner, the choice is reduced further by the need to find somewhere that takes foreign currency and — importantly — is capable of giving change. Read more of this post

China Owes Hollywood Millions After Halting Payment for Films; lack of profit has not deterred US studios from sending their films to China,

China Owes Hollywood Millions After Halting Payment for Films

By Agence France-Presse on 1:48 pm July 31, 2013.
Los Angeles. China has stopped paying Hollywood studios for its films in a dispute over a Chinese tax on movie profits, Hollywood trade papers reported Tuesday. Tens of millions of dollars in box office revenues are owed in arrears to the likes of Disney, Warner, Universal, Paramount, Fox and Sony, according to The Hollywood Reporter. The magazine said China’s state-owned movie distributor, China Film Group, owes more than $31 million to Warner for “Man of Steel,” $23 million to Sony for “Skyfall” and $23 million to Fox for “Life of Pi.” China stopped payment at the beginning of the year, when American studios took issue with a two percent value-added tax that the world’s most populous nation was levying on US films. Chinese authorities want the studios to pax them the tax, but the studios argue it violates a World Trade Organization agreement governing the film trade between the two countries. In the accord last year, heralded as historic by the United States, the two countries agreed that China could import 34 US blockbusters a year (up from 20) and studios’ revenue share from China was fixed at 25 percent (up from 13 to 17 percent). The Motion Picture Association of America (MPAA), which acts on behalf of studios’ interests, is negotiating with Chinese authorities, to resolve the tax dispute. In the meantime, lack of profit has not deterred US studios from sending their films to China, which currently has the world’s most dynamic movie market, in the aim of cementing a long-term foothold.

Overcapacity sends China’s steel sector into loss

Overcapacity sends China’s steel sector into loss

English.news.cn   2013-07-31

BEIJING, July 31 (Xinhua) — China’s iron and steel industry reported a loss of 699 million yuan (about 113 million U.S. dollars) in June, the first monthly deficit that the overcapacity-troubled industry has seen this year. For the first half, the profits of members of the China Iron and Steel Association (CISA) hit 2.27 billion yuan, with an average profit margin of 0.13 percent, the lowest among all industries, said the CISA on Wednesday. Steel prices have been dropping since February. At the end of June, the price of steel products fell 6.45 percent compared with the beginning of this year, and down 14.7 percent year on year, according to the CISA. Read more of this post

Chinese Venture Fundraising Hurt by Fears Over Economy

July 31, 2013, 5:42 a.m. ET

Chinese Venture Fundraising Hurt by Fears Over Economy

Economic Concerns Outweigh Renewed IPO Activity

SONJA CHEUNG

Venture capital fundraising in China slumped to a two-year low in the second quarter as concerns about the country’s slowing economy outweighed renewed activity in initial public offerings, according to data from Dow Jones VentureSource. IPOs of Beijing-based e-commerce company LightInTheBoxHolding Co. in the U.S., and of car dealership China Harmony AutoHolding Ltd. in Hong Kong in early June, failed to reignite interest in those investing in mainland VC funds, despite proof that fund managers are finding it slightly easier to off-load investments. Read more of this post

The world must learn to deal with failure; Regulators lack the wherewithal to try and eliminate the risk of collapse

July 30, 2013 4:11 pm

The world must learn to deal with the reality of failure

By John Kay

Regulators lack the wherewithal to try and eliminate the risk of collapse

Last week, the Financial Stability Boardidentified nine international insurance companies as GSifis. For those uninitiated in the acronyms beloved of the regulatory community, a GSifi is a global systemically important financial institution. Finding GSifis in the insurance sector is a solution in search of a problem. Having invented the concept of GSifi to describe too-big-to-fail banks, the world’s financial regulators are on the hunt for other businesses which can be treated in a similar way. Read more of this post

7-Eleven wizard, 80, to take on U.S.; With 50,000 global outlets, time said ripe to expand convenience store chain where it was born

7-Eleven wizard, 80, to take on U.S.

With 50,000 global outlets, time said ripe to expand convenience store chain where it was born

BY YUKI YAMAGUCHI

BLOOMBERG

JUL 30, 2013

Over the past 39 years, Toshifumi Suzuki has expanded 7-Eleven to 50,000 outlets, more than any other retail chain. Now, at the age of 80, he says he has no interest in retiring. He’s got too much work to do. “I’m not thinking about it at all yet,” said Suzuki, chief executive of Japan’s Seven & I Holdings Co., global owner of the home of the Slurpee. High on Suzuki’s to-do list is a renewed focus on the U.S., where the chain was founded 86 years ago when a Dallas ice maker began selling eggs, bread and milk. Suzuki opened Japan’s first 7-Eleven in Tokyo’s bayside Toyosu district in 1974 and built the brand into Japan’s biggest convenience store chain. Then in 1991, after 7-Eleven brand owner Southland Corp. filed for bankruptcy, he turned around and bought the mother company. Read more of this post

Luxottica Has Its Eyes on Brazil and Asia; Andrea Guerra, head of Luxottica Group, on leadership, listening, and competing for customers

July 30, 2013, 9:58 p.m. ET

Luxottica Has Its Eyes on Brazil and Asia

MANUELA MESCO

Andrea Guerra, head of Luxottica Group, on leadership, listening, and competing for customers.

The overall global luxury market may be cooling, but for sunglasses and eyewear in emerging markets, the future looks hot. That’s good news for Luxottica S.p.A.,LUX.MI +0.73% the world’s largest eyewear group. The Italian company, which owns iconic brands like Ray-Ban and holds licenses to produce eyewear for designer labels such as Burberry, Chanel and Armani, logged €7 billion ($9.29 billion) in sales last year and recently reported a 7% year-on-year increase for second-quarter revenue. Andrea Guerra, the company’s chief executive since 2004, has spearheaded an acquisition drive intended to establish Luxottica in new markets around the globe. Last year alone, it made four acquisitions, including Grupo Tecnol Ltda, a leading eyewear maker in Brazil, as well as retail chains in Spain, Portugal and Italy. Read more of this post

Korean President Park Geun-hye is backpedaling on her pledge to uproot unfair business practices by conglomerates and improve their corporate governance structure by limiting the power of owners

2013-07-29 17:54

President backpedals on chaebol reform

By Na Jeong-ju
President Park Geun-hye is backpedaling on her pledge to uproot unfair business practices by  conglomerates and improve their corporate governance structure by limiting the power of owners, critics say.
The administration has become soft-handed on inter-affiliate deals that have been abused by chaebol owners to expand their business empires. Tax officials have hinted at reducing the scope of audits into conglomerates.
The finance ministry is moving to ease business regulations in order to draw more investment from chaebol firms and create more jobs. These changes are in stark contrast to Park’s presidential campaign pledge — she vowed to achieve “economic democratization” by toughening punishment for violations committed by big businesses and ensuring fair competition between large and small firms. Read more of this post

What It Means When Charlatans Have Access to Our Leaders

07.30.2013 18:01

Closer Look: What It Means When Charlatans Have Access to Our Leaders

Government and business elites can preach materialism all they want, but when they take advice from frauds they’re showing how little faith they have

By staff reporter Wang Xiaoxiao

ang Lin with photos of some of the people he has advised

The name of a qigong master, Wang Lin, has become an Internet buzzword because he has high-powered followers and the public wonders why.

Wang, a 61-year-old native of the eastern province of Jiangxi, made his name in the late 1990s when qigong – an ancient admixture of breathing exercises and meditation – was a national fad, although he was able to keep a low profile. He claimed some unusual abilities: he said he treated various heads of state for their diseases and showed visitors how he could make a snake appear in an empty pot. Wang has garnered a circle of followers, and is continually referenced and visited by various celebrities and officials. Read more of this post

Private Investigators Tracking Fraud Face Risks in China

July 30, 2013, 7:30 p.m. ET

Private Investigators Face Risks in China

Detention of British Gumshoe Highlights Danger

JAMES T. AREDDY

SHANGHAI—The police detention this month of a British private investigator here amid a pharmaceutical bribery probe highlights the growing risks for private gumshoes tracking fraud in the world’s No. 2 economy. Shanghai police detained a prominent commercial sleuth, Briton Peter Humphrey of ChinaWhys Co., according to the British government. Authorities won’t say why he is being held, and he isn’t reachable. In China, a detained person isn’t necessarily a criminal suspect. Mr. Humphrey’s detention comes as Chinese officials investigate bribery allegations against U.K. drug maker GlaxoSmithKline PLC. GSK.LN -0.03% Glaxo is a longtime client of Mr. Humphrey, according to people familiar with the situation. It isn’t clear whether Glaxo is a current client. Glaxo has said Mr. Humphrey isn’t an employee and declined further comment. Read more of this post

Why is China auditing local government debt again?

Why is China auditing local government debt again?

by China Seminar on July 29, 2013

Here is what the FT says:

China will conduct an urgent audit of all government debt, underlining concerns over rising financial risks in the world’s second-biggest economy.

The National Audit Office said in a one-line statement on Sunday that it had been instructed by the state council, China’s cabinet, to come up with a tally of how much money is owed by all levels of government from villages up to central authorities.

So why do we ask the question in the title? Because this would be the third audit report on local government debt, only one month after the last report was published, and it comes much earlier than everyone expected, including the National Audit Office (NAO) itself. Two audits have been done on this subject so far. The first audit covering more than 3000 local governments was conducted from March to May in 2011 and the report was published in June 2011. Thesecond audit was done on a much smaller scale as it only included 36 local governments. It was done during November 2012 to February 2013 and a report was published on June 10^th, just a month ago. According to the information provided by the People’s Daily, the official newspaper of the Party (in Chinese, for English see the FT report), the third round of the audit was required by the State Council and it will start immediately on August 1^st. The NAO has called off other projects to focus on this one and many auditors were asked to cancel their holidays.  Read more of this post