US investors want pay and performance link

Most institutional investors believe there should be a stronger link between executive pay and performance at US companies, with 90% believing the current system has overpaid board members and 85% stating that it has damaged the image of corporate America, reported a survey by Watson Wyatt, the human capital consulting firm.… Read the rest

News in briefs …..

A European Group of Auditors’ Oversight Bodies has been set up by the European Commission. The group will ensure effective coordination of new public oversight systems of statutory auditors and audit firms within the European Union and may also provide technical input to the preparation of the Commission implement the 8th company law directive covering audits.… Read the rest

Australian pay vote: improvement needed

There were 43 Australian listed companies that failed to notify shareholders about the remuneration report vote that was introduced as part of other company law changes and applied to most firms for the first time in the 2005 AGM season, according to the Australian Securities & Investments Commission (ASIC).… Read the rest

Fund managers take note of IFRS

A survey of 75 fund managers has revealed that this year’s adoption of International Financial Reporting Standards (IFRS) has already begun to affect investment decisions according to PricewaterhouseCoopers (PwC). 

The results show that 47% said information reported under IFRS had direct influence on decisions, 29% that it had influenced their decisions to move their investment from a company, and 21% that it had been a factor in their deciding not to invest.… Read the rest

APB defers revision of auditor’s report standard

The UK’s Auditing Practices Board (APB) has decided to defer its revision of the International Standard on Auditing (UK and Ireland) 700 (ISA 700) on the auditor’s report on financial statements, which it published for consultation in December 2004.

It believes that forthcoming changes to UK company law, the revision of the EU’s 8th directive on company law and ongoing work by the International Auditing and Assurance Standards Board on clarifying the wording of ISAs mean that it is not the right time to adopt the latest version of ISA 700, which would have been effective for reports dated on or after 31 December 2006, when further changes are likely to be necessary.… Read the rest

EU needs to meet challenge of IFRS consistency

European internal commissioner Charlie McCreevy recognised that the current early stages of adoption of International Financial Reporting standards (IFRS) raised challenges in application and interpretation speaking at a recent European Federation of Accountants’ seminar on IFRS.

In particular, he said there needed to be broader arrangements for consistent application at company level, and McCreevy mooted the idea of a temporary, informal roundtable to discuss this.… Read the rest