Latest Accounting News
Hot Issues
Record low invoice values ‘reveal inflation sting’
A 2023 Advent Calendar for our clients
Average refund plummets by $580, total payout down $5.4bn
FBT – Christmas Parties and Taxi Fare/Rideshare
Annual wage growth surges to 14-year high of 4%
Is My Organisation Exempt From the Spam Act?
Employee Christmas Parties and Gifts – Any FBT?
Most Expensive Wars In History
Australian Taxation Office (ATO) motor vehicle data matching program extended
Directors on the hook for cyber security, ASIC warns
I am making a profit but where does all the cash go?
Using the cents per kilometre method for claiming car expenses
Scams by numbers - 2022–23 scam data is now available
Completing the Sale of a Business
Business owners are seeking exits without a plan, survey finds
Most powerful countries throughout time.
Super tax concession changes: consultation
ATO interest charges soar to highest level since GFC
TOP 5 CHALLENGES FOR FAMILY BUSINESSES
ATO linking system takes giant stride into business
Cyber threats facing small to medium-sized businesses (SMBs)
Most powerful LEADERS of All Time
How Do I Respond to an Allegation of Trade Mark Infringement?
$20k instant asset write-off to get 1-year extension
Contractor payments (TPAR) are increasingly on the ATO’s radar
Superannuation and independent contractors: fresh Full Federal Court guidance
Intergenerational Report 2023
Property investors beware: new data matching program
When will we learn to protect ourselves from ourselves?
Federal Government toughens up employment laws.
Articles archive
Quarter 3 July - September 2023
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 2 April - June 2007
Quarter 2 April - June 2006
Quarter 3 of 2012
Articles
Financially literate bosses?
Accountants relish providing financial advice
Securely transfer your personal and business information over the Internet
1 July 2012 Superannuation Reminder
ATO targets disclosure of foreign sources of income.
Trustee Resolutions - Family Trusts
Family Trusts - Children 18 this year?
Financially literate bosses?

The increasing complexity of accounting standards is making it more difficult for company directors to acquire the level of knowledge required to sign off ...


... on financial accounts, according to an inaugural survey of directors’ financial literacy.

The Financial Reporting Council (FRC) this week released the results of its survey on the literacy of Australian company directors, compiling results from 385 respondents including directors and financial professionals.

In some observations accompanying the report, the FRC notes that although the responses were diverse, “almost all the respondents acknowledged there were issues and challenges for directors in acquiring and maintaining the level of financial literacy” they needed for the role.

Directors generally rated their personal level of financial literacy higher than their fellow directors, while accounting professionals surveyed generally rated directors “at notably lower levels” than the directors themselves.
 
Task-force talk

Kevin Lewis, the chair of the FRC Board Education Task Force, said many respondents had mentioned the need for more financial education for directors, without realising that there was already “a lot out there in this regard.”

“This tells us that the providers of those services could probably do a little more about marketing them,” Lewis said in a telephone interview.

“The suggestion is that ASIC, for example, could have a central page on its site where the different training organisations might be listed.”


The report makes a number of suggestions on improving directors’ financial literacy, including:

  • verifying the financial credentials of directors as part of the recruitment process and arranging for any additional training required.
  • a briefing from auditors on accounting policies as part of directors’ inductions.
  • Periodic workshops on specific accounting issues.

Many respondents suggested a system of compulsory accreditation for directors requiring them to have a level of financial literacy and compulsory continuing professional development, although the FRC said it saw “major practical difficulties” in implementing these suggestions.

“The FRC does not believe that a one-size-fits-all approach would work, given the different expectations of directors,” the report says.

Lewis said the FCR had written to many organisations, such as the ASX, the professional accounting bodies and director’s organisations, informing them of the results of the survey.

 

 

Lachlan Colquhoun



30th-September-2012

Liability limited by a scheme approved under Professional Standards Legislation