News in Brief - 30 July

NAO saved #1bn

The National Audit Office has saved taxpayers more than #1bn over the last three years, NAO chief Sir John Bourn said in his annual report released today. Over the last year, the NAO had saved taxpayers #7 for every #1 spent on it and certified #560bn of spending and revenue. Bourn said the NAO was now co-ordinating work better with other public watchdogs like the Audit Commission.

Reuters restates Reuters Holdings restated its 1997 figures in last week’s 1998 interim statement, following discussions with the Financial Reporting Review Panel. In last year’s annual report, the information and news agency voluntarily adopted the treatments set out by FRS 10 on goodwill and intangible assets. But the FRRP was concerned that Reuters showed its goodwill amortisation charge as a separate item below the operating profit sub-total. The panel ruled the charge should have been classified as an operating charge and deducted before the operating profit was calculated. The #51m charge meant 1997’s operating profit was restated as #541m on revenues of #2,882m. Under the new format, the 1998 interim statement showed profits up 4% to #278m in the six months to 30 June.

Institutes advise on euro The government’s euro preparations unit has asked UK accountancy bodies how to get ready for the launch of the euro in January – despite the UK’s decision not to join yet. A unit report revealed a committee had been set up ‘to help co-ordinate activity and provide information to support accountants in helping business to prepare’.

Small PLCs’ profits down Over two-thirds of recent UK profit warnings issued in the second quarter came from smaller quoted companies according to Ernst & Young research. E&Y’s quarterly business survey reveals the overall number of profit warnings fell from 88 to 75. But the total number of profit warnings issued by small quoted companies – those with a turnover of up to #50m – rose from 28% to 41%.

75% of firms ignore bug Just 25% of UK companies mentioned their plans to deal with the ‘millennium bomb’ in their annual reports and those that did appeared too optimistic, according to Edinburgh-based corporate monitor Company Reporting. For the companies which published year-2000 details over the last year, Company Reporting found only about half gave the total cost. And only a third of those disclosed how they were accounting for the costs in their annual reports.

EC measures up Irish tax The European Commission plans to send a series of recommendations to the Irish government on the measures needed to put its corporate tax regime in line with EU state aid rules. The measures cover the preferential tax regimes in the International Financial Service Centre in Dublin and the Shannon Customs-free airport zone; and the 10% rate for the manufacturing sector, the commission said.

First FSA injunction The Financial Services Authority has issued its first injunction against unauthorised financial services providers. Doreen and John Steggals, a married couple from Derby running a partnership called Moorside Accountancy Services, have been told not to solicit or accept any deposits or dispose of any assets while the suspected contraventions are investigated.