High-fliers weigh up the cost of ash grounding

The International Accounting Standards Board may now have to add the Almighty
to the list of those trying to block convergence of US and international
accounting rules.

The eruption of Icelandic volcano Eyjafjallajokull, a so-called act of God,
led to delayed meetings and hastily prepared agendas to be drawn up, leaving
board members forced to attend meetings via phone or video link or not at all.

Sir David Tweedie waited out the events in Hong Kong, attending meetings
while staffers in the UK warned that some convergence talks may be cancelled or
cut short. The delay is not believed to have any great impact on the overall
convergence timetable.

“Please accept our apologies for any inconvenience these changes may cause,”
the IASB said on its website.

It joined the Big Four audit firms which had staffers marooned across the
world. One PwC staff member took five trains from Portugal to arrive in London
after a holiday. About 500 staff from the firm are stranded in Europe, the
Middle East, Asia and the US.

Employees have been forced to rely on laptop and mobiles and have been
working out of local PwC or client offices.

“It’s unsettling for people to be away from their families and friends, so
we’re updating them regularly via our travel support line and email and where
possible organising alternative travel arrangements,” a PwC spokeswoman said.

KPMG has brought home 130 staff, but still has 120 unable to return to the UK
office. “They’re working from offices abroad, through the global network. You
can work from anywhere these days,” said a KPMG spokesman.

Alternatives to business travel, such as using video and audio conferencing
facilities have proved even more popular in the last week, and might well
convert more of the hardcore jet setters to use greener alternatives to
face-to-face meetings.

“We always ask our people to consider alternatives to business travel, such
as using video and audio conferencing facilities,” said Deloitte. “Clearly,
these options will be even more important over the coming days while there is
continued disruption to flight schedules.”

Another issue is how to deal with staff holidays. How long do you pay them

“For employers, this presents a big dilemma about whether to pay staff in
this situation. Had they gone there on business, it would be our responsibility,
but if it’s a holiday, it’s not their fault but it’s not ours either, so what do
we do?” said Barry Lewis, senior partner at Harris Lipman.

BDO is looking to pay out holidays until the end of the week as “special
leave”, but beyond that it’s unclear.

“Individuals who are on holiday will have the extra days certainly till the
end of this week granted as special leave. Where people have urgent requirements
to return for client related activities we are also looking at how we might
support them,” said a BDO spokesman.

And if any of the firms are considering the possibility of recouping any
costs for economic loss, they are likely to be low to nil, say insurers.

“Accountants are highly unlikely to have cover for this… it’s the vagaries of
being on the planet,” said Jane Howard, partner at professional services insurer
Reynolds Porter Chamberlain.

Business interruption cover sometimes comes under property insurance, but
this requires physical damage, not pure economic loss.

Howard said it is incorrect to believe that you cannot gain cover for acts of
God. Firms can access cover, but they don’t because the premiums are considered
too high.



Every now and then mother nature reminds us that we are not in control of
this planet. If the accounting industry wants to promote itself as a truly
global profession, it needs the tools to deal with this sort of occurrence.
Accounting professionals need to be able to work from wherever
they may be in the world. Although it’s hard to judge harshly an
accountant on holiday at the moment who simply wants to turn the phone off, and
enjoy the extended vacation.

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