Volkswagen to refit cars affected by emissions scandal

BERLIN, Sept 29 (Reuters) Volkswagen (VOWG_p.DE) said on Tuesday it will repair up to 11 million vehicles and overhaul its namesake brand following the scandal over its rigging of emissions tests.
New Chief Executive Matthias Mueller said the German carmaker would tell customers in the coming days they would need to have diesel vehicles with illegal software refitted, a move which some analysts have said could cost more than $6.5 billion. In Washington, U.S. lawmakers asked the automaker to turn over documents related to the scandal, including records concerning the development of a software program intended to defeat regulatory emissions tests.

In separate letters, leading Republicans and Democrats on the House Energy and Commerce Committee requested information from both Volkswagen and the U.S. Environmental Protection Agency as part of an investigation into the controversy. Europe’s biggest carmaker has admitted cheating in diesel emissions tests in the United States and Germany’s transport minister says it also manipulated them in Europe, where Volkswagen sells about 40 percent of its vehicles.

The company is under huge pressure to address a crisis that has wiped more than a third off its market value, sent shock waves through the global car market and could harm Germany’s economy. “We are facing a long trudge and a lot of hard work,” Mueller told a closed-door gathering of about 1,000 top managers at Volkswagen’s Wolfsburg headquarters late on Monday.
“We will only be able to make progress in steps and there will be setbacks,” he said, according to a text seen by Reuters.

Volkswagen did not say how the planned refit would make cars with the “cheat” software comply with regulations, or how this might affect vehicles’ mileage or efficiency, which are important considerations for customers. It said it would submit the details to Germany’s KBA watchdog next month. Manipulating emissions results allowed Volkswagen to keep down engine costs in a “clean diesel” strategy that was popular in Europe and at the heart of a drive to improve U.S. results.
Mueller was appointed CEO on Friday to replace Martin Winterkorn. German prosecutors said on Monday they were investigating Winterkorn over allegations of fraud.

EMBARRASSMENT
The crisis is an embarrassment for Germany, which has for years held up Volkswagen as a model of its engineering prowess and has lobbied against some tighter regulations on automakers. The German car industry employs more than 750,000 people and is a major source of export income. Economy Minister Sigmar Gabriel told reporters he was not worried about damage to the economy from Volkswagen’s problems, “at least, not if we deal with it sensibly.” There must be no “soft pedalling, no obfuscation and no covering-up” by Volkswagen, he added.

The KBA had set Volkswagen an Oct. 7 deadline for a plan to bring diesel emissions into line with the law. Investors are impatient for answers too. A survey of 62 institutions by investment banking advisory firm Evercore ISI found around two-thirds said it would not be possible to invest in Volkswagen over the next six months if costs, fines, legal and criminal proceedings were outstanding or inadequately quantified. VW’s brand image has also slumped this month, market researchers YouGov said, citing a survey of about 2,000 consumers.

Volkswagen said previously about 11 million vehicles were fitted with software capable of cheating emissions tests, including 5 million at its VW brand, 2.1 million at luxury brand Audi, 1.2 million at Skoda and 1.8 million light commercial vehicles. Refitting 11 million cars would be among the biggest recalls in history by a single automaker, similar in scale to Toyota Motor Corp’s (7203.T) 2009-2010 recall of more than 10 million vehicles over acceleration problems, though dwarfed by the number recalled by multiple carmakers due to faulty Takata Corp (7312.T) air bags. Volkswagen sold 10.1 million vehicles in the whole of 2014. The company said last week it would set aside 6.5 billion euros ($7.3 billion) to help cover the cost of the crisis. But analysts think that may not be enough, as it faces potential fines from regulators and prosecutors, as well as lawsuits from cheated customers. Spain’s industry ministry said on Tuesday Volkswagen’s local business had agreed to return fuel-efficiency subsidies on vehicles that had broken rules. It said Spain, which offered subsidies of 1,000 euros for energy-efficient car purchases, would ask for the money back from the car manufacturer and not consumers. Volkswagen shares dropped 4.1 percent to close at 95.20 euros ($107.09) in European trading on Tuesday.

Mueller also said Volkswagen’s core VW division, struggling with high-fixed costs and low profit margins, would be given more autonomy, akin to the independence enjoyed by premium flagship brands Audi and Porsche. Analysts have long urged the company to tackle underperformance at its core mass-market brand, and to dilute control from the center which has been blamed for product delays and problems adapting to local markets. A source familiar with the matter also said the executive committee of Volkswagen’s supervisory board would meet on Wednesday to discuss progress with the company’s investigations and engaging U.S. law firm Jones Day to lead an external probe. Klaus Mohrs, mayor of Wolfsburg where Volkswagen employs around 70,000 people, said on Monday he expected a sharp decline in business taxes due to the crisis, and announced an immediate budget freeze and hiring ban.

The emissions scandal has sent ripples through the global car market too, with manufacturers fearing more costly regulations and a drop in diesel car sales. The European Commission is working on plans to reform the European system for approving new models of cars by the end of the year.

Hacker on the Loose – IP 105.229.72.229

Watch out for the below named hacker. They tried to access my Google Account.

Whois 105.229.72.229
Report 105.229.72.229 Check 105.229.72.229
inetnum: 105.229.0.0 – 105.229.255.255
netname: Telkom_Internet_Broadband_105_229
descr: Addresses used to provide Broadband access to Telkom Internet customer
descr: Abuse Contact: abuse(at)telkomsa.net
descr: Tel: +27 12 3523661
country: ZA
admin-c: pb455-afrinic
tech-c: pb455-afrinic
status: ASSIGNED PA
remarks: Abuse Contact: abuse(at)telkomsa.net
remarks: Tel: +27 12 3523661
mnt-by: TF-165-143-0-0-165-149-255-255-MNT
source: AFRINIC # Filtered
parent: 105.228.0.0 – 105.229.255.255

person: Pieter Bezuidenhout
address: Telkom SA Ltd
address: PO Box 2753
address: Pretoria
address: Gauteng
address: 0001
address: ZA
phone: +1 111 1111111
fax-no: +2721 3111111
abuse-mailbox: abuse(at)saix.net
nic-hdl: PB455-AFRINIC
remarks: Abuse complaints can be directed to abuse(at)saix.net
remarks: DNS Issues can be directed to dnsadmin(at)saix.net
source: AFRINIC # Filtered

Zambian economy slows as power cuts and copper price weigh

Zambian economy slows as power cuts and copper price weigh: minister

LUSAKA, Sept 16 (Reuters) – Zambia’s economy is likely to grow by less than 5 percent in 2015 due to a power crunch that has hit output from mining companies already grappling with a slide in global copper prices, Finance Minister Alexander Chikwanda said. In an interview with Reuters, Chikwanda also said the government was reluctant to acquire more debt due to rising servicing costs, but if necessary would prefer longer-term loans as opposed to short-term IMF money. Africa’s second biggest copper producer has suffered power shortages due to low water levels at its main Kariba hydro plant and also faces reduced exports due to lower metal prices. “The state of the economy is challenging,” said Chikwanda, whose budget a year ago projected growth of 6 percent. “Now GDP by year end could have reduced to something around 5 percent. It might even be slightly below 5 percent.”

While mineral output only contributes 15 percent to Zambia’s budget and less than 10 percent to GDP, it accounts for a lofty 70 percent of export earnings. Mining only employs 60,000 people directly but many more work for firms supplying goods and services, increasing the industry’s importance. “This state of affairs is not very satisfactory. We have to move fast to try and diversify our sources of export earning,” he said, identifying agriculture as the greatest potential. The cash-strapped administration would clamp down on spending to cut the 2016 budget deficit and limit borrowing as external debt servicing costs had risen to 10 percent of the budget.

Providing Forensic Accounting Services as a Small Firm

Written by Tracy L. Coenen, CPA, CFF

FOCUS – Newsletter of the AICPA Forensic & Valuation Services Section

Forensic accounting and fraud investigation are hot specialties in the accounting world. Experts agree that the need for fraud detection services is growing, creating opportunities for small and midsized firms that are looking to start or expand a forensic accounting practice. Building a stable forensic accounting practice takes time because the services and clients are unique. The key to becoming a real competitor in the area of fraud investigation to focus your firm’s strengths on the right quality services and clients to enhance your brand.

Forensic services are usually divided into two subsets: fraud investigation (financial statement fraud, corporate embezzlement, bribery, and insurance fraud) and litigation support services (contract disputes between corporations, shareholder divorces, intellectual property infringement, business insurance claims, bankruptcy consulting, business valuation, and family law issues). Within both service areas exists a variety of potential clients, including attorneys, corporations, government agencies, non-profit organizations, and individuals. Those clients can be divided further according to the industries in which they specialize or the types of matters in which they’re involved.

Defining Services and Clients
Developing a successful small forensic accounting practice depends on selecting particular types of cases and clients because most firms cannot perform at a high level in all types of engagements. A forensic accountant could be involved in many types of cases, so it is critical that a smaller practice define its expertise and specific services.It is not uncommon for a forensic accounting professional to have an expertise in a particular industry such as hospitality or banking, although such specialization is not required. If someone in the practice does have an industry specialty, it makes sense to market heavily within that industry.

Determining a specialty also defines the firm’s marketing message for maximum impact on the intended client base. When practice managers narrow their focus (by either choice or necessity), clients find them more easily. The clients are clear about what the forensic accounting practice’s “sweet spot” is, and they can determine better whether their needs fit within that range.

Competing in the Marketplace
Larger firms carry well known names and usually are perceived as having huge depth and breadth of experience. A very large firm with offices around the world can almost always round up an “expert” on any issue or in any industry. Consequently, some smaller firms may think they can’t compete with those types of resources.

But smaller firms can effectively compete with larger firms by developing a niche and performing at a high level within that area of specialization. Smaller firms may not be able to rely upon their name alone to bring in business, so they have to sell the quality of the services they provide and gradually build a reputation in the industry.

At times, a larger firm will have a competitive advantage for being selected for a forensic accounting engagement. Francine McKenna, President of McKenna Partners in Chicago and former Director in the Internal Audit Services practice at Pricewaterhouse Coopers, says that larger firms are well-positioned to complete very large, long engagements. They’re probably also better equipped to carry out international assignments.

However, in many instances, a smaller forensic accounting practice can provide a distinct advantage to clients. Curtis J. Reynolds, CPA, a shareholder of Peters & Associates, S.C. a small forensic accounting firm with six offices throughout the United States, asserts that small firms can compete with larger firms by banking on the quality of services provided in conjunction with competitive pricing structures.

“Walking into an engagement with a team led by someone with very solid experience and a strong forensic accounting background is definitely an advantage,” says Reynolds. Fraud investigations can become complex, so an investigator with significant experience puts the client at a definite advantage.

McKenna agrees. She suggests that smaller firms highlight their expertise in a particular technical area or industry, rather than trying to “be everything to everyone.” She even recommends that small firms market themselves as “first choice for specific engagements.” Some managers of smaller forensic accounting practices have had great success by maintaining a narrow focus.

Marketing a small forensic accounting practice comes down to highlighting the firm’s strengths and abilities. Reynolds says that his firm’s most successful results have come from personalized marketing. “Our most valuable marketing activities have been networking, making presentations to industry groups, and word-of-mouth. We find advertising in publications helpful, but we believe the activities that allow us to connect personally with potential clients have greater value.”

The key to competing with larger firms has three clear components. First, the forensic accounting practice must find and market a narrow service-offering. Next, they must always provide the absolute highest quality work product, relying upon the depth of expertise within their firms, rather than the number of people. And finally, they must be customer friendly, avoiding the bureaucratic problems many larger firms face.

Case Administration
Although forensic accounting engagements will have many administrative issues similar to those of a traditional engagement (budget, staff assignments, and engagement letters, for example), there are distinct differences between the two types of engagements.

A traditional audit, for example, has a level of service that is fairly predictable from year to year. However, the boundaries of a forensic engagement are sometimes hard to define, making it difficult (especially on larger engagements) to create an accurate budget. The easiest way to deal with budget issues is by breaking up the forensic accounting engagement into incremental phases for the work. This approach defines the tasks and makes the overall process easier.

One creative way to bill forensic accounting work is on a “fixed fee”  structure, rather than charging clients by the hour for an investigation. This method of billing offers the advantage of capping the client’s costs at a predetermined level. It allows the client to know exactly the price of the services before the project is started.

A fixed fee engagement involves some risk for the accounting firm. It is their responsibility to define an appropriate fee up front or risk losing money if staff time exceeds the initial budget. At the same time, it allows the forensic accounting practice a greater profit if the investigation team can work efficiently. Fixed fee engagements work best when the boundaries of the work are well defined. When a client isn’t sure how deeply they want an issue investigated, it may help to develop phases for the work and fees. The client can proceed with the first phase or two and then decide whether to continue the investigation with the additional phases. This arrangement is also a plus for the accounting firm because the work and the fees for the later phases can be adjusted based on information gathered in early stages of the investigation.

No matter how the billing is arranged, smaller forensic accounting practices should not position themselves as the least expensive alternative. True, smaller firms often can be more competitive on fees. However, Michelle Golden, president of Golden Marketing says “The belief that you get what you pay for is strong. Set the price in accordance with the value you are delivering, which should be based on your ability to solve and resolve.”  Golden suggests that smaller firms may be able to charge a premium for their services because of the personal attention and responsiveness that they can offer in the course of providing high quality services.

Like any traditional accounting engagement, an investigation should start with an engagement letter that outlines the agreed-upon scope of work and fees. It also outlines the timing, document availability, client participation required, and details about administrative issues such as conflicts of interest and nonpayment of invoices.

The big departure from a traditional engagement, however, is the lack of standard work programs to guide the investigation. Although a firm should still have guidelines and checklists in place to assist staff, each fraud examination is quite different from the next, so standard work papers are nearly impossible to craft.

In general, the principal investigators should provide staff with some basic guidelines on administrative details, evidence handling, document management, and process management. Checklists are helpful, especially for some for the more standard tasks, such as document requests and financial statement analysis. The actual performance of investigative tasks will vary from project to project, but general guidelines should be in place to monitor the completion of engagement tasks.

Without standard work programs, staff supervision is critical to ensure the proper handling of evidence and thoroughness in investigative procedures. Because smaller firms or fraud investigation practices typically have fewer staff members involved, staff supervision and control over documents and evidence are more manageable.

Performing Forensic Accounting Engagements
Forensic accounting engagements are to be performed in accordance with the AIPCA’s  Statement on Standards for Consulting Services. As with other services provided by CPAs, the professionals involved in a forensic accounting engagement are required to adhere to the basic standards of professional competence, due professional care, planning and supervision, and sufficient relevant data.

Although there is no requirement that an accountant be independent in a forensic or litigation engagement, AICPA Ethics Rule 101, Independence (AICPA, Professional Standards, vol.2, ET sec. 101) must be considered in light of other engagements performed by the firm and the potential that lack of independence could impair the credibility of an expert witness.

During a traditional engagement, staff typically has the prior year’s working papers to follow when deciding what procedures to perform. On a fraud investigation, however, there is no such “cheat sheet,” so closer supervision of staff is necessary.  Less experienced staff can feel lost on an engagement like this, so the more experienced investigators should be alert to this and willing to lend a hand.

Reynolds says that the key to successful teamwork at his firm has been the clear division of responsibilities along with regular communication about the status of an investigation. He says outlining expectations and roles makes things easier, especially in light of the fact that the firm uses few traditional work programs, in favor of basic procedural checklists.

However, because each forensic accounting engagement is unique,Reynolds says it’s important that staff not become too reliant on checklists. “They need to be able to think on their feet and independently develop strategies for obtaining and examining documentation, all the while keeping the manager of the file updated on their progress.”

Fraud investigations often begin with a document request list. Part of this task can be standardized; much cannot be. Routine procedures include examination of financial statements and tax returns. A complete copy of the detailed general ledger for the periods in question is desirable, but is not always possible, especially at smaller companies. If a perpetrator has been identified, it is also standard to see that person’s personnel file and disciplinary records.

Analytical review may be an important part of a fraud investigation, especially if the client is unsure of where fraud lies in the accounting system. Although looking at comparative figures and analyzing ratios will not provide proof of a fraud, they can help in identifying vulnerable areas of the financial statements. They also can sometimes even help identify an account with apparent manipulations and create a roadmap for the investigation.

From this point forward, each investigation will take on a life of its own. The detailed records requested will vary, depending upon the individuals under suspicion and the accounts potentially affected by a fraud or legal matter. For example, a case involving lost profits will likely require examination of detailed sales records for the period in question. Forensic accountants will also have to examine income statement items in detail to help determine profit levels to be used in damage calculations.

A fraud investigation may require the examination of a completely different set of accounting documents. In a case involving allegations of collusion between a purchasing manager and a supplier, the forensic accountants will likely want to see detailed documentation of the transactions with that supplier.

Proper document management procedures must be implemented from the start of the forensic accounting engagement. It is imperative that the team be able to quickly locate key documents, and easily find other pertinent documents, if requested.

A database should be created to track documents, the dates on which they were received, who provided the documents, and a short description of each item. If evidence has already been numbered or otherwise stamped as part of a lawsuit, those numbers should also be logged in the database. They will be important when referring to the documents.

Document management tasks are easily neglected, especially on smaller engagements. It can be time consuming to inventory the many documents that a fraud investigation can accumulate, but neglecting this important task can cost the team more time and money in the long run. It can also impede the process of preparing a final report or testifying in court.

The detailed examination of accounts and transactions is the most difficult part of an investigation to discuss in an article, primarily because such a wide variety of techniques can be used and a multitude of concerns are specific to each investigation. Suffice it to say that this is the heart of all forensic examinations, and an experienced investigator will know how and where to look for fraud, so he or she should be directing all activities of the engagement staff.

Attention to quality control will be paramount in all fraud investigations because a small firm attempting to compete with larger firms will need a strong reputation to succeed. One botched engagement can ruin many future prospects; therefore, it is critical that the work product be of the highest quality, presenting the image that you want future clients to see.

Building for the Future
Developing a fraud examination practice is challenging, from an acquisition perspective as well as a performance perspective. Because the  process of a fraud investigation is almost impossible to standardize, putting the appropriate systems into place can be difficult. By creating administrative tools to manage engagements, a firm’s experienced investigators can work with newer staff to develop a standard investigation approach that works and that can be applied to future engagements. Once a forensic accounting practice is able to produce good results in its early engagements, it is on the right path toward developing a reputation in a specialty area and will be able to cite success  stories when selling forensic accounting services.

Courtesy: Providing Forensic Accounting Services as a Small Firm | Sequence Inc. Forensic Accounting – http://www.sequenceinc.com/providing-forensic-accounting-services-as-a-small-firm/