Accountancy news: February 2014

Posted on February 5, 2014 · Posted in Accounting & Business

AB News – February 2014

 

International

 

Substantial adoption of IFRS

 

IFRS is now the “de facto global language for financial reporting” says the IFRS Foundation.  Some 122 jurisdictions have been profiled by the Foundation to examine their use of IFRS.  Nearly all are now committed to IFRS and in 101 of the jurisdictions IFRS is required for domestic listed companies.  Modifications to IFRS are rare, mostly temporary and with limited application.  Michel Prada, chairman of the IFRS Foundation Trustees, said: “The vision of global accounting standards has been publicly supported by almost all international organisations….. Twelve years after the reform of the IASC and the establishment of the IFRS Foundation and the IASB, we now have firm evidence of that vision now becoming a reality.”

 

IR framework welcomed

 

There has been wide support for the Integrated Reporting framework, launched in December.  City of London Lord Mayor Fiona Woolf said the framework “is underpinned by a new vision for how business goes about business… it is a catalyst that can bring about profound changes in business and investor behaviours”.  Dr Jeremy Osborn of EY’s Climate Change and Sustainability Services, called the framework “a major milestone in the development of corporate reporting” that “will lay strong foundations for sustainable capitalism”.  Larry Bradley, global head of audit at KPMG International, endorsed IR, saying “it is time to move business reporting beyond merely a discussion of past financial performance”.  The framework was also strongly welcomed by PwC and Deloitte.

 

KPMG results

 

KPMG reported a 3.7% growth in global revenues in the year ending September, driven by strong performances by the audit, tax and advisory divisions.  The strongest growth was recorded in the Americas, where revenues grew by 6.7%.  Advisory revenues rose globally by 6.6% and audit by 4.2%.  The firm hired 45,000 people in the year, adding an extra 3,000 partner and staff, bringing total numbers of partners and staff to a record 155,000.

 

IT delays banks’ risk analysis

 

Regulatory assessments of risk exposure at the world’s largest banks have been delayed by weaknesses in banks’ IT systems.  The Basel Committee – comprising banking regulators from 27 countries – are attempting to compare risk profiles of the major banks and had intended to complete the process by the end of next year.  However, the Committee says it is now clear that IT systems at 10 of the 30 largest banks cannot provide the necessary aggregated information.  Despite the problem, the Basel Committee will now extend its focus to mid-tier banks.

 

Audit shows debt crisis in Chinese local government

 

Local governments in China had a total debt of 17.7 trillion yuan ($3 trn) as at June last year, according to an audit conducted by China’s National Audit Office on the instruction of government.  Debt levels had risen 70% in two and a half years.  Much of the local government debt is guaranteed by central government, according to a separate audit report.  That second report also found that in some areas there had been what was described as a “prominent” use of disguised borrowing, including through trusts.

 

Chinese banks ‘under capital pressures’

 

China’s banks are facing capital pressures because of slower organic capital growth at a time when their asset bases are growing rapidly, according to KPMG’s latest Mainland China Banking Survey.  Profitability will meanwhile slow down, says the firm, given the fall in economic growth, liberalisation of interest rates and a rise in non-performing loans.  Simon Gleave, regional head of financial services at KPMG China, says: “A number of the commercial banks are considering replenishing capital through the issuance of innovative capital instruments, although higher capital costs and limited market acceptance may be an issue.”

 

China tackles shadow banking system

 

China is toughening up its approach to the shadow banking system, according to a report in the China Business News based on leaked draft regulations.  There has been a big increase in lending in recent years by China’s trusts and other non-banking financial institutions.  There are concerns that shadow banks are not subject to the same controls as banks regarding off-balance sheet lending.  The proposed new rules would provide official recognition of the role of shadow banks, but would place them under greater scrutiny.

 

PwC/Booz deal confirmed

 

Partners in the consultancy Booz & Company have approved its merger with PwC.  The transaction is expected to conclude in March, subject to regulatory approval and the meeting of merger terms.  PwC says the merger will provide a more comprehensive consultancy service to clients, with service offers from strategy development through to execution.  Dennis Nally, chairman of PricewaterhouseCoopers International said: “The combination of PwC and Booz & Company will create the stand out professional services organisation in the world, working with a full range of stakeholders to build trust and solve important problems from strategy through execution.”

 

KPMG acquires Link Analytics

 

KPMG has acquired Link Analytics, a US based analysis applications consultancy.  The deal is intended to assist KPMG’s capacity to provide data and analytics services to clients, providing increased support for clients’ growth plans, acquisitions, loyalty schemes and performance outcomes.  “Data and analytics continue to fundamentally transform core business processes and decision making for our clients,” said John Veihmeyer, chairman and chief executive of KPMG.  Link Analytics’ professional staff are being integrated into KPMG’s advisory business.  Financial terms of the deal are not disclosed.

 

Vodafone supports country-by-country reporting

 

Vodafone has pledged its commitment to country-by-country taxation and to paying its fair share of taxes.  Vodafone has now published its second country-by-country breakdown of taxes paid and its economic contributions.  The move can be regarded as implied criticism of other leading corporations accused of tax avoidance through the use of complex cross-border structures.  Vodafone has itself faced criticism, with India’s tax authorities seeking capital gains tax payments related to Vodafone’s acquisition of Hutchison’s operations in India in 2007.

 

UK

 

EU audit reform agreement

 

A compromise audit reform proposal has been agreed by the European Parliament and EU member states involving mandatory audit rotation every ten years.  Public interest entities – such as banks and listed companies – will be permitted to renew audit tenure only once.  Joint audits will be encouraged.  Action will be taken against perceived conflicts of interest involving audit firms, with tax advice by auditors prohibited and a cap on audit firms’ provision of other non-audit services.  New rules will be established requiring more detailed audit reports, which must focus on providing relevant information to investors.  Full details of the package are unlikely to be published before the spring.

 

Companies ‘improve disclosures’

 

Companies have responded positively to the latest corporate governance and stewardship codes by improving the quality of their disclosures, says the Financial Reporting Council.  But larger companies are doing better than small companies.  There has been an increase in the tendering of audit contracts and many large companies now disclose boardroom diversity policies in advance of this year’s implementation requirement.  Many more companies are preparing for improved disclosures in their next reports.  The FRC warned companies to pay more attention to succession planning.

 

FRC calls for ‘more prudent’ accounting standards

 

The IASB should put prudence, stewardship and reliability at the heart of future revisions of accounting standards, says the Financial Reporting Council.  Roger Marshall, chairman of the FRC’s Accounting Council, said: “In 2010, the IASB made some changes that downplayed the ideas of prudence, stewardship/accountability and reliability.  We are pleased that the IASB has said that it will reconsider this in the light of work on the rest of the Conceptual Framework.”  Melanie McLaren, FRC executive director for codes and standards, added: “It is all too often said that directors cannot recognise their business from their financial statements.  Accounting standards should allow an appreciation of the results of the business model.”

 

PwC and KPMG complete RSA investigations

 

PwC and KPMG have completed investigations into alleged accounting irregularities of £72m in the Irish trading operations of RSA Insurance.  The reports were not published, but in a statement RSA said: “PwC’s work supports the board’s view that inappropriate collaboration amongst a small number of senior executives in Ireland undermined control effectiveness over claims.”  RSA said the PwC review concluded that the group’s control framework is appropriate, but recommended strengthening financial controls in the Irish operation and assurance processes across the Group.  KPMG’s review was an extension of its role as newly appointed Group auditor and it found problems in Ireland are not replicated elsewhere.  RSA is taking legal advice over whether to take action against former auditors Deloitte.  Deloitte declined to comment.

 

KPMG UK profits rise 27%

 

KPMG has announced a 27% rise in UK profits to £455m in the year ending September.  Revenues rose by 0.4% to £1.8bn, increasing by 16% in the audit function, 15% in advisory, while staying broadly static in tax.  Partner pay increased by 23% to £713,000 while the employee bonus pool rose by 20%.  Simon Collins, UK senior partner and chairman, received £2.42m for the year.  The firm’s global revenues rose by 3.7%.

 

CFO-type post for Whitehall

 

A post of director general for spending and finance for all of government is to be created, equivalent to the role of a government CFO.  The recommendation came from a Treasury review, established after an earlier report last June proposed the creation of the CFO post.  ACCA chief executive Helen Brand welcomed the decision, saying: “Strong financial leadership is essential for driving even higher standards in Whitehall and the proposed role of a director general for spending and finance – combining the head of the government finance profession and head of public spending – has the potential to bring strong and visible leadership for financial management that will allow finance to better support decision-making across Whitehall.”

 

Audit rotation accelerates

 

The London Stock Exchange has joined the growing list of large companies putting their audits out to tender.  In a statement it said: “In light of the increasing diversification, scale and reach of London Stock Exchange Group plc (LSEG), and also in line with good corporate governance regarding periodic tenders, LSEG announces its intention to conduct a tender process for the position of external auditor of LSEG.  LSEG anticipates appointing the successful audit firm in the summer of 2014.”  In other tender exercises, KPMG won the Unilever and Berkely audit contracts previously held by PwC, while Deloitte won the Marks & Spencer audit from PwC and Spirax-Sarco’s contract from KPMG.

 

HMRC loses £5bn Europe law case

 

HMRC may have to repay between £5bn and £6bn in tax after losing the so-called ‘FII GLO’ case in the European Court of Justice.  The court ruled that HMRC was wrong to impose a six year limit on claims for repayment of advance corporation tax that had been improperly charged.  In 1999 the Government conceded that it had been wrong to treat dividends received by UK companies from foreign subsidiaries differently from those of UK subsidiaries.  But by the time this was established in 2003, also by the European Court of Justice, it became impossible for many corporations to meet the six year claims limit for seeking repayments.

 

FRC warns on bank audit quality

 

Audits of banks and building societies need to improve and to do so quickly, says the Financial Reporting Council.  The FRC has embarked upon a review to consider why progress on improving audit quality in the banking sector has been what it calls “slow”.  In a statement the FRC said: “Over the last five years, the FRC has increased its monitoring of bank and building society audits in its annual programme of audit quality inspections, but the findings have shown they are below the average of all audits inspected.”

 

Deloitte finds CFOs upbeat

 

CFO confidence in the economy is at a three and a half year high, according to the latest Deloitte CFO survey.  For the first time since the onset of the financial crisis, bank borrowing is seen as the most attractive source of finance.  Half of those surveyed give credit to new Bank of England Governor Mark Carney for his role in raising economic confidence.  But the majority of CFOs expect interest rate rises by the middle of next year and one in four expects a rate rise this year.

 

EY fined over Farepak audit

 

EY has been reprimanded and fined £750,000 after the Financial Reporting Council found against it for its audits of Farepak and its parent company European Home Retail.  Partner Alan Flitcroft has also been reprimanded and was fined £50,000.  EY and Flitcroft admitted their conduct fell short of expected standards.  They accepted that insufficient evidence was obtained for the audit reports and so breached audit standards.

 

Former Bradford & Bingley FD fined by FCA

 

Former Bradford & Bingley finance director Christopher Willford has been fined £30,000 by the Financial Conduct Authority for failing to provide up-to-date financial information to his board ahead of its 2008 rights issue.  In May of that year, Willford received information indicating that the bank’s financial situation may have been weaker than expected, but he failed to pass this on to his board.  “His conduct fell short of the FCA’s standards,” said Tracey McDermott, the FCA’s director of financial crime and enforcement.

 

FCA and PRA to investigate Co-op Bank failure

 

The Financial Conduct Authority and the Prudential Regulation Authority are to conduct investigations into the crisis at The Co-operative Bank which revealed a £1.5bn capital shortfall, leading to its bail-out by bondholders and its effective demutualisation through a stock exchange listing.  The Bank’s former owner, the Co-operative Group, and the House of Commons Treasury Select Committee are conducting their own investigations.  The PRA said that its inquiry would consider the roles of former senior managers.  The FCA said that its independent review will only begin once it is clear that it will not prejudice regulators’ possible actions.

 

Mazars acquires Deloitte public sector internal audit unit

 

Mazars has acquired Deloitte’s public sector internal audit subsidiary, which provides internal audit services to councils and health bodies in London and the South East of England.  The move follows the success of Mazars in winning public sector audit contracts that became available because of the abolition of the Audit Commission.  Some 120 Deloitte staff transfer to Mazars, making it one of the four largest providers of audit services to the public sector.

 

Deloitte University established

 

Deloitte has established a university for staff and clients in Europe, the Middle East and Africa.  Deloitte University will be located in Belgium and will link with the existing Deloitte University established two years ago in Texas, which has been attended by over 50,000 Deloitte staff and clients.  Courses at the EMEA university will be led by Deloitte leaders.  “Competition for talent in the coming years will be challenging,” said David Sproul, senior partner and chief executive of Deloitte UK. “Deloitte University EMEA will help the organisation attract and retain talent by distinguishing Deloitte from its competitors.”

 

Big rise in insolvent accountancy firms

 

There was a 41% jump in the number of accountancy firms going out of business last year, as small firms faced a squeeze on profits and cash flow, reports IT provider Syscap.  The number of firms going bust in 2013 rose to 103, up from 73 in 2012.  Philip White, chief executive of Syscap, said that firms were suffering from several simultaneous pressures, including weakness in clients’ cash flows, some small firms bringing book-keeping in-house, the raising of the audit turnover threshold and, for larger firms, the slowdown in M&A activity.

 

Debenhams FD quits

 

Debenhams’ CFO, Simon Herrick, has stepped down, following poor end of 2013 results for the department store group.  Richard Meddings is leaving his role as finance director of Standard Chartered as part of a restructuring of the bank’s management.  Former finance director of Burberry, Stacey Cartwright, has been appointed as chief executive of Harvey Nichols.  Nick Luff, finance director of Centrica, which owns British Gas, has been appointed finance director of publisher Reed Elsevier.

 

Late return excuses not accepted

 

An accountant claimed he was so busy submitting tax returns for clients that he did not have time to do his own.  This was one of the ten most bizarre excuses used by taxpayers to explain late returns.  The number one oddity was from a self employer builder, who was apparently in mourning for his pet goldfish.  Another taxpayer was too distressed by a volcanic eruption to concentrate, one man was unable to collect his post while doing a round-the-world cruise in his yacht and another, more prosaically, had his mail withheld by his wife.

 

Rest of World

 

EU audit reform agreement

 

A compromise audit reform proposal has been agreed by the European Parliament and EU member states that will establish mandatory audit rotation every ten years.  Public interest entities – such as banks, insurers and listed companies – will be permitted to renew audit tenure only once.  Joint audits will be encouraged.  Action will be taken against perceived conflicts of interest involving audit firms, with tax advice by auditors prohibited and a cap on audit firms’ provision of other non-audit services.  New rules will be established requiring more detailed audit reports, which will have to focus on providing relevant information to investors.  Full details of the package are unlikely to be published before the spring.

 

PCAOB worried by audit firms’ consultancies

 

The US Public Company Accounting Oversight Board is concerned about the increased risk of conflicts of interest from the expansion of audit firms’ consulting arms, its chairman James Doty has said.  The Big Four are to be called in by PCAOB to discuss the relationship between audit and consultancy operations.  Mr Doty said of the links: “We simply can’t be unaware of the implications for independence, objectivity, scepticism, audit quality.”

 

European audit regulators join force

 

Audit regulators from across the European Union have launched a single database to collate information from their inspections of audit firms.  The private database will contain inspection findings regarding the ten largest European networks of audit firms: PwC, KPMG, Deloitte, EY, BDO, Grant Thornton, Nexia, Baker Tilly, Mazars and Moore Stephens.  The database will include reviews of selected audits of listed companies, banks and insurers, with the objective of raising the quality of audits.  The project was initiated by the European Audit Inspection Group, which was established in 2011 as the basis for regulatory co-operation.

 

JP Morgan fined $1.7bn

 

JP Morgan has agreed to pay $1.7bn as a penalty for failing to spot the Madoff fraud.  It is the largest ever penalty in a case of this kind.  JP Morgan avoided criminal prosecution under the agreement with the US Attorney’s Office for the Southern District of New York.  The bank accepted that it had violated money laundering controls and failed to file a suspicious activity report regarding Bernard Madoff.  It has agreed to pay a further $350m to the US Office of the Comptroller of the Currency on related matters.

 

EU member states’ ‘unreliable audits’

 

The European Commission is relying too much on national audits by member states, according to a report from the European Court of Auditors.  This may lead the Commission to underestimate problems at member state level and not properly address weaknesses.  Since 2007, the Commission has increasingly relied on member states to audit regional spending part-financed by the EU, to avoid audit duplication and reduce costs.  The Court of Auditors recommends that the Commission strengthens arrangements for verifying error rates notified by national auditors and that national audit costs for regional spending are shared with the Commission.

 

Euro banks ‘need extra €110bn capitalisation’

 

Western Europe’s top 50 banks need an extra €110bn in capital, representing 60% of the global €185bn banking capital shortfall, says S&P.  It warns that European banks that fail to increase their capitalisation to what S&P and regulators regard as the minimum necessary thresholds face ratings downgrades.  There are wide divergences between the strength of different top 50 banks’ capital positions and in the quality of their capital, says S&P.  It predicts that the European Central Bank’s stress testing process this year will encourage banks to further deleverage and raise extra capital.

 

KPMG wins Vatican contract

 

KPMG has been retained by the Vatican to strengthen its accounting practices and bring them into line with IFRS.  EY was previously engaged to provide advice on making the Vatican state’s government structures more transparent.  McKinsey has been asked to report on modernising the Vatican’s communications operations, focusing on its television and radio stations and newspaper.  Pope Francis is committed to improving the way the Vatican is managed following the arrest of its chief accountant, the Bishop of Salerno, Monsignor Nunzio Scarano, on fraud and corruption charges.  The Vatican Bank is being investigated regarding its possible involvement in money laundering.

 

Libya to adopt Sharia finance

 

Sharia financial systems are set to become the standard for Libya, following a vote by the National Assembly to adopt Islamic law more generally.  Economy minister Mustafa Abu Fanas said that following the vote the Government would bring forward detailed legislation to implement Sharia financial systems.  He declined to provide a date for implementation.  The Government believes the move could lead to increased investment in the country from the Gulf region.

 

Deloitte University established

 

Deloitte has established a university for staff and clients in Europe, the Middle East and Africa.  Deloitte University will be located in Belgium and link with the existing Deloitte University established two years ago in Texas, which has been attended by over 50,000 Deloitte staff and clients.  Courses at the EMEA university will be led by Deloitte leaders.  “Competition for talent in the coming years will be challenging,” said David Sproul, senior partner and chief executive of Deloitte UK. “Deloitte University EMEA will help the organisation attract and retain talent by distinguishing Deloitte from its competitors.”

 

Latvia joins eurozone

 

Latvia has become the eighteenth nation to join the eurozone.  It is at present the EU’s fastest growing economy.  Latvia’s central bank predicted adoption of the currency would provide economic stability and higher levels of investment, leading to increased job creation and tax revenues.  However, opinion polls show a substantial majority against joining the currency union, which remains in serious difficulty.  Slovenia is the latest member country to bail-out its banks at a cost of €4.8bn – but its government does not expect to need external financial support.

 

Egypt commits to economic stimulus plan

 

Egypt has increased the size of its economic stimulus package by over a billion dollars to $4.36bn, largely financed from borrowing from Saudi Arabia, Kuwait and the UAE.  Critics point out that the budget deficit is already 14% of GDP and public debt stands at 87.5% of GDP.  Given the continued political crisis, accentuated by a flawed referendum on a proposed fundamental change to the constitution, it is unlikely that the country’s economy will be able to grow quickly.  Prior to the overthrow of former president Mubarak during the Arab Spring, Egypt’s economy was growing at 7% a year.

 

A4S forms Euro group of CFOs

 

Accounting for Sustainability has formed a European CFO Leadership Network to put sustainability at the heart of corporate decision-making.  The charity was found by Prince Charles, the Prince of Wales.  Network members include CFOs of Sainsbury, John Rogers; Unilever, Jean-Marc Huët; Danone, Pierre-André Terisse; and Walmart EMEA, Richard Mayfield.  John Rogers, who is co-chair of the network, explained: “HRH The Prince of Wales has rightly recognised the vital importance of bringing sustainability issues into the very heart of corporate governance and accounting. What used to be seen as greenwash needs to become as natural to company finance teams as it is to CR departments or even NGOs.”

Insolvencies rise in France

 

France’s continued economic problems have been underlined by an increase last year in corporate insolvencies, which rose by 4.3% in a year.  Trade risk analysts Coface estimate corporate insolvencies in France last year at 62,500 businesses.  SMEs were worst hit, with small firm insolvencies rising 8% in the closing months of the year.  One in three insolvencies was in the construction sector, with transport, electronics and food also badly affected.  Grant Williams, a Coface risk underwriting director, said: “The French economy is still in considerable difficulties and confidence is at a low ebb as the Government attempts to restructure.”

 

Praxity reports 10% revenue rise

 

The Praxity international alliance of firms has reported a 10% rise in revenues for last year.  Member revenues increased from $3.7bn in 2012 to $4.1bn last year.   The biggest growth was in management consultancy, where revenues rose by 28%.  Revenues in litigation support grew by 18%, in corporate recovery and insolvency by 13%, in corporate finance by 12%, tax by 10% and audit by 8%.  Revenues grew by over 11% in North America and in Asia Pacific, by 8% in Africa and the Middle East and by 7% in Europe.

 

EBA issues Bitcoin warning

 

The European Banking Authority has issued a warning about the use of Bitcoin and other virtual currencies.  Risks include the collapse in value of a digital currency, given the lack of any guarantee system.  Digital wallets may be hacked into, or access lost.  Criminals have used digital currencies for money laundering and to conceal illegal activities and their identities.  The EBA – the EU’s banking regulation oversight body – suggests that holdings are limited to what can afford to be lost, that effective security is adopted and that a user becomes familiar with the business model and trading practices of the digital currency.

 

BDO acquires Alpen Rosenthal

 

BDO has expanded its operations in the United States through the acquisition of Pittsburgh-based firm Alpern Rosenthal.  The acquisition adds 250 Alpern Rosenthal partners and staff in Pennsylvania and South Florida to BDO.  Alpern Rosenthal is one of the largest professional firms operating in Pittsburgh and provides accounting and consultancy services.  BDO now has 52 offices and 3,700 partners and staff across the US.

 

Tunisia told by IMF to accelerate reforms

 

Tunisia has been told by the IMF to accelerate progress on agreed economic reforms.  The warning follows a visit to the country by an IMF delegation in November, which reviewed government actions promised as a condition of a $1.7bn aid package awarded by the IMF last June.  A spokesman for the IMF said:  “The IMF remains fully committed to supporting Tunisia through financing, economic, and financial policy advice, and through technical assistance.”  He added that the IMF is aware of the political tensions that create difficulties for the implementation of economic reforms, but that some progress had been made on financial services, tax and investment policies.

 

Ireland

 

PwC and KPMG complete RSA investigations

 

PwC and KPMG have completed investigations into alleged accounting irregularities of £72m in the Irish trading operations of RSA Insurance.  The reports were not published, but in a statement RSA said: “PwC’s work supports the board’s view that inappropriate collaboration amongst a small number of senior executives in Ireland undermined control effectiveness over claims.”  RSA said the PwC review concluded that the group’s control framework is appropriate, but recommended strengthening financial controls in the Irish operation and assurance processes across the Group.  KPMG’s review was an extension of its role as newly appointed Group auditor and it found problems in Ireland are not replicated elsewhere.  RSA is taking legal advice over whether to take action against former auditors Deloitte.  Deloitte declined to comment.

 

Non-bank funding for SMEs is ‘priority’

 

Ireland must develop a stronger and larger non-banking structure for financing SMEs, concludes the government’s medium term economic strategy.  It says that SMEs are over-dependent on bank finance and indicates there is little prospect of national banks developing the necessary capacity to lend sufficiently to SMEs in the near term.  The country must grow its securitisation market and provide the right legislation and regulation for non-bank lending and other capital market funding, argues the strategy.

 

Ireland ‘suffers IT skills shortage’

 

Half of IT job vacancies in Dublin are being filled by overseas workers because of a shortage of local IT skills, according to a report in the New York Times.  It adds that around 4,500 IT jobs are currently unfilled in Ireland because of a lack of IT skills, despite the high level of unemployment.  Across the EU there are two million unfilled jobs: many because of the mis-match between skills and employers’ needs.  EU research found that 40% of employers have difficulty recruiting staff with the right skills.

 

PFI costs in NI ‘not properly reported’

 

There is a lack of proper reporting on the costs and commitments entered into under Northern Ireland’s Private Finance Initiative contracts, according to a report from the Northern Ireland Audit Office.  Annual payments on 39 operational PFI contracts will cost £245m a year until 2030, but there is no central collection of costs, nor reporting to the Northern Ireland Assembly.  More should be done to consider options to achieve value for money savings from existing PFI contracts, adds the Audit Office.

 

Debenhams FD quits

 

Debenhams’ CFO, Simon Herrick, has stepped down, following poor end of 2013 results for the department store group.  Like for like sales rose by 0.1% in the final 17 weeks of the year, though online sales grew by 27%.  Gross margins decreased, after goods were marked down more than intended, with poor end of year sales.  The store announced it expects to make further price mark downs in the early weeks of this year to clear stock.