1. How, if at all, does the tax system encourage leverage in banks? What is the effect of having tax relief for debt interest but not for dividends on equity? What effect does this have on the stability of the banking system?
2. What are your views on alternative systems to level the playing field?
3. Do banks’ attitudes to tax planning affect banking standards and culture, and does this have any effect on the wider economy?
4. Do you have any views on the role and purpose of structured capital markets teams in banks? Does the volume and type of structured tax transactions have any effect on bank stability, and did this play a part in the banking crisis?
5. What are your views on the effectiveness of the Code of Practice on Taxation for banks? Would the Code benefit from having sanctions and if so what should these be?
6. How effective has the Senior Accounting Officer legislation been with particular regard to banking standards and culture?
7. Do we need a special tax regime for banks? If so, what would this look like and what would be priorities for change? Should tax continue to follow accounting with respect to banks? Should the tax system actively seek to influence banking standards and culture?
8. Are banks exploiting regulatory and information arbitrage between FSA, HMRC and auditors? If so, what is needed to address this?
9. Should there be a ‘safe environment’ in which the tax authority, regulator and auditors can share confidential information and concerns, possibly on varying levels of seniority?
10. What was the role of accounting standards and reliance on fair value principles in the
banking crisis? What does a ‘true and fair view’ really represent to the market?
11. What are your views on the current incurred-loss impairment model and its role in the banking crisis? Do you consider that proposals to move to an expected-loss model will address criticisms of the current accounting rules?
12. What is the best method of accounting for profits and losses in trading instruments? Are there any alternatives to mark-to-market or mark-to-model that might better represent a ‘true and fair view’?
13. Did IFRS accounting standards contribute to a box-ticking culture to the exclusion of promoting transparency and a ‘true and fair view’ of the business?
14. Do we need a special accounting regime for banks? If so, what should it look like?
15. Are there any interim measures (such as mandatory disclosure) which could be introduced in the meantime?
16. What are your views on current proposals for improving disclosure and dialogue (with particular reference to discussion papers issued by FSA/FRC)?
17. Is there a problem arising from the difficulty of qualifying the accounts of a bank? Should auditors be able to ‘grade’ accounts – from AAA down? What would be the effect of this?
18. Should the scope of audit be widened so that auditors can better express a broader view of the business? For example should auditors comment specifically on issues such as remuneration policy, valuation models or risk?
19. What would be the effect of using return on assets as a performance measure in banks, as opposed to return on equity?
20. Are the amendments to the Financial Services and Markets Act 2000 regarding dialogue between regulator and auditor sufficient, or does further work need to be done in this area?
Each submission should:
• clearly state at the top which individual’s or organisation’s views the submission represents (which may be different from the particular person who sends it);
• begin with a short summary in bullet point form;
• have numbered paragraphs; and
• be in Word format with as little use of colour or logos as possible.
A copy of the submission should be sent by e-mail to [email protected] and [email protected] by 21 December 2012 marked “Banking Standards - Tax, Audit & Accounting”. There is no need to send a hardcopy.
It would be helpful, for Data Protection purposes, if individuals submitting written evidence send their contact details separately in a covering letter. You should be aware that there may be circumstances in which the Commission will be required to communicate information to third parties on request, in order to comply with its obligations under the Freedom of Information Act 2000.
A guide for written submissions to Select Committees may be found on the parliamentary website:
• Guide for Witnesses to House of Commons Select Committees
Please also note that:
• Material already published elsewhere should not form the basis of a submission, but may be referred to within a proposed memorandum, in which case a hard copy of the published work should be included.
• Memoranda submitted must be kept confidential until published by the Commission, unless publication by the person or organization submitting it is specifically authorised.
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