2011 - Emile Woolf writes

Audit scope: we need a Court case to sound a wake-up call

The relevance of any set of accounts obviously wanes as time passes. Vast, complex multinational conglomerates, required by law and market expectations to present published financial statements within strict deadlines, can manage this process if well-governed, but auditing those statements within the same time frame can present even the largest audit firms with serious logistical […]

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Fudging the figures for Euro entry? That’s putting it mildly

Chicanery means “clever but misleading talk; a false argument; trickery; deception” (Concise Oxford Dictionary). This phenomenon seems to be prevalent wherever you look. For example, the European Economic Community began as a free-trade association. Then it was driven well beyond mere economic affiliation to become a complex, undemocratic, political combination whose promised benefits have evaporated. […]

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Currency debasement and public waste: partners in crime

There is nothing intrinsic to gold that explains its seemingly unstoppable rise in price. It is certainly beautiful, even transporting in strong light, and primitive races worshipped it as an earthly reflection of the higher worlds. But as an investment it is strictly in the non-performing class, until you sell it. Monetary assets always seek […]

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Debt: it’s better not to pretend it can be repaid

When your article will not appear in print until a month after you write it, you must remember that today’s whirlwind creates tomorrow’s dust.  It’s far safer to relate events to principles that, by definition, cannot change. According to Plato, anonymity and honesty are mutually exclusive. Even the most just man, he wrote, would become […]

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Justice in action: condoning default has a price

In the 6th Century AD, Emperor Justinian undertook the noble enterprise of saving, in writing, all the laws of ancient Rome. His famous “Code” includes the Roman definition of justice: ”the constant and perpetual will to render every man his due”. Since it is rare for any earthly “will” to be constant, let alone perpetual, […]

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Sovereign bailouts versus economic law: who will win?

The Queen’s question about the credit crisis was wonderfully simple: “If these things were so big, why did no one see them coming?” The answer given by Mervyn King, governor of the Bank of England, in his recent interview is that many people did see the crisis coming, but no one knew when. The same […]

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Clear? Coherent? Transparent? Intelligible? How would you describe our reporting standards?

UK accounting standards are celebrating their 40th birthday: Statement of Standard Accounting Practice No.1 on associated companies was issued in 1971. The initiative was given a boost in 1973 following exposure of Robert Maxwell’s deceits at Pergamon Press. In a hotly contested takeover battle Pergamon’s share price was supported by accounts that included a wildly […]

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Can rules-based accounting facilitate fraud? Enron revisited

We are approaching the tenth anniversary of the collapse of Enron. Have the lessons been learnt? Enron was the US energy giant that failed only 12 months after its share price rated it seventh largest corporation in America. A handful of tenacious journalists penetrated the miasma of filed data and revealed that the bulk of […]

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