2014 - Emile Woolf writes

Big Audits: are they fit for purpose?

Over the past 30 years the 12 largest firms, through various consolidating moves, became the Big-8, then the Big-5 and, following the Enron/Andersen debacle 14 years ago, settled down as the “Big-4” who alone possess the reach, technical capability and manpower to conduct audits of the worlds largest enterprises. Although second-tier contenders like BDO and […]

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Financial rectitude: do the non-execs help?

Any columnist writing about financial misdeeds rarely lacks material. Buccaneering chief executives and ineffective auditors are invariably centre-stage – but what of the wise owls making up the panel of non-executive directors? How effective are they as a bulwark against executive opportunism or worse? I remember one prominent public company CEO, the darling of his […]

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Correspondence with Richard Watkinson

On 11 Oct 2014, at 09:02, Richard Watkinson wrote: Just read the morning headlines… any thoughts on TTIP? Will I find an article on your website? Emile’s reply: No, you will not find anything on my website specific to TTIP. I am of course strongly in favour of free trade, but am wary of customs […]

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Emile’s thoughts on Scottish independence

Understanding separatism The Scottish bid for independence was far from unique in today’s restless world. Madrid’s central and highly interventionist government, for example, is no friend to the people of Catalonia, who speak a different language and have every reason to feel remote and culturally disenfranchised. French-speaking Canadians in Quebec recently urged divorce from British-oriented […]

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Banks: prudence and sanity return?

Banks’ auditors have had to deal with the absurdity of accounts failing the ‘true & fair’ test for the very reason that they comply with a flawed standard. Auditors accused of rubber-stamping defective accounts of banks should now feel some relief. The International Accounting Standards Board appears at last to acknowledge the folly of its […]

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Massive overstatement of Tesco profits

By the time this column appears in print and on-line a month will have passed. A new crop of scandals will confront a world increasingly inured to the daily shocks that strike on every front, accounting included. As I write, following concerns raised by a whistleblower, Tesco has owned up to a quarter-billion pound overstatement […]

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Capital allocation & infrastructure spending: let the markets decide

My summer riverboat cruise from Amsterdam to Budapest along the Rhine, Main and Danube proved to be fully as instructive as it was relaxing. The majestic hilltop fortresses, castles and palatial edifices, erected to keep out tribal hordes, also testify to indulgences pursued by monarchs, princes and bishops over hundreds of years of relentless self-aggrandisement […]

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Words: weapons of mass destruction?

Concepts, like Plato’s “forms”, exist in the world of ideas. Compared with their myriad manifestations, the concepts of, say, “window”, “chair” or “coin” exist in the mind, immutable and unchanging. Similarly, our structured accounting lexicon began with broad acceptance of its underlying concepts. These criteria were treated as assumptions, laying the groundwork for that other […]

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Auditing the auditors: some improvement. But what of the economy?

The audit failures I have been highlighting so regularly are given full exposure in the Financial Reporting Council’s latest report on big-firm audit quality in the UK. Adverse findings relate to the usual suspects: goodwill impairment, revenue recognition, IT controls and loan loss provisions. Although quality (or lack of it) varies between the four top […]

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