The “flawless” audit exists in the mind alone. Regulators such as the Financial Reporting Council (FRC) are therefore having to deal with the many that, in varying degrees, are flawed. However, the FRC’s practice of allowing so many years to pass before reporting their findings and punishing the culprits undoubtedly weakens its authority and blunts […]

Accountancy-online – February 2020 My last article focused on the susceptibility of purchased “goodwill” to manipulation, and I cited instances in which its overvaluation had destroyed accounting reliability, causing severe losses to investors. This time let’s take a look at the ease with which another asset, year-end stock of goods, can wreak havoc with a […]

ECONOMIC PERSPECTIVES – 87   SEPTEMBER 2020 The tenacity with which certain economic fallacies persist is truly remarkable. Take the notion that the euro currency is too strong for certain countries, notably Greece, Spain, Portugal and Italy, causing their exports to be too expensive for foreign buyers; and being members of the eurozone they are […]

ECONOMIC PERSPECTIVES 86   Every primer on economics cites the familiar factors of production, land, labour and capital, as prerequisites for productive activity. Sometimes entrepreneurship is added to represent the gifted brain who brings the other three together in a commercial enterprise.   Land, of course, includes the entire unharnessed bounty of natural resources that […]

  ECONOMIC PERSPECTIVES – 84    [July 2020] Those of us struggling to get a grip on Chancellor Sunak’s latest relief-measures should note the terminology. He seeks to revive the Covid-stricken economy with a series of tax “giveaways”.  When anyone in government talks about giving something away, it’s instructive to ask yourself how they got it […]

  Although I have forgotten most of my own auditing experiences, a few still stand out. A client company that was in business as a confectionary retailer sold cakes over the counter, either whole or in weighed-out portions. The principal internal control was reconciling the weight of cakes leaving the bakery with the weight of […]

  [JUNE 2020 – ECONOMIC PERSPECTIVES – 83] As the spread of Covid begins to wane we should consider afresh whether, for example, a shopkeeper who travels to work to open his business is in fact acting irresponsibly. This comes, as ever, down to the question of risk. Since some people are more risk averse […]

  ECONOMIC PERSPECTIVES – 80 [GOING POSTAL – 1st June 2020] EMILE WOOLF In his latest book (“The Body – a Guide for Occupants”) Bill Bryson highlights the limitations on what money can buy. He points out, for example, that America spends more per capita on healthcare than any other nation in the world: two-and-a-half […]

ECONOMIC PERSPECTIVES – 78 and GOING POSTAL It’s not quite like having to start the economy from scratch, but this lockdown-induced recession warrants some detached assessment. We are aware that viable businesses have been forced to close their doors – or keep them open to serve a paltry trickle of customers. This has been happening […]

  Well, are we? In the course of more than four weeks of self/family isolation we have all encountered mountains of speculation on the sources of Covid-19; how it spreads; estimates of its final tally of victims; how many people already have antibodies and immunity; time-frames for each phase of its progress; Ro spread-estimates; international […]