Accounting & Auditing Archives - Page 10 of 12 - Emile Woolf writes

Time for a reformed regulatory framework – auditing included

Time for a reformed regulatory framework – auditing included   The economic collapse is merciless in its revelations of failure, whether evidencing spineless regulation, ignorant policy-making, ineffective auditing, incompetent rating or wimpish governance. There’s nowhere to hide – as Warren Buffett puts it, when the tide goes out you can see who’s been bathing naked. […]

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Now we know: the ‘booming’ economy was a huge Ponzi scheme

Now we know: the booming economy was a huge Ponzi scheme Bernard Madoff’s $50 billion Ponzi fraud is now legendary. Yet the fabric on which our entire credit explosion rested was just as illusory as Madoff’s investment fund. It existed in appearance only. The toxic financial instruments, so neatly packaged by investment houses before being […]

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Getting the economy going: cut public sector waste and transform taxes

Getting the economy going: cut public sector waste and transform taxes By now the causes of the economic crisis, and the course of its swift global trajectory, have been explored ad nauseam. But while its bitter consequences are being experienced for a year or three there is much that governments can learn from enforced austerity. […]

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The great credit collapse: what have we learnt

  Sir Thomas Gresham was a formidable figure in the late 16th Century. He built the Royal Exchange, the most fabulous commercial building of its day. Modeled on the Antwerp Bourse, it contained 150 small shops, making it one of the world’s first shopping malls. Yet its chief virtue was that, for the first time, […]

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Communication rather than jargon: what accounting needs

Like the Holy Grail, convergence of financial reporting standards is an ever-receding goal. We may get there one day. But will a unified framework, even with enhanced consistency and comparability, provide investors worldwide with more intelligible accounts? While the harmonization process treads through interminable conceptual minefields, that key question is easily overlooked. Meanwhile, the range […]

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Regulators, rating agencies, accountants, economists: they haven’t a clue.

Accountants are mere recorders, whereas forecasting lies within the province of chartists, economists and strategists. Yet accountants must share at least some of the blame for the lapse in forecasting reliability. After all, investment strategists require indicative source material in the form of financial statements prepared and audited by accountants. The principal justification for today’s […]

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EU politics and accounting extremes: the cure is worse than the disease

The human condition is characterized by periodic swings between lawless permissiveness at one extreme and uncompromising rigidity at the other. Whenever one dominates it falls victim to corrective processes that, in turn, become excessive. Sanity is restored only when the pendulum returns, even briefly, to a position somewhere between. Abuses of vulnerable members of society […]

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Did weird accounting support the credit disaster?

It has been argued that hi-tech accounting wizardry, including the “fair value” principle of valuing current assets at market value, has played a devilish part in the present credit meltdown. After all, it allowed banks to overstate their assets and understate their liabilities with recourse to off-balance sheet “structured investment vehicles” that everyone thought had […]

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Disclosure of auditors’ papers: more misconceived EU regulation

The EU has been at it again. Its Statutory Audit Directive requires auditors ceasing to hold office to give their successors access to all “relevant information” if the successors request it. This misguided dictum is being introduced as an amendment to our Companies Act 2006 and a new Audit Regulation is being drafted. “Relevant information” […]

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Where have all the losses gone? There are no corresponding gains!

I have always assumed that gains and losses balance out in the big picture, assuming the lapse of sufficient time.  If I sell an investment for less than I paid I incur a quantifiable loss.  This does not mean that whoever buys it will make a profit since he too may sell for less than […]

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