Accounting & Auditing Archives - Page 4 of 11 - Emile Woolf writes

Auditors must not disregard the client’s culture

  How to gauge the effectiveness of audits? It is tempting to point to the growing scale of undetected irregularities and outright frauds and conclude that external audits are simply not fit for purpose. Yet there is no objective measure for assessing how much worse things would be without them. What if corporate propriety resided […]

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Paying the price for delusional regulation – at every level

  Legislators and bureaucrats seem incapable of distinguishing idealism from what is achievable in the real world. We saw a couple of months ago that Greece was granted a third bailout after promising its creditors a primary surplus of tax receipts over government spending for the foreseeable future. As expected, its economy then plunged straight […]

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If audits disregard the client’s culture, they are an expensive waste of time

  How to gauge the effectiveness of audits? It is tempting to point to the growing scale of undetected irregularities and outright frauds and conclude that external audits are simply not fit for purpose. Yet there is no objective measure for assessing how much worse things would be without them. What if corporate propriety resided […]

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Correspondence with former student

Hi Richard You are right – I don’t write the articles for the paltry sum that they pay. I write them because that is the only way to sort out my own thinking on these tricky subjects. I learnt that from the late, great, Geoffrey Holmes, editor of Accountancy. Whenever he and I wrestled with […]

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Query from Cyril Solomons, retired manufacturer, on the meaning of “mark-to-market”

Query: “Please explain the meaning of ‘mark-to-market’” Emile’s reply: “If an investing company owns 10 shares of a listed stock purchased for $4 per share, that investment would be shown in the investing company’s balance sheet at cost, i.e. $40, assuming traditional rules that prevailed when I learnt accountancy (“lower of cost and market value”). […]

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Punishment where it belongs

After six months the fall-out from Tesco’s £263 million half-year profit overstatement still reverberates. The FRC now expects companies to give full and fair disclosure of how they account for income in the areas that brought Tesco into disrepute. Ocado is the first to report under the new regime, yet its accounts give no figures […]

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QUESTIONS FOR THE PROFESSION’S REGULATOR

Columnists are spoilt for choice – I could have covered the European Central Bank’s quantitative easing programme (more accurately, “counterfeit”); the Greek anti-austerity surge (“reneging on your debts”); unshackling the Swiss franc (“reality check”) – and I could have thrown in the fact that the examination syllabus for becoming a chartered accountant excludes the word […]

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Perplexing times for economists and accountants

The world of economics and business is riddled with anomalies. For example, the UK is enjoying buoyant GDP growth and low unemployment, yet the excess of government spending over income (the “deficit”) continues to grow. Despite so-called “cuts”, 46% of GDP still goes on public expenditure, of which 60% doggedly adheres to welfare, health and […]

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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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