Credit Crisis Archives - Page 4 of 11 - Emile Woolf writes

Clueless Experts

Subject: Re: Martin Wolf on interest rates and QE http://www.bbc.co.uk/programmes/b07krycg [This runs for 42 minutes.] Martin Wolf is the chief economics editor of the Financial Times, a position which should command some respect. The broadcast is an assemblage of comments from bankers, economists and writers, all addressing the complete uselessness of the monetary tricks that central […]

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Economic law trumps accounting rules

‘ACCOUNTANCY’ – JUNE 2016 The term “creative accounting” always carries the pejorative implication that accepted accounting rules are being manipulated to make trading results over a defined period appear to be better (never worse!) than warranted by facts. Perennial rule-tightening is like painting the Forth Bridge – the job is never done. Standards, the building […]

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Proper audits – are they really so difficult?

Regulatory scrutiny is an expensive waste of time and money if it focuses on the form but completely misses the substance. One wonders about the quality of diligence that preceded (and the audit work that followed) Olympus’s takeover of the UK Gyrus Group, when so-called “advisory payments” of $687 million, one-third of the entire acquisition […]

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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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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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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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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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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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You can print money, but not direct its course

Legal claims against top Wall Street banks arising out of the financial crisis have, so far, settled at over $100 billion, and no doubt there will be more. Claims against audit firms for their involvement will surely follow, and it will be interesting to see how far IFRS-compliance will serve as the defence of choice.  […]

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