Law Archives - Page 4 of 9 - Emile Woolf writes

Authenticating financial reports: a complete rethink is clearly overdue

  “Accountancy” February 2016 Hercules managed to clean out the Augean stables in a single day. We could do with a Hercules to clean up today’s money-grubbing world – although he may need a little longer: FIFA sleaze; athletics doping scandals; Volkswagen’s emissions-test cheating; drug manufacturer’s bribery charges; leading banks charged with mis-selling, rule-bending and […]

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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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Google & tax – some thoughts

Actions arising from short-term expediency can be tempting. They may hide, but can never negate, the underlying principle. Obedience to the law is a principle that applies even when that law itself appears unprincipled. Google, Amazon, Facebook and others have for many years exploited jurisdictional tax-rate differentials to minimise their liabilities. The style of compliance […]

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PRUDENT ACCOUNTING – NEEDED MORE THAN EVER

Unaccountable accounting began three decades ago. I know, because I was there when it happened. As a member of the UK Auditing Practices Committee (APC), I acted as its observer on the Accounting Standards Committee (ASC). Professional life was simpler then: ASC set the accounting standards, effectively UK GAAP, and APC set the auditing standards. […]

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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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Prudence returns to accounting, but not to the economy

  International accounting standard-setters have at last recognised the error of their ways and relented on the question of prudence, which they plan to re-instate as a fundamental accounting principle. Bank auditors will have to form an independent view on loan recoverability, rather than rely on the potentially biased judgements of management. A regime that […]

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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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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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