Negligence & Liability Archives - Page 4 of 5 - Emile Woolf writes

Can rules-based accounting facilitate fraud? Enron revisited

We are approaching the tenth anniversary of the collapse of Enron. Have the lessons been learnt? Enron was the US energy giant that failed only 12 months after its share price rated it seventh largest corporation in America. A handful of tenacious journalists penetrated the miasma of filed data and revealed that the bulk of […]

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Psychosis grips British banking. Yet who will break the deadlock?

I have written regularly on banking folly – a subject everyone now knows to be inexhaustible. In Accountancy, March 2005, I wrote: “The size of the credit mountain is without precedent…… should we ask whether it is sustainable? Or should we worry?” I noted that five of Britain’s top-10 companies were banks, compared with none […]

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Back to square one: Accounting safeguards do not work

The most sombre issue to emerge from the world’s current financial woes is that of trust. Putting it succinctly, who can you trust in markets where it pays to deceive? it was all in conformity with existing EU accounting rules.. Take Greece’s desperation to sell its bonds to reduce the size of the European bailout. […]

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Behind the words, public sector waste lies hidden

Whose analyses, explanations or remedies can you trust? One of the most valuable insights to be gleaned from a pukka crisis is how inexpert the experts are. It was Irving Fisher, the great Professor of Economics at Yale University, who declared: “Stock prices have reached what looks like a permanently high plateau.” He said that […]

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The cycle of litigation – be warned

Litigation warning – remember the cycle!  The pattern of litigation tends to be cyclical since it shadows the economic cycle. When there is general prosperity and businesses flourish there is still plenty of litigation (when is there not?) but its character reflects boom-time activity. Businesses buy other businesses and then claim that they overpaid. Although […]

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Reflating the banking bubble while the real economy lags

How sustainable is the alleged economic recovery? A brighter outlook certainly appears to be in evidence in parts of the City. Construction work on glitzy office buildings has resumed. A stroll through the Royal Exchange takes you past packed wine bars, expensive restaurants and boutiques displaying the most opulent array of branded merchandise – jewellery, […]

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Reforming banks’ governance is not possible without real sanctions

The reforms recommended by Sir David Walker for the governance of banks would, if implemented, impose a huge moral responsibility on executive and non-executive banking directors alike. The will to exercise independent judgment without regard to personal advantage – whether money, power or status – is a rare commodity in commercial life, and it cannot […]

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End hypocrisy: only a culture change will achieve G-20 goals

  In the midst of G20 euphoria who can assess the effectiveness of its efforts to stabilize the economic turmoil? When the dust settles it will be people, not governments, who decide how successful the sweeping measures have been. Confidence, after all, is a feeling – and it’s beyond government control. Only when confidence returns […]

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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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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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