Professional Practice Archives - Page 3 of 6 - Emile Woolf writes

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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Authenticating financial reports: rethink is overdue

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 facilitating tax-dodging. How many […]

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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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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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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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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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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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