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

Did weird accounting support the credit disaster?

It has been argued that hi-tech accounting wizardry, including the “fair value” principle of valuing current assets at market value, has played a devilish part in the present credit meltdown. After all, it allowed banks to overstate their assets and understate their liabilities with recourse to off-balance sheet “structured investment vehicles” that everyone thought had […]

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Disclosure of auditors’ papers: more misconceived EU regulation

The EU has been at it again. Its Statutory Audit Directive requires auditors ceasing to hold office to give their successors access to all “relevant information” if the successors request it. This misguided dictum is being introduced as an amendment to our Companies Act 2006 and a new Audit Regulation is being drafted. “Relevant information” […]

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Prescriptive accounts? I’d rather they were understandable

Interpretation of those magic words “true and fair” has long been the subject of philosophical debate.  International Accounting Standard (IAS) 1 requires companies merely to present their accounts “fairly”, which has always been the US formulation.  The IAS regime does, however, insist that any international standard which the EC is proposing to adopt must not be […]

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Qualified Audit Reports: Don’t show them to the FRRP

In June the Financial Reporting Review Panel (“FRRP”) published a Consultation Paper called “Proposal to encourage voluntary disclosure of qualified audit reports”.  The text makes it clear, however, that it is the auditor rather than the company that is being “encouraged” to make voluntary disclosure – promptly, ahead of public filings, directly to the FRRP.  […]

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The consequences of mindless regulation are always heartless

The Institute recently announced its decision to open its disciplinary and appeals hearings to the public and press.  It is said that this accords with the practice of other professional bodies.  Does this mean it is the right decision? I question whether the interests of the member or firm subject to the complaint were adequately […]

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Spicing up the Audit Report will end in tears

A study of the evolution of the form and content of UK audit reports over, say, the past 50 years would make nostalgic but intriguing reading because it would at the same time reflect changing public and investor expectations of the audit function.   Under the Companies Act 1948 audit reports were required, positively, to […]

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Time to give unaudited accounts “compilation” status

Last month I highlighted the deterioration in quality of company accounts on file, linking this phenomenon to the increase in number of companies exempt from audit.   Since the new Companies Act makes no attempt to address this issue the profession’s own Professional Oversight Board (POB) now strongly supports the view that the involvement of […]

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“What the expert witness expects of his legal team”

Having acted as an accountancy expert in a wide range of disputes over nigh on 25 years, I recognise the critical nature of the relationship between expert and legal team in ensuring the smooth running of the litigation process from start to finish. It is obvious that like-minded personalities, particularly if they have worked together previously, have […]

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Audit exemption and worthless accounts

The Professional Oversight Board for Accountancy (“POBA”) was set up pursuant to the Companies (Audit, Investigations and Community Enterprise) Act 2004, itself the Government’s response to a series of corporate scandals that shook investor confidence in company reporting and enforcement.  The Government has delegated to POBA its own powers to oversee and monitor audit regulation […]

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