Risk Management Archives - Page 2 of 3 - Emile Woolf writes

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. […]

Read More…

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 […]

Read More…

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 […]

Read More…

Auditing banks’ toxic debts

AUDITING BANKS’ TOXIC DEBTS Ever since the financial markets registered their massive tumble in 2008, when Lehman Brothers was left to drown in its swamp of toxic debts, banks’ managements, regulators, rating agencies and auditors have been muttering that banks must rebuild their balance sheets in line with successive Basel capital adequacy criteria. Their auditors, […]

Read More…

Audit Scope: common sense beats rules, every time

The argument about auditors’ contribution to the 2008 debt crisis is still unresolved, and it will remain so until the central question of audit scope is addressed. The traditional perception that auditing has an historic focus merely entrenches its uselessness in the face of a radically altered commercial environment and risk levels that demand a […]

Read More…

Audit scope: we need a Court case to sound a wake-up call

The relevance of any set of accounts obviously wanes as time passes. Vast, complex multinational conglomerates, required by law and market expectations to present published financial statements within strict deadlines, can manage this process if well-governed, but auditing those statements within the same time frame can present even the largest audit firms with serious logistical […]

Read More…

Debt: it’s better not to pretend it can be repaid

When your article will not appear in print until a month after you write it, you must remember that today’s whirlwind creates tomorrow’s dust.  It’s far safer to relate events to principles that, by definition, cannot change. According to Plato, anonymity and honesty are mutually exclusive. Even the most just man, he wrote, would become […]

Read More…

Justice in action: condoning default has a price

In the 6th Century AD, Emperor Justinian undertook the noble enterprise of saving, in writing, all the laws of ancient Rome. His famous “Code” includes the Roman definition of justice: ”the constant and perpetual will to render every man his due”. Since it is rare for any earthly “will” to be constant, let alone perpetual, […]

Read More…