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

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…

Sovereign bailouts versus economic law: who will win?

The Queen’s question about the credit crisis was wonderfully simple: “If these things were so big, why did no one see them coming?” The answer given by Mervyn King, governor of the Bank of England, in his recent interview is that many people did see the crisis coming, but no one knew when. The same […]

Read More…

Clear? Coherent? Transparent? Intelligible? How would you describe our reporting standards?

UK accounting standards are celebrating their 40th birthday: Statement of Standard Accounting Practice No.1 on associated companies was issued in 1971. The initiative was given a boost in 1973 following exposure of Robert Maxwell’s deceits at Pergamon Press. In a hotly contested takeover battle Pergamon’s share price was supported by accounts that included a wildly […]

Read More…

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 […]

Read More…

Axing the quangos and reforming the tax structure – both are needed

The proliferation of quangos under the previous administration contributed hugely to the deficit that has all but crippled public finances in the UK. Funded out of taxes, they were launched without reference to any democratic process, often in the wake of pointless Whitehall requirements or EU directives. The rash of self-important job creation that gripped […]

Read More…