Published on: 30 Mar 2011
One of my friends is a TV producer and he’s recently been working on a documentary that just amazed me and I thought you may enjoy hearing of.
In 2007, Gene Morrison was convicted of a number of serious offences, including perjury. The reason for this is that he had successfully posed as an expert forensic scientist for some time, having taken some money from people and having even appeared repeatedly as an expert witness in court.
When I say “some money”, I mean over a quarter of a million pounds.
He was one of the favoured expert witnesses used in the Manchester area by the UK’s Crown Prosecution Service. Why? Apparently he had a good reputation. How reliable is reputation as a way to assess somebody’s competence? Read on…
As my friend was telling me this story, my mind turned to audit standards. In particular, my mind turned to ISA 620 Using the Work of an Auditor’s Expert.
In criminal investigations where forensic evidence is important, it’s clearly necessary to obtain expert testimony. The same applies with specialist areas of accounting that require non-accounting knowledge. Either the auditor can prove the necessary skills themselves, or can commission an expert.
The problem here is that where evidence comes from somebody who is less expert than they claim to be, evidence that appears to be reliable is actually then worthless. Good quality forensic evidence is destroyed by being handled by a charlatan.
Doctor Gene Morrison MSc PhD (or to give him his full list of titles, Gene Morrison) had run his own company, with the grandiose title of Criminal and Forensic Investigations Bureau (CFIB) on the basis that he obtained the work, then secretly contracted it out to unwitting genuine experts.
He collected the cash, claimed the work as his own and kept almost all of the cash. His knowledge of forensic science appeared to come exclusively from the complete box set of the CSI: Crime Scene Investigation TV shows.
Astoundingly, it appears that in the 700 or so investigations where he provided expert evidence, not one lawyer meaningfully verified his credentials. His statement that he was an expert appeared to be enough to be considered sufficient. He appeared as a witness in court many times, somehow bluffing his way through cross examination.
The criminal trial against him was thorough, and the jury found him guilty of 20 of the 21 charges against him.
An auditor following ISA 620 could almost certainly not have been hoodwinked even once by Mr Morrison’s scam. ISA 620 requires an auditor to verify the existence and quality of any qualifications an expert claims to hold. Critically, it also requires that the auditor know enough about the subject material to discuss the matter with the expert and reach a concurring opinion with them. This would surely be impossible with somebody who didn’t know a thing about the subject matter under discussion
He was eventually caught out when privately commissioned by some desperate and grieving parents who wished to know more of the circumstances of the sudden death of their son. Their dissatisfaction with the bewildering contents of his report caused them to conduct some cursory investigation of their own; shortly followed by a phone call to the police.
Mr Morrison was sent to prison for five years.
Published on: 28 Mar 2011
First of all, accountancy student Francois Roberts would no doubt fail the ethics module of his exams.
He’s probably not that worried about it though as he won’t be sitting any exams for several years as last week he was jailed for his part in smuggling £150,000 of cocaine into the UK from the Caribbean.
He pleaded guilty to illegally importing 1.5kg of cocaine into Gatwick airport last year.
Part of Mr Roberts illegal activity involved him transferring £10,000 to the Caribbean island of St Vincent and in a less than impressive attempt at trying to cover things up he initially claimed that the money transfer was for the purchase of a car as opposed to the purchase of illegal drugs.
Despite having a good career ahead of him as an Accountant, Mr Roberts went down the path of smuggling drugs.
The judge sentenced him to 9 years in jail and was quoted as saying “Who would think a young accountancy student would be involved in this way?”
Mr Roberts will have plenty of time to contemplate the answer to that question over the next 3,285 days.
Meanwhile in Russia it’s been reported that a new code of ethics for the State Duma (Russia’s lower house of parliament) has been issued.
The new code of ethics recommends a business style of dress in accordance with “formality, restraint, tradition, and neatness”. The Russian Moskovsky Komsomolets newspaper highlighted that it may mean the end of miniskirts and low-cut blouses for many of the parliamentary assistants.
Whether the new code of ethics will impact on the rate of attendance by politicians at the Duma debates remains to be seen.
Published on: 25 Mar 2011
If you worked for one of the top beer companies in the world and your creative team thought up a stunt that had over 1.5 million live views on Sky Sports, 10 million people viewing the incident on the news the following day and over 5 million internet hits in two weeks then I guess you would feel pretty happy with things.
One of the challenges facing big brands nowadays is how to combine the traditional advertising methods such as TV and newspaper adverts with the more viral components.
Heineken seem to be doing pretty well at combining things though by the look of it.
Heineken arranged for various people including bosses, girlfriends and university professors to convince their employees, boyfriends and students that they had to attend a classical music concert.
Now whilst attending a classical music concert would normally be a very nice thing to do the twist was that the “victims” were all keen football supporters and the concert was due to take place on the evening of the Champions League match between Real Madrid and AC Milan.
The victims were all told in no uncertain terms that they had to attend the classical concert.
The end result can be seen in the video below and was a huge success for Heineken.
Published on: 23 Mar 2011
Most people don’t enjoy paying tax. It’s a difficult balancing act for any government as they need tax revenue to fund certain public services but at the same time they can become unpopular (and hence out of a job!) as a result of excessive personal tax burdens.
Income tax in the UK has been around a long time and its introduction involves their close neighbour, France.
Whilst relationships between the UK and France are very cordial at the moment, this hasn’t always been the case.
Way back in 1798, British forces under the leadership of the Duke of Wellington were at war with Napoleon’s French forces. The cost of the war was weighing heavily on British resources and the national debt was mounting up.
As a result, in 1799 “certain duties upon income” were imposed on a temporary basis with the aim of providing greater “aid and contribution for the prosecution of the war” against Napoleon.
The first rate of UK income tax was 10% and this was applied to the total income of the taxpayer from all sources in excess of £60. Given that the top rate of income tax in the UK is currently 50% I’m sure that some taxpayers would more than welcome the reinstatement of the original rate of 10%!
Interestingly enough though, income tax is still technically a ‘temporary’ tax. It expires each year on 5 April and Parliament has to reapply it by an annual Finance Act.
Published on: 21 Mar 2011
The NASDAQ quoted match.com for example, one of the largest dating websites, recently paid $50 million in cash to purchase the US online dating company OkCupid.
Years ago you would more than likely have met your future partner face to face at some social event whereas nowadays there is a high chance that you’ll meet your future husband or wife on the internet.
The online dating industry is also great at segmenting the market. In addition to the more mainstream sites such as match.com and friendfinder.com there are more niche dating sites out there including for example:
tallfriends.com – where as the name suggests, you can meet tall people;
farmersonly.com – to meet people that work in the farming industry;
scientificmatch.com – which uses your DNA to match you with suitable partners;
stdmatch.net – an online dating site for people with STDs;
meetingmillionaires.com – where yes, they do check your wealth when you join up, and
womenbehindbars.com – where you can meet women that are currently in jail (this has the added advantage of not having to pay for an expensive meal on your first date).
Last month the UK supermarket chain Asda announced that it was moving into the dating business. In a rather unusual extension of their product range they launched asdadating.co.uk which matched single people according to their shopping characteristics.
Users completed a questionnaire about their favourite foods and shopping habits and were then shown individuals that had similar shopping habits. They could literally compare their shopping baskets and find love.
Alas however for those people that completed the survey, the site has since been closed down as it was a marketing project for Valentine ’s Day and turned out not to be a genuine new product launch.
Those people that had completed the questionnaire with a shopping basket showing 7 “meals for one” are no doubt disappointed but the supermarket dating concept isn’t as crazy as it sounds. Could we see one of the other big supermarket chains starting up a real supermarket dating agency in the near future?
Published on: 18 Mar 2011
CIMA and AICPA (the American Institute of Certified Public Accountants) announced yesterday that they were planning to launch a joint venture whereby the two Institutes would create a new not-for-profit venture called the Association of International Certified Professional Accountants.
CIMA members would be eligible to retain their designatory letters of FCMA or ACMA or alternatively use these together with the yet to be released designatory letters of the new entity.
The new venture would cover 550,000 students and members and the board would be split 50:50 between the two bodies although AICPA would own 60% of the organisation. The AICPA was founded in 1887 and has nearly 370,000 members in 128 countries whilst CIMA was founded in 1919 and has 183,000 members and students in 168 countries.
CIMA is strong in Europe, Africa, Asia and the Middle East whilst AICPA is the dominant accounting body in the US so from a strategic geographical fit point of view the proposed joint venture works quite nicely.
George Glass, CIMA President, said: “This agreement would give CIMA and AICPA truly global reach. The new venture would have an unrivalled depth of resources to meet the needs of both organisations and their individual members around the world. We believe that the new qualification designation would prove hugely appealing in mature and emerging markets.”
According to AICPA Chairman Paul Stahlin, “We are delighted and fortunate to be able to work with CIMA as an established global partner that brings a wealth of experience and knowledge to this exciting new proposal. If approved, this joint venture promises to create long-term strategic value for our members and the companies they work for.”
The joint venture is subject to approval by the governing bodies of both organisations and will be voted on separately by both the CIMA and AICPA Councils in May.
Will you be smoking BAT, JTI, Philip Morris or “some brand I can’t see as it’s under the counter” cigarettes?
Published on: 14 Mar 2011
Any government faces a bit of a tricky situation when it comes to smoking.
On the one hand the VAT and duty raised by selling cigarettes helps the government coffers whilst on the other hand there is an increased burden on the health services as a result of smoking related illnesses.
In the UK for example, the 21% of the population that smoke contribute in excess of £10 billion in terms of VAT and duty whilst there are an estimated 80,000 smoking related deaths per year in the UK.
It was national No Smoking Day last week and the government took the opportunity to announce that cigarettes will soon have to be kept out of sight in shops in England. The argument is that when cigarettes are on display at shop counters they tempt certain people to make impulse purchases of cigarettes.
From April 2012 large shops and supermarkets will have to keep cigarettes out of the public eye and store them hidden “under the counter”. Smaller shops will need to do the same in 2015.
It was also announced that a consultation into whether cigarettes should only be sold in plain wrappers without any distinguishing colours, logos or designs will take place shortly.
If a “plain wrapper rule” was introduced this would follow Australia where it has been announced that from next year cigarettes can only be sold in plain wrappers.
Ignoring the rights or wrongs of smoking, this raises an interesting challenge for the tobacco companies as to how they deal with the branding and promotion.
As we speak, these companies are no doubt focusing on techniques for enhancing promotion before the point of sale. The key will be changing the promotion so that people make the purchase decision before they enter the shop rather than rely on impulse purchases.
With cigarette advertising banned in England expect to see these companies developing their brand loyalty via social media such as facebook and twitter as well as viral marketing.
If you’re a smoker who really feels that you need to be tempted or reminded to buy at the counter then one option is to move to Wales, Scotland or Northern Ireland as although these are part of the UK they have separate smoking rules to those found in England and the under the counter rule will not be introduced.
Published on: 11 Mar 2011
A few years ago I was lucky enough to visit Tanzania. It’s a beautiful country with some amazing sights and fantastic wildlife.
Little did I know though that had I visited Tanzania recently I could have been fortunate and quite possibly have seen a frog named after some accountants.
Now I don’t mean “Fiona the Financial Controller” or “Andrew the Auditor”.
No, I mean a new frog that goes by the rather glorious if tricky to spell name of “nectophyrnoides deloittei”.
The “nectophyrnoides deloittei” species, or “the Deloitte Frog” as I’ll refer to her if we ever meet, was first identified back in 2005 but remained officially nameless until it was recently named after the Big 4 company Deloitte in recognition of their support for rainforest conservation work.
The firm has raised over £200,000 in the last year to help preserve the Rubeho Forest in Tanzania.
Heather Hancock, Managing Partner for Innovation and Brand at Deloitte, said “We wanted to demonstrate our commitment to the rainforest, to biodiversity and to the development needs of local people. And we wanted to learn more about how we could make a difference in remote and important parts of the world.”
All in all a very honourable project by Deloitte and congratulations to all those involved.
Published on: 09 Mar 2011
IFRS 2 Share Based Payments has never been a popular accounting standard with many in the business community.
It’s also often unpopular with students, especially the deferred tax elements of it. This is despite the fact that share based payments often provide an opportunity for easy marks (we promise!)
The reason given for finance directors’ dislike of IFRS 2 is often that it involves subjective estimation of the value of share options and other equity-based compensation. This can be complicated and subjective.
Another reason why it’s unpopular might be that it involves stating the full truth of how much executives are actually being paid, including non-cash related rewards.
One person who is feeling the heat of this at the moment is Bob Diamond, who is CEO of Barclays Bank. The bank has just published its remuneration report and it’s predictably controversial.
In an environment where many people, fairly or unfairly, blame perceived greed of bankers for the global financial crisis, CEO remuneration of a salary of £250,000 and a cash performance bonus of £550,000 might be considered brave by many.
But this is only a part of the story.
Once the expected value of equity based remuneration is included, the total figure rises to a bonus of £6,500,000. In the days before IFRS 2, the total reported remuneration would have been less than £1 million. No wonder some directors look on the pre-IFRS 2 days as the good old days!
If a person had invested £100 in Barclays shares on 31.12.05, those shares would now be worth £53. This compares with a profit of 26% on FTSE shares in general over the same period. At a time when shareholders have taken these substantial losses, this type of remuneration is likely to upset investors. This possibly explains why the bank takes up 18 full pages to explain (or perhaps justify) its remuneration policy!
Published on: 04 Mar 2011
Trademarking your name and logo is normally the preserve of businesses but WikiLeaks founder Julian Assange has just submitted an application to trademark his name.
The 39 year old computer hacker who is currently fighting extradition to Sweden over allegations of rape and sexual assault, has recently applied for the trademark on his name through London-based law firm Finers Stephens Innocent.
If the application is successful , he will own the trademark to his name for the purposes of “Public speaking services, news reporter services, journalism, publication of texts other than publicity texts, education services and entertainment services.”
He is not the only well known individual that has trademarked their name. Sarah Palin, the US politician, has applied for similar trademark protection for both her and her daughter Bristol Palin.
Now if any of you happen to be called Julian Assange but are not the Mr Assange that founded WikiLeaks, then don’t worry, you won’t have to change your name. The trademark will only prevent others from advertising and selling the same kind of materials using the Julian Assange name.