There’s been a significant reduction in the use of cash during the pandemic. A lot of shops now only accept card payments so that they minimise the handling of cash which could potentially be carrying the Covid-19 virus.
Even before Covid-19 reduced the use of cash though there was one cash note that you were very unlikely to see unless you were involved in some unscrupulous behaviour.
The UK doesn’t officially use the Euro, though there are a small number of shops that choose to accept it voluntarily, and normally at a rather unattractive rate of exchange.
One Euro note that you won’t find however is the €500 note. This rare beast of considerable value used to be fairly commonly seen in countries such as Germany, where it was culturally normal to pay for even large purchases in cash.
The other place that it’s found is in the hands of criminals and money launderers.
Proceeds from serious crime (e.g. people trafficking) are not much use unless they can get into the banking system and from there used to buy nice things like expensive cars and villas in some nice, warm place. Getting dirty money into the apparently clean banking system often involves having a “friendly” bank somewhere that will turn a blind eye to where the funds are coming from.
This does, however, give a logistical challenge to the UK based serious criminal. If one wishes to transport £500,000 from London to a “friendly” bank abroad, it’s necessary to fly and go through pesky things like X-ray machines and customs declarations. Airport security staff are trained to spot the metal strips in bank notes in X-ray machines and alert police to what is likely to be proceeds of crime being moved. The logic is that if the flow of money out can be stopped, the flow of illicit activity in will also dry up.
Enter the €500 note. This wee beast is compact enough that €20,000 can be rolled into the inside of a cigarette packet, which conveniently is wrapped in metal, thus becoming invisible on X-ray machines. It’s about 20 times more compact than the £20 bank note.
The UK government estimated that a full 90% of €500 notes in the UK were used to service serious crime. A number of years ago they changed the law so that the €500 note can no longer legally be sold in Britain.
If you happen to find a cigarette pack full of €500 notes then the good news is that although the European Central Bank stopped production of new €500 notes back in 2019 any circulating €500 notes remain legal tender.
The bad news I guess though is that whoever the cigarette packet belonged to may well come looking for you.
https://www.theexpgroup.com/wp-content/uploads/2010/05/500.png6741204Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2021-12-14 02:59:512021-12-30 13:12:40There’s a 90% chance…
I think the education and knowledge that you acquire both during your studies and continuing professional education are fantastic.
At the start of my career when I worked for one of the Big 4 I spent several years in the Audit department and this was a great opportunity to find out how a variety of different companies worked.
Sometimes though it has to be said that the term “auditor” doesn’t always have the most exciting of images to the general public. People may think that an auditor is merely somebody who checks other people’s work.
To be honest though a simple piece of rebranding whereby “auditors” were known as “financial detectives” would go a long way to removing some of the negative perceptions that some people have in terms of the excitement of the profession and could create a whole new generation who want to become auditors financial detectives.
Now, whilst most people have heard of the term “auditor” a lot of people don’t really fully appreciate how it works.
The Institute of Chartered Accountants in England and Wales (ICAEW) have got a website called “True and Fair” which in their own words aims to “help you find out anything you would like to know about the process known as audit – or to use its full title “Audit of Financial Statements”.”
I think it’s an excellent site and if you are an auditor and want friends or family to find out what your job entails then you should direct them to it (although admittedly if you’re on a first date with somebody and they ask you what you do then maybe say you’re a financial detective).
For any of you that are attempting an ACCA or CIMA paper with an auditing content it also makes for very good background reading.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-07-25 20:31:362014-07-25 20:31:36You’re not an auditor, you’re a financial detective…
I was having an interesting discussion with a group of students on Friday about a previous blog entry concerning “truth and fairness”.
It’s important to remember that an auditor does not make an absolute promise of accuracy.
The existence of audit risk means that a competent auditor will occasionally issue an audit opinion that proves to be inappropriate; most frequently because an unqualified opinion has been given when a qualified opinion would have been more appropriate.
We stake our reputation as a profession on perceived failures being very rare. This means that we need to make sure we’re using tools that are up to the task.
In order to state whether financial statements give a true and fair view, it is necessary to have a system of GAAP that adequately defines truth and fairness. It appears that the spectacular failure of Lehman Brothers in the USA happened as a result of window dressing financial statements, but which complied with US GAAP.
In a highly globalised market for audit services, perhaps we need to more explicitly state true and fair as true and fair (EU) and true and fair (USA)? This is attempted already within ISA 700 by stating “..true and fair view in accordance with…[insert system of GAAP]”.
However, reputational damage happens to the profession globally as a result of perceived weaknesses in one nation’s system of GAAP.
Maybe we need to amend the wording of the audit opinion to make this clearer?
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-02-10 04:22:142014-02-10 04:22:14It may seem obvious that auditors sell audit opinions. But that’s like saying top restaurants only sell calories.
Japan is famous for the long hours that some of their office workers undertake but there is now an invention that will maybe ease things a little bit for hardworking office staff.
A new tie called “Nemuri Tie” is now on sale in Japan.
Nemuri Tie means pillow tie in Japanese and if the advertising is anything to go by it will enable hard pressed office workers to grab a quick sleep at their desk.
It’s a relatively simple design in that it’s a normal looking tie but it’s got an inflatable pillow in it which can be blown up to provide a handy place to rest your head when you fancy a nap.
It can be inflated when the user is wearing it so there’s no need to keep on taking your tie off and putting it back on every time you fancy a sleep.
The Sleep Tie is currently on sale for just under £20.
It’s not clear whether the tie is stain proof for anyone that dribbles in their sleep.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-02-06 00:59:362014-02-06 00:59:36Do you ever feel tired at work? If so, then maybe you should…
Have you ever dropped a cup of coffee at work? What about spilling a glass of water?
Maybe a more interesting question to ask a forklift truck driver that (currently) works for the Kerry Logistics in Australia is “have you ever dropped a container full of 462 cases of a customer’s wine that were worth £664,000 and all the bottles were smashed?”
Unfortunately for this unlucky forklift truck driver the answer is yes.
The container held 2010 Mollydooker Velvet Glove Shiraz bottles of wine produced by winemaker Sparky Marquis which sell for £122 each.
Mr Marquis told reporters that he was “gut wrenched” that the wine bottles had been smashed. The container held one third of his winery’s annual production and was destined for delivery to the United States.
There are two important business lessons to be learnt from this.
Firstly, always make sure that valuable items are insured. Sensibly the wine was insured so the winemaker won’t be out of pocket.
Secondly, there’s no harm in having a sense of humour.
Mr Marquis was quoted as saying that when the logistics company opened up the container “they said it was like a murder scene.” With a touch of classic Australian humour he added “but it smelled phenomenal”
Author Robert Louis Stevenson once wrote “Wine is bottled poetry”.
I can imagine the words that came out of the forklift driver’s mouth when the container was dropped were anything but poetry.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-06-08 04:34:462013-06-08 04:34:46Look on the bright side. At least it smells nice…
An ex-partner at KPMG has been a bit naughty. In fact, he’s been more than a bit naughty as he’s been accused of insider trading.
Insider trading is the illegal activity of using information which isn’t in the public domain to make a personal gain or avoid a personal loss.
Scott London was a partner at KPMG in the US and led their LA audit practice. Two of their major clients were the nutrition supplement giant Herbalife and the leading footwear company Skechers.
It’s been alleged that Mr London passed on price sensitive information to a golfing friend of his who then subsequently made more than $1.2 million in illicit trading of shares ahead of merger or earnings announcements (in other words, the golfing friend bought shares at a low price knowing that the share price would increase as soon as the information he was secretly given was released into the public domain).
The US Securities and Exchange Commission charged Mr London and his golfing buddy with insider trading on non-public information.
As soon as KPMG found out about this Mr London was fired and quickly became an ex-partner in the firm.
A statement from Mr London was published in the Wall Street Journal where he apologised “for any harm that results to KPMG”. He went on to say that “I regret my actions in leaking non-public data to a third party regarding the clients I served for KPMG”.
It’s not looking very good for Mr London as the authorities will no doubt come down heavily on him.
It’s unfortunate for KPMG as well as due to Mr London’s illegal activities their independence on the audits of Herbalife and Skechers had been compromised. As a result they have resigned as auditors of both Herbalife and Skechers.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-04-23 19:54:312013-04-23 19:54:31An ex-partner of KPMG has been a bit naughty…
She is one of the most successful authors in the world and has sold over 100 million books featuring the character Dr Kay Scarpetta. She’s earnt a lot of money from her writing and has estimated earnings from her writing career of £300 million.
In the 4 years to 2009 alone she earned more than $40 million but when she checked her records from her accountants that were looking after her affairs, the famous author Patricia Cornwell found that her fortune was reduced to just $13 million.
As a result of this discovery the author sued her advisors Anchin, Block and Anchin, a New York accounting company for negligence and breach of contract.
Amongst other things she argued that her accountants had borrowed millions of dollars in her name without telling her, that money from the sale of one of her Ferraris was unaccounted for and she had had to unnecessarily pay taxes of $200,000 on the purchase of a private helicopter.
Perhaps the most important claim by the unhappy author was that the negligence caused by the accountants was so distracting that it caused her to miss a deadline for writing one of her books. This missed deadline cost her $15 million in non-recoverable advances and commissions.
One of the fundamental principles of codes of conducts for accountants around the world is “professional competence and due care” and although I haven’t followed this case in detail it does seem that the accounting company involved hasn’t followed this principle particularly well.
Ms Cornwell’s case against her former advisers reached a conclusion this week in Boston over in America and the judge presiding over the case agreed with the author and she was awarded $51 million for breach of contract and negligence.
After the drama of this court case I wonder whether we’ll see one of Patricia Cornwell’s future murder mystery novels involve the victims being accountants that lost a lot of money for one of their clients…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-03-18 18:53:242013-03-18 18:53:24Will her next murder mystery novel involve an accountant?
Fast food is big business but for Subway, the world’s largest restaurant chain with 38,000 restaurants in 100 countries, something isn’t quite big enough.
Subway is famous for their “Footlong” sandwiches whose name implies should be a foot long (12 inches / 30 cm).
Their “Footlong” has been the backbone of their advertising for a number of years and any company’s advertising should be accurate and shouldn’t be misleading.
Well up step Australian Subway customer Matt Corby who purchased a Footlong and measured it before eating it. He then took a photo and posted it on Subway’s Facebook page with the request “subway pls respond”.
The photo is shown above and as can clearly be seen the Footlong isn’t in fact a foot but is 1 inch short at 11 inches.
Was this evidence that Subway had been deliberately misleading their customers by calling it a Footlong when it should have been called an “11 inch long”?
Does the extra inch matter?
Well, things took off quickly on Facebook and there were soon more than 100,000 likes and over 5,000 comments to Matt’s post. The shock discovery that the Footlong was an inch short of bread soon spread around the world.
Subway quickly supplied the following statement to the Chicago Tribune newspaper:
“We have redoubled our efforts to ensure consistency and correct length in every sandwich we serve. Our commitment remains steadfast to ensure that every Subway Footlong sandwich is 12 inches at each location worldwide.”
Is this going to be a good enough solution to the problem of the missing inch of bread?
Unfortunately for Subway within hours a number of lawsuits were filed in America in connection with the missing inch.
One of the lawsuits filed by Mr Buren from Chicago for example is claiming that the Footlong sandwich product is false advertising and as a result he is suing the company for $5 million.
Now, I’m an accountant and not a lawyer but if he’s successful the $5 million will buy an awful lot of 1 inch pieces of bread…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-01-24 15:19:412013-01-24 15:19:41When is a foot not a foot?
I can therefore say in all truthfulness and honesty that I think Ernst & Young is a great company.
They have some tremendous people working for them and the students I’ve met over the years have all been fantastic.
If I’m really honest and truthful though I have to say that in my opinion there is a bit of a question mark over some of the performances in the video below.
The video was apparently taken at an EY recruitment day event and I’ll leave it up to you to decide whether you think that EY did a good job on the song-writing side of things and whether the employees that joined in with the singing, hand clapping and swaying with such rhythmic precision should stick to doing consulting and client work.
Now to be fair it has to be said that the recruitment event where the EY song was filmed was held 12 years ago so things have no doubt changed since then with the recruitment techniques used. It’s not clear though whether there was a slump in people applying for positions with EY 11 years ago.
Now, all of you that have just had a great weekend and are reading this in the office on a Monday morning, join together and start singing “Oh Happy Days, Oh Happy Days…”
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-01-21 06:52:402013-01-21 06:52:40Should Ernst & Young have done this?
Ok, so he jumped from a height of 39 km (24 miles) and he’s travelled faster than the speed of sound but surely Red Bull was taking more of a risk than Felix Baumgartner.
If you were like me and were one of the millions around the world who last night watched the inspirational (or some would say mad) Austrian break world records by parachuting from the edge of space then I think the risk was surely with Felix.
As I watched it I was so impressed. Not only by the bravery of Felix but also the technology that allowed people around the world to watch live footage from the edge of space.
If you look at some business concepts around the event though there are a couple that spring to mind.
First of all, whilst it turned out to be a huge success for the sponsors Red Bull, if there had been some problems for poor Felix and he didn’t make it back to earth in one piece the negative publicity would have been pretty bad (admittedly not as bad a feeling for Red Bull compared to what Felix would have felt but still pretty bad none the less).
The business risk of undertaking such a stunt by Red Bull would no doubt have been reviewed in detail and numerous precautions put in place. One simple precaution was that the live footage was in fact with a 20 second delay so that in the unfortunate event of something going dramatically wrong, the live feed could be cut before millions around the world saw Felix explode into thousands of small pieces live on TV.
Red Bull is an energy drink that has a brand image of “speed and adventure” and have sponsored numerous events such as aerobatic flying and extreme mountain biking. This was their most ambitious event yet though and its success has been reported as being equivalent to £100 million of advertising spend.
In other words, the publicity that Red Bull got from the event was equivalent to them spending £100 million on advertising.
The second business issue that occurred to me was that I saw the event live on YouTube and I wasn’t the only one. A record number of 8 million viewers saw the event live on YouTube.
Is this going to be the way forward for viewing live events?
Will more and more events be shown live on YouTube and will more and more people watch things on YouTube?
If you’re working in the strategy department of a TV company for example then you should definitely be reviewing the rise of importance of sites such as YouTube.
On the subject of YouTube I’m delighted that we’ve recently put some free ACCA, CIMA and FIA courses onto YouTube at www.youtube.com/theexpgroup
One thing for certain though is that we will never get anywhere near the number of YouTube views that Red Bull’s historic event received but then again making our videos wasn’t quite as dangerous…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2012-10-15 14:54:082012-10-15 14:54:08Who was taking the biggest risk?
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