KPMG in the UK has been fined by the Financial Reporting Council for what only can be described as pretty poor auditing.
The situation behind the fine involves professional scepticism, or to be more precise, a lack of professional scepticism.
Professional standards define professional scepticism as “an attitude that includes a questioning mind, being alert to conditions that may indicate possible misstatement due to fraud or error, and a critical assessment of audit evidence.”
Or to put into simple words, to question and challenge what the client is saying and not to simply accept what they are saying at face value.
KPMG were fined £700,000 (which was reduced to £455,000 for early settlement) and reprimanded former senior partner for Manchester, Nicola Quayle for a “failure to apply sufficient professional scepticism”. Nicola was also fined £45,000 (reduced to £29,250 for early settlement).
The reason for the fine was because the FRC held that KPMG had failed to obtain and document sufficient audit evidence in relation to supplier-funded rebates.
These were “complex supplier arrangements” and KPMG should have been on alert to pay particular attention to “these types of complex supplier arrangements.”
Claudia Mortimore, deputy executive counsel to the FRC, said: “This is a measured and proportionate package of sanctions, which balances on the one hand the limited nature of the breaches, which did not call into question the truth or fairness of the financial statements, with the fact that auditors should have been on alert to pay particular attention to these types of complex supplier arrangements. Professional scepticism remains at the core of an auditor’s duty and the FRC will take appropriate action where it has been lacking, as in this case.”
This event took place back in the 2015/16 financial year and KPMG in the UK released a statement saying:
“We regret that specific aspects of our audit of this company for the 2015/2016 financial year did not meet the required standards.
As the FRC makes clear, there is no question as to the truth and fairness of the financial statements. Audit quality is of paramount importance to our firm and we have updated our audit processes and procedures to address the areas of concern.”
Deloitte has stated that Manchester United are better than Liverpool.
Now before anyone starts getting concerned that Deloitte are moving away from finance and becoming football pundits, I should stress that I’m referring to the Deloitte Football Money League.
Deloitte has been compiling the Football Money League since 1996/97 and the League lists the top 20 clubs in the world for revenue in a football season. They have recently released the figures relating to the 2018/19 season and a few records were broken.
The combined revenue for the 20 richest clubs in the world grew by 11% and reached a new high of €9.3bn (£8.2bn).
It’s a Spanish top two for the second consecutive year. This time though the positions are reversed with Barcelona taking top spot and Real Madrid dropping to second place.
In terms of the fortunes of the eight English Premier League clubs in the table, Manchester United remains in third with revenue of €712m.
United’s closest Premier League rivals, Manchester City and Liverpool, generated revenues of €611m and €605m respectively.
The Deloitte Football Money League measures a club’s earnings from match day revenue, broadcast rights and commercial sources, and ranks them on that basis. The study doesn’t include player transfer fees though.
More details on the report can be found here and the top 10 in the league are:
1 Barcelona €841m
2 Real Madrid €757m
3 Manchester United €712m
4 Bayern Munich €660m
5 Paris Saint-Germain €636m
6 Manchester City €611m
7 Liverpool €605m
8 Tottenham Hotspur €521m
9 Chelsea €513m
10 Juventus €460m
https://www.theexpgroup.com/wp-content/uploads/2017/01/football-report.jpg476847Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-03-20 00:24:002020-03-20 12:09:43Manchester Utd and Deloitte
Joe Lycett is a British comedian. In fact, I should say that Joe Lycett used to be a comedian because although the person still exists his name doesn’t.
This sounds all very confusing and also, what has it got to do with the leading fashion house, Hugo Boss?
Like most large companies around the world, Hugo Boss defends it’s name when it feels other businesses are using similar names which could cause confusion in the eyes of the consumer.
If for example you decided to set up a clothing brand called “Hugo Bass” I’m pretty sure Hugo Boss would take legal action against you.
Hugo Boss was involved in a high-profile case involving a brewery in Wales called Boss Brewing and in particular two of the beers that it made called Boss Boss and Boss Black.
Hugo Boss took legal action against Boss Brewery but it was held that there was no need for the Brewery to change it’s name.
That was all very well for the Brewery but it cost them a significant amount of money in legal fees to defend the issue in court and for a small business that was challenging.
Joe Lycett wasn’t happy about this and decided to legally change his name as a protest.
His new name is… yes, you guessed it… Hugo Boss.
He tweeted a picture of the official confirmation of his name change and wrote
“So @HUGOBOSS (who turnover approx $2.7 billion a year) have sent cease & desist letters to a number of small businesses & charities who use the word ‘BOSS’ or similar, including a small brewery in Swansea costing them thousands in legal fees and rebranding.
It’s clear that @HUGOBOSS HATES people using their name.
Unfortunately for them this week I legally changed my name by deed poll and I am now officially known as Hugo Boss.
All future statements from me are not from Joe Lycett but from Hugo Boss. Enjoy.”
In what could have been a bit of bad PR for Hugo Boss (the company), they responded well to the new Hugo Boss (formerly Joe Lycett).
They released a statement saying: “We welcome the comedian formerly known as Joe Lycett as a member of the HUGO BOSS family.
As he will know, as a ‘well-known’ trademark (as opposed to a ‘regular’ trademark) HUGO BOSS enjoys increased protection not only against trademarks for similar goods, but also for dissimilar goods across all product categories for our brands and trademarks BOSS and BOSS Black and their associated visual appearance.
Following the application by Boss Brewing to register a trademark similar to our ‘well-known’ trademark, we approached them to prevent potential misunderstanding regarding the brands BOSS and BOSS Black, which were being used to market beer and items of clothing.
Both parties worked constructively to find a solution, which allows Boss Brewing the continued use of its name and all of its products, other than two beers (BOSS BLACK and BOSS BOSS) where a slight change of the name was agreed upon.
As an open-minded company we would like to clarify that we do not oppose the free use of language in any way and we accept the generic term ‘boss’ and its various and frequent uses in different languages.”
https://www.theexpgroup.com/wp-content/uploads/2020/03/Bossbrewery.png6411141Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-03-08 13:39:002020-03-11 14:13:11Would the real Hugo Boss please stand up?
I’m not sure where you work or what your office is like but my guess is that it’s not as historic as where you would work if you were successful in applying for this job.
The Royal Family has advertised for a new Management Accountant to look after the “Privy Purse” (the British sovereign’s private income). The job is based at Buckingham Palace.
Candidates for the job need to be qualified and should have “outstanding problem-solving skills”. They will need to produce management information and financial accounts and the advert promises that “no two days will be the same and the deadlines we work to will stretch you. Yet in all that you do, you’ll rise to the challenge and deliver faultless accuracy and a first-class service to this unique organisation”.
It’s not just a solid knowledge of figures that they require as the advert goes on to say that candidates need to demonstrate that they are “as good with people as you are with numbers, which is crucial given the customer focussed nature of this role”.
Now let’s get down to the exciting part and how much are they prepared to pay for this position?
According to leading recruiter Robert Half, the average salary for a Management Accountant in London is currently £58,100.
The salary that is being offered for the Royal job is £40,000.
https://www.theexpgroup.com/wp-content/uploads/2020/03/queens-accountant.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-02-24 18:04:002020-03-04 21:01:03Fancy working for the Queen?
Over 1 billion consumers are forecast to use cashless payment methods in 2020. Contactless cards and smartphone payments can make payments very easy for an individual and for the retailer it avoids security issues dealing with cash.
A number of shops are moving to “cashless” shops where all the payments have to be made by contactless cards or smartphone apps such as Apple Pay.
Not everyone is happy though as to make a cashless payment you need one important thing.
Namely, a bank account.
Globally, 1.7 billion adults do not have a bank account and whilst you may be thinking that these people without bank accounts are in the emerging markets around the world, that’s not always the case.
New York City, is one of the most famous cities in the world.
According to a recent report by the New York City Department of Consumer and Worker Protection (DCWP), 354,100 households (11.2 percent) have no bank account (unbanked) and another 689,000 households (21.8 percent) have a bank account but use alternative financial products for some banking needs (underbanked).
In other words, 33% of the New York City households are either unbanked or underbanked.
That’s a pretty big proportion and as a result, the New York City Council has voted to require shops and restaurants to accept cash for payments of USD 20 or less.
The law is expected to be in place by the end of 2020.
New York won’t be the first city in the States to ban cashless stores as last year Philadelphia and San Francisco banned them.
Whilst several retail organisations have appeared to be championing cashless shops it’s looking like it won’t be possible in a number of locations around the world.
These organisations may be initially frustrated at being prevented from being cashless but in reality, this isn’t necessarily a bad thing. As well as the ethical debate about refusing to accept people who can only pay in cash, if they did go cashless they would be missing out on a significant part of the population who want to spend their cash, albeit “cash” and not “cashless cash”.
https://www.theexpgroup.com/wp-content/uploads/2020/02/cashless-shopping.png506900Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-02-07 17:44:432020-02-07 17:44:44Cashless or cash?
The price of your chocolate bar may be increasing but to be honest that’s not necessarily a bad thing.
Two thirds of the world’s cocoa (the basis of chocolate) comes from farms in the west African countries of Ghana and Ivory Coast.
Ivory Coast is the world’s top cocoa producer with cocoa products accounting for over half of its export revenue.
Approximately USD 100 billion is spent globally each year on chocolate but the farmers at the start of the supply chain get a pretty small proportion of that figure.
According to the World Bank, 80% of the two million famers in Ghana and Ivory Coast live on less than £2.50 per day.
OPEC, (the Organisation of the Petroleum Exporting Countries) is an organisation that has controlled crude oil output and influenced oil prices since the 1960s and Ghana and Ivory Coast are now introducing what some people are calling “COPEC”.
Under the new COPEC agreement the two countries will charge an additional £300 per tonne of cocoa on top of the traded price (which currently stands at approximately £1,900 per tonne). The aim of this is for more money to filter back to the farmers.
Elsewhere in the supply chain the response has been positive.
A spokesman for Hershey, the largest chocolate manufacturer in North America, was quoted as saying “Cocoa farmers should be able to support their families and earn a decent standard of living”.
So, the next time you’re munching on a chocolate bar contemplating why the price has increased this may be one of the reasons.
https://www.theexpgroup.com/wp-content/uploads/2020/01/cocoa_prices.png450800Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-01-27 20:14:172020-01-27 20:14:18Your chocolate bar may be getting more expensive.
Here’s a question for you – what do you think the average age is of somebody who buys a new Rolls-Royce?
Perhaps surprisingly the average age has dropped significantly over the last decade.
The company has just reported their sales for 2019. Despite the majority of the global car market facing falling sales, Rolls-Royce have bucked the trend.
They have reported their best ever sales with a 25% increase in cars sold compared to the previous year.
In terms of Michael Porter’s generic strategy model, their strategy is a clear differentiation approach. In the words of chief executive Torsten Muller-Otvos, the brand is “rare and exclusive”.
They have also made a concerted effort to appeal to younger drivers (it’s fair to say that these are younger extremely wealthy drivers with their bestselling model the Cullinan starting at £264,000).
The Cullinan was launched in 2018 and it was a radical change for the company. Rolls-Royce had a history of luxury saloon models and the Cullinan was their first SUV 4×4 off-road car.
Mr Muller-Otvos said the increase in sales was in part down to the introduction of “black badge” versions of its cars, where the car was black inside and out.
He was quoted as saying
“This is a cooler, darker, more menacing, edgy proposition, [aimed] especially towards younger clients.”
“Many smart kids around the world building platforms or whatever making a fortune early in their life are coming to us to start investing in a Rolls-Royce”
In total Rolls-Royce sold 5,125 new cars in 2019 of which the Cullinan amounted to 40% (nearly 2,000 cars).
Oh, and in case you are interested the average age of a Rolls-Royce buyer is now 43.
https://www.theexpgroup.com/wp-content/uploads/2020/01/rollsroyce-cullinan.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-01-16 22:01:452020-01-17 11:08:14Rolling in it...
A lot of you may have been on business trips but I bet your trip wasn’t as exciting (and tragic) as this gentlemen’s trip was.
What was also surprising was that his employer was found liable for his death as it was classified as an industrial accident.
The exact cause of death was a cardiac arrest whilst he was having sex with a stranger he had met on the business trip.
Now, whilst having a heart attack during sex with a stranger probably wouldn’t meet most people’s definition of an “industrial accident” a French court found otherwise. The court stated that the employer was responsible for any accident occurring during a business trip and ruled that his family were entitled to compensation.
The man who died on the job, named as Xavier X, was working as an engineer for TSO, a railway services company based near Paris and his employer had perhaps quite reasonably argued that he was not carrying out professional duties when he got into an extra marital relationship with a total stranger in his hotel room.
This opinion though wasn’t accepted by the court and they upheld the view that sexual activity was normal, “like taking a shower or a meal”.
As a result of it being classified as a normal activity on a business trip, the death was considered to be an industrial accident and under French law, partners or children of industrial accident victims receive up to 80 per cent of their salary until what would have been the person’s retirement age, with pension contributions paid from then on.
Picture the scene. You’re one of the largest supermarket chains in the Netherlands employing more than 100,000 people. You’re planning on introducing a new staff uniform. Do you ask people what size uniform they are or do you ask them to upload semi-naked photographs of themselves to an app so that it can work out the sizes?
Yep, you guessed it. The supermarket chain, Albert Heijn asked staff at their Nijmegen branch to upload photos of themselves in their underwear or tight-fitting sports gear.
It was supposed to be a trial to see how it worked before rolling it out to the whole organisation.
Apparently, the idea behind it was that it would be more efficient to load up 100,000 images to an app to analyse the sizes rather than receive 100,000 emails.
Whoever came up with the idea failed to appreciate that not everyone would be keen to load up a half-naked photo to an app run by their employer.
It was not only the staff that thought this was a bit strange as the Dutch Data Protection Authority described it as bizarre saying the company had “no grounds whatsoever to require its staff to do this”.
The news was first reported by the Dutch newspaper NRC who highlighted that a poster had appeared in the staff canteen at the Nijmegen supermarket saying “Wear underwear or tight-fitting sportswear so the contours of your body can be measured as accurately as possible. And ask someone to help you take the photos”.
Now, whilst the person that came up with the idea probably thought this would be an efficient way of getting the sizes, it does remind everyone to always take a step back and ask yourself “is this ok?”
A spokesman for the company said “We have cancelled the pilot and apologised to all involved”.
https://www.theexpgroup.com/wp-content/uploads/2019/12/photos-to-office.jpg9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2019-12-17 22:58:052019-12-17 23:00:13Would you send a photo?
The Swedish telecommunications group Telefonaktiebolaget LM Ericsson (or Ericsson as most people refer to it as and how my spell checker prefers) is an incredibly successful organisation.
The group provides services, software and infrastructure in information and communications technology.
Oh, and they were also recently fined $1 billion to settle bribery charges.
The company was founded in 1876 by Lars Magnus Ericsson and now employs nearly 100,000 people and operates in around 180 countries.
Not all of these employees were ethical though and Ericsson’s Egyptian subsidiary recently pleaded guilty to conspiracy to violate the anti-bribery provisions of the US’s Foreign Corrupt Practices Act.
This bribery had been taking place for 17 years and was reported to have netted the group business worth more than $400m.
US attorney Geoffrey Berman was quoted as saying “Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that money talks.” He went to say “Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”
The bribery took place in a number of countries. It appointed agents and consultants to bribe government officials in Djibouti, China, Vietnam, Indonesia and Kuwait.
One example of the techniques involved was in Kuwait where an Ericsson subsidiary agreed a payment of approximately $450,000 to a “consulting company”.
No consulting actually took place but a fake invoice for the consulting services was issued to Ericsson.
As a result of this payment, inside information about a tender for the modernisation of a state-owned telecommunications company’s radio access network in Kuwait was obtained.
The end result was that the modernisation contract, which was valued at $182m, was awarded to an Ericsson subsidiary. In return Ericsson paid the $450,000 to the consulting company and improperly recorded it in its books as consulting fees rather than as a bribe.
IRS Criminal Investigation head Don Fort was quoted as saying that “Implementing strong compliance systems and internal controls are basic principles that international companies must follow to steer clear of illegal activity. Ericsson’s shortcomings in these areas made it easier for its executives and employees to pay bribes and falsify its books and records. We will continue to pursue cases such as these in order to preserve a global commerce system free of corruption.”
https://www.theexpgroup.com/wp-content/uploads/2019/12/ericsson-bribery.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2019-12-09 21:43:002019-12-10 21:45:53Ericsson fined $1 billion for bribery.
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