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…
The Harry Potter books are a publishing phenomenon. Who would have thought that a story about a boy wizard would be so successful? Here we are more than 10 years after the first film in the series, Harry Potter and the Philosopher’s Stone, and the movies alone have earned more than £4 billion worldwide. Add in the books, merchandise and rights and you have a hefty sum.
But will there be a challenger to the Harry Potter crown?
I’ve just come across another children’s book and forget about wizard characters such as Harry, Hermione and Ron and instead welcome in “Alan the Accountant”.
Author Jinky Fox has produced a book about the likeable accountant Alan and whilst I haven’t yet managed to find a “window of opportunity” to read the book yet it does sound an exciting read.
Publishers Flaneur said that “as a student the author Jinky Fox planned to become an accountant, but was sidetracked into fine art”.
‘The series of books planned for Alan the Accountant will help me examine the exciting world of Accountancy that I turned my back on,’ commented Jinky.
So, as an accountant myself I’m pleased to see this potential challenger to the Harry Potter crown.
As one of the publicity shots for the book shows on the left he even looks like a fashionable accountant when he’s in his trendy pants.
A colleague in our marketing department though joked that seeing as it’s a book for children starring an accountant it will no doubt help children to fall asleep at night.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-07-05 12:10:412014-07-05 12:10:41Forget about Harry Potter. What about Alan the Accountant and his pants?
Now, I’m not talking about the Premier League table where at the time of writing they are 7th in the League and are guaranteed to obtain their lowest points total in a season in the Premier League era. No, instead I’m talking about the Deloitte Football Money League.
Deloitte are arguably the top accounting firm when it comes to dealing with UK football teams and each year they profile the highest earning clubs in the world.
The 17th edition of their report highlights the financial results from the 2012/13 season and it seems that Man Utd falling down league tables isn’t restricted to the Premier League table.
For the first time since the Deloitte Football Money League began they have fallen out of the top 3 big earners in the world. European champions Bayern Munich from Germany, leapfrogged Man Utd into third place behind Real Madrid and Barcelona.
Like most clubs in the top 20, Man Utd did generate more money than the previous year and the financial position going forward in the short term should be ok as there is a new Premier League television contract as well as some lucrative commercial deals present.
The problem could come though if they fail to qualify for the Champions League over the next few seasons. Dan Jones, partner in the Sports Business Group at Deloitte, said: “Consistent non-qualification for the Champions League would be a problem because, in round number terms, it is worth circa €50 million”.
So, it’s potentially a rough couple of years ahead for United.
The top 10 earners according to the Deloitte report are:
1. Real Madrid: €519 m
2. Barcelona: €483 m
3. Bayern Munich: €431 m
4. Man Utd: €424 m
5. Paris Saint Germain: €399 m
6. Manchester City: €316 m
7. Chelsea: €303 m
8. Arsenal: €284 m
9. Juventus: €272 m
10. AC Milan: €264 m
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-03-27 15:18:352014-03-27 15:18:35Are Manchester United getting it wrong?
After getting to know each other 118 years ago in 1896 it’s looking like pwc’s relationship with the Barclays banking group is coming to an end.
Barclays has just released their 2013 Annual Report and the Report highlights that they are putting their audit out to tender and pwc will not be invited to tender.
They put this down to several reasons including being “mindful of investor sentiment regarding external audit firm tendering and rotation” and the fact that “2014 is likely to see new regulation in this area both from the UK Competition Commission (implementing its decision to mandate tendering at least every 10 years) and the European Union (requiring audit firm rotation at least every 20 years).”
Barclays is one of pwc’s major clients and the fees received by pwc were pretty significant.
In 2013 the total audit and non-audit fees paid to pwc by Barclays amounted to £45 million.
Interestingly, the non-audit fees paid to pwc represented 28.5% of the audit fee.
Allowable non-audit services are pre-approved up to £100,000, or £25,000 in the case of certain taxation services. Any proposed non-audit service that exceeds these thresholds requires the specific approval from the Chairman of the Audit Committee before pwc can be engaged.
Barclays said that during 2013 the Chairman of the Audit Committee scrutinised all such requests for approval, particularly those that concerned taxation-related services, and two requests for approval were declined.
Whilst losing the Barclay’s audit is no doubt a £45 million disappointment to pwc, it’s fair to say that the other accounting companies are looking forward to the opportunity of tendering for a £45 million audit.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-03-05 22:23:442014-03-05 22:23:44After 118 years Barclays are saying farewell to pwc.
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.
The results for the UK KPMG partnership for the year to 30 September have been released and they must make pleasing reading for the partners.
The average KPMG partner pay has increased by 23% from £580,000 to £713,000.
KPMG’s profit rose by 27% to £455 million on revenue of £1.8 billion. The firm’s advisory unit made the most money for the organisation with profits of £308 Million.
So, KPMG’s average earnings per partner were £713,000 but how do these average earnings per partner compare with the rest of the “Big 4”?
Figures recently reported in the Times Newspaper, showed that the latest average earnings per partner in the UK based on reported partnership earnings were:
It seems that the longer the name of the Big 4 company, the higher the average earnings per partner.
Last year we saw Ernst & Young re-brand themselves to the shorter name of EY. After discovering that the longer the name of the Big 4 company, the higher the earnings per partner, will we now see EY changing their name back to Ernst & Young?
Thank you to all of you that read our blog during 2013 and also for your nice comments about our free courses (here are our free ACCA and CIMA courses).
Have a great 2014 and all the best from the ExP Team.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-01-02 05:04:122014-01-02 05:04:12How much do Big 4 partners earn?
It just doesn’t matter how good-looking you are, if you work for Ernst & Young then you will never win this beauty competition.
So there I was spending a pleasant evening looking at the eligibility rules for people who want to enter Miss Texas, or to maybe clarify that a bit, the rules for those ladies that want to enter the Miss Texas USA beauty competition.
Now whilst this may be a prestigious beauty pageant where the winner could go on to become Miss USA and if all goes well then Miss Universe, what exactly does this have to do with finance and business? Or to be more precise, what has this got to do with Ernst & Young?
Well, if you look in the rules and regulations and look past the items which neatly ignore certain discrimination issues such as “must never have given birth to a child” and “must be a naturally born female” there is the phrase “No contestant or any member of their immediate family can be employed by …. Ernst & Young, or any of its subsidiaries”.
There you go. It doesn’t matter if you’re the most beautiful lady in the world (or should I say most beautiful “naturally born female”), if you work for EY you’re just not going to win Miss Texas USA.
So, any ideas why EY ladies are not eligible to enter?
It’s nothing sinister and in fact it’s all very ethical. It’s down to the fact that EY are the official vote counters for the contest and to avoid any potential accusation of anything underhand such as deliberate miscounting, EY staff cannot enter the competition.
Looking on the bright side for EY staff though there must be some pretty happy gentlemen who have been selected to work on the Miss Texas USA account.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-10-08 07:05:142013-10-08 07:05:14Ernst & Young ladies – are they good looking enough?
The Public Company Accounting Oversight Board (PCAOB) is the main “watchdog” of the US auditing profession. As part of their quality review procedures they look at samples of audits undertaken.
They have just released their findings for their inspections on the work of KPMG and pwc in the US.
The results of their inspections may surprise some of you as they identified a pretty high number of deficiencies in the work undertaken.
The deficiencies identified were more than the occasional one or two.
In the report on audits performed by pwc for example, the PCAOB found significant deficiencies in 21 of the 52 pwc audits it inspected. That’s just over 40% of the audits sampled.
They inspected 48 audits undertaken by KPMG and found deficiencies in 17 of them (35%).
The PCAOB says that in many of the situations the firms had failed to obtain appropriate audit evidence to support their audit opinions.
For example, during one audit review they found that pwc hadn’t tested the valuation of some financial instruments sufficiently. These financial instruments represented a significant proportion of the company’s portfolio.
If you’re interested in reading the full reports they can be found here:
The PCAOB did point out that that their inspections took place throughout 2012, so the fact that a deficiency was included in the reports didn’t necessarily mean that it remained unaddressed by KPMG or pwc.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-08-29 00:44:282013-08-29 00:44:28How many deficiencies did KPMG and pwc have?
An accounting undergraduate in Australia called Meri Amber has done something pretty unusual when it comes to trying to get a job.
As well as her skills as an accounting undergraduate she’s very talented when it comes to songwriting. In an attempt to get a job with KPMG she’s written her own song called “KPMG Audit Team – Love Accy” urging KPMG to “give her a call”.
She’s also produced the video below showing her love for KPMG.
It seems to have worked as KPMG’s national manager of graduate recruitment in Australia, Rebecca Jones, is reportedly in preliminary discussions with Meri.
Rebecca is quoted as saying “we think it’s a good song. It’s nice to see the industry portrayed in a quirky, unusual way that helps break the stereotypes. [The big four are] all looking for people who are well-rounded and we could definitely work with someone like Meri to show that KPMG is more than just an accounting firm.”
Here’s Meri’s video:
Good luck to Meri in her new career as an accountant or if it doesn’t work out good luck in her career as a singer songwriter.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-08-08 15:55:492013-08-08 15:55:49Would you do this to get a job with KPMG?
GlaxoSmithKline (GSK) is one of the world’s leading pharmaceutical companies. Last year its global revenues were £26 billion and their net income £5 billion. Their drugs include the anti-depressant Paxil (worldwide lifetime sales to date over $12 billion) and the diabetes drug Avandia (over $11 billion).
It seems that all is not well for the company in China though and they appear to have undertaken some less than honest business practices.
It’s just been reported that the company has allegedly been paying bribes and these bribes are pretty significant. Over £300 million in bribes to be precise.
They are accused of paying £323 million in bribes to doctors and other officials in China since 2007 to persuade them to prescribe GSK drugs to their patients. They appear to have paid these bribes in order to win market share and agree higher prices for their drugs.
The Authorities claim the transactions were disguised as payments to “travel agents” who were middlemen who organised “conferences” for doctors. Instead of this money being spent on conferences though it seems that it was given illegally as bribes.
The Head Office of GSK is understandably taking this pretty seriously and the head of their emerging markets department, Abbas Hussain was quoted as saying “We have zero tolerance for any behaviour of this nature.”
He went on to say “I want to make it very clear that we share the desire of the Chinese authorities to root out corruption wherever it exists. We will continue to work together with the [Chinese Ministry of Public Security] and we will take all necessary actions required as this investigation progresses.”
With a reference to their internal controls he said “Certain senior executives of GSK China who know our systems well appear to have acted outside of our processes and controls which breaks Chinese law”.
Somehow, I think GSKs internal control procedures need to be revisited urgently to make sure this doesn’t happen again.
One thing’s for sure though is that this is certainly going to cause a headache for the company and I’m not sure one of their headaches tablets will get rid of the short term pain of this.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-07-23 13:53:362013-07-23 13:53:36Have GlaxoSmithKline employees been bribing doctors?
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