That’s an interesting question and I’m sure that along with most other professions there are people you can trust and people you can’t trust.
If I asked the question about trusting accountants to the rock band Deep Purple though I’m pretty sure what answer I’d get.
Dipak Shanker Rao looked after the accounts of Deep Purple for more than 20 years.
In fact, to be fair when I said that he “looked after” the accounts maybe I should have said that he siphoned off more than £2 million of the band’s money without their permission.
Mr Rao has admitted “borrowing” at least £2.27 million from two of the companies within the Deep Purple empire. HEC Enterprises and Deep Purple (Overseas) owned the copyright to a lot of the band’s songs but the companies went into receivership in 2016.
Out of the £2.27 million borrowed by Rao, only £477,000 has been recovered. Ian Gillan, Ian Paice and Roger Glover (members of the band) are suing Mr Rao for up to £4 million.
In the meantime, Mr Rao has been struck off as an accountant and banned from managing or controlling a company until 2028.
One of Deep Purple’s most famous songs is called “Mistreated” and I’m sure that they feel that way at the moment…
https://www.theexpgroup.com/wp-content/uploads/2018/02/Deep-Purple-Accountant.jpg477848Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2018-02-02 21:23:172018-05-11 07:39:33Can you trust an accountant?
KPMG UK released their results last month for their most recent accounting period and they showed a fall of 10% in pay for the KPMG partners when compared to the previous year.
Although the firm’s revenue rose by 5% to £2.2 billion, it’s profit fell to £301 million.
The firm wrote off a number of technology investments.
KPMG, like the rest of the Big 4, have invested heavily in technology companies in an attempt to stay at the forefront of technology.
Unfortunately for KPMG, not all of their investments were successful. Bill Michael, the Chairman of KPMG, highlighted one investment that hadn’t done so well – KPMG had committed £3 million to Flexeye, a tech company that analyses large amounts of data and it hadn’t proved to be the wisest investment.
Whilst profits fell, it hasn’t all been bad news for KPMG as their audit practice grew by 10%.
Back to the average pay of the KPMG partners though and although their average pay fell by 10% I’m sure that the partners will still be able to afford to buy a sandwich for lunch.
The average pay for the KPMG partners was £519,000 each.
That’s not too bad is it?
But how does it compare with the average pay from the partners of the remaining Big 4.
The most recent reported results show the following average pay per partner:
Deloitte – £865,000
EY – £677,000
pwc – £652,000
It looks like Deloitte partners will be having the more expensive sandwiches for lunch.
https://www.theexpgroup.com/wp-content/uploads/2018/01/KPMG-salaries-1.jpg476846Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2018-01-28 21:37:382018-05-11 07:41:46How much do Big 4 partners get paid?
Sometimes it’s the simple scams that can cause the most damage.
We hear all the time about ignoring scam phishing emails where fraudsters are pretending to be banks to get online bank account log in details but there’s a new scam involving email which is costing some people a lot of money.
The Art Newspaper has reported that at least nine art galleries and art dealers have been caught up by the fraud. The amounts lost to the fraudsters have been significant with amounts ranging from £10,000 to £1 million.
The fraud itself is fairly simple.
The fraudsters hack into an organisation’s email system and look out for emails sending invoices to clients.
For example, if an art dealer has made a sale of a piece of art and then emails the invoice through to the customer for payment, the fraudsters send another email straight after the original email.
This second email looks like it’s come from the art dealer and includes an identical invoice with the only exception being it has a different bank account on it for payment of the invoice. Yes, you’ve guessed it but the bank details on the second invoice are not those of the art dealer but instead are details of a bank account in the name of the fraudsters.
The customer innocently pays the invoice as it looks genuine and as soon as the money is received the fraudsters withdraw the money, close the bank account and are never heard of again.
As far as the art dealer is concerned they are waiting for the payment to be made but the customer has already paid the money but to the fraudster. By the time the fraud is discovered it is too late.
There’s a fairly simple solution to this and ensuring that anti-virus programmes are up to date and email passwords are changed regularly will go a long way in preventing this sort of fraud.
https://www.theexpgroup.com/wp-content/uploads/2017/11/email-alert.jpg477848Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-11-12 13:55:452018-01-26 12:54:20I never emailed you...
The Journal of Consumer Research published the results of five experiments into how the level of background noise can impact on performance when someone is working on creative tasks.
The results are interesting and in simple terms found that a moderate level of ambient noise is better for enhancing performance on creative tasks than both low levels and high levels of ambient noise.
Or put another way, people are more likely to be able to work creatively if there is a medium level of ambient noise compared to where there is silence or loud noise in the background.
So, what lessons can we learn from this if we’re studying?
Whilst the optimum situation and level of background noise is very much a personal preference the science behind it could indicate that we should head somewhere with a mid level background noise.
Now, where could we find such a place?
Well, the local pub around the corner has a great mid level background noise as far as I’m concerned but there are some liquid distractions that will harm studying.
What about a coffee shop or cafe? Again, there would be some great mid levels of background noise but you’ve got to get there and what happens if you don’t find a seat. All of this will dig into your valuable study time.
Well, up step the fantastic website coffitivity.com which enables you to play background coffeeshop noise on your computer whilst you’re studying.
You can’t order a Cafe Latte or Cappuccino but in my opinion it’s a great tool for those who like to study with a non intrusive background noise.
It’s also excellent for people who don’t have any friends to go to the coffee shop with.
https://www.theexpgroup.com/wp-content/uploads/2017/09/study.png7411312Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-09-10 12:13:522017-09-10 12:13:52Does this help you concentrate?
Drinking a lot of gin may not be good for you but it looks as though it is good for the tax authorities.
There’s been a change in the drinking habits of people in the UK.
Gin is suddenly very fashionable, especially the flavoured gin made by smaller distilleries. Last year 40 new gin distilleries opened up in the UK bringing the total distilleries crafting gin to 273.
This has made the tax man very happy. The reason he is happy is that there is a very high rate of VAT and Duty on hard spirits such as Gin compared to less alcoholic drinks such as beer and cider. VAT and Duty on a bottle of Gin accounts for more than 75% of the cost of that bottle and with designer gins such as Death’s Door gin retailing at £55 then that’s a pretty good return for the tax authorities.
This increase in demand for gin has resulted in duty receipts from spirit sales overtaking duty receipt from beer sales last year for the first time.
In 2016 the tax authorities collected over £11 billion from alcohol sales which is an equivalent amount to what a 2p increase in income tax would create.
So, they you go, the next time you wake up in the morning with a hang over from drinking too much gin at least you’ll know that the money you spent has proved a tonic for the government and helped increase their tax receipts.
https://www.theexpgroup.com/wp-content/uploads/2017/07/Gin-duty.png6841220Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-07-24 19:58:502017-07-24 19:58:50Gin and whose tonic?
Picture the scene – you’re the senior auditing partner of KPMG in America with more than 30 years of experience serving some of KPMG’s most prestigious clients. There are over 9,000 KPMG people in the US who look up to you as the boss.
You receive some leaked information about which of your audits the US audit watchdog is going to examine as part of their annual inspection of how well KPMG perform audits.
(a) Disclose this unethical breach immediately, or
(b) Try to keep things quiet and make sure that the audit files of the audits selected are perfect?
Unfortunately for Scott Marcello, the (now ex) head of KPMG’s audit practice in America, he didn’t choose option (a).
The background to the issue is that every year the US audit regulator, the Public Company Accounting Oversight Board (PCAOB) selects a sample of audits to inspect and ensure they have been performed properly.
A former employee of the PCAOB had joined KPMG. A friend of his who was still working at the PCAOB tipped him off about which audits would be selected for inspection this year.
The confidential information was then passed up the KPMG hierarchy until it reached Mr Marcello.
We can only guess what Mr Marcello and 4 other KPMG partners were planning on doing with the leaked information but one thing was for sure and that was they didn’t disclose the leak.
Whilst the 5 partners clearly weren’t very ethical, KPMG as an organisation acted quickly once they found out about it.
The 5 partners were fired and Lynne Doughtie, the chairwoman and chief executive of KPMG was quoted as saying “KPMG has zero tolerance for such unethical behaviour. Quality and integrity are the cornerstone of all we do and that includes operating with the utmost respect and regard for the regulatory process. We are taking additional steps to ensure that such a situation should not happen again”.
The PCOAB publish the results of their inspections and the previous results of the KPMG inspections perhaps give a reason for why Mr Marcello was keen for any help, whether it was ethical or unethical.
In 2014 and 2015, KPMG had more deficiencies in their audits than any of the other Big 4 in America.
38% of their inspected audits in 2015 were found to be deficient whilst in 2014, 54% were found to be deficient.
Professional footballers must have a great life. Playing football and earning significant amounts of money. Oh, and using some very clever tax advisers…
There are serious amounts of money being paid to some of the top footballers. Payments of in excess of £200,000 per week are fairly common (over £10 million per year).
This income doesn’t simply go into the tax return as salary. No, there are far more sneaky/clever [delete as you feel appropriate] ways of minimising the tax liability (or should I say maximising the after-tax income).
One of the methods used to minimise the tax is to make two types of payments to the player.
One would be for playing football whilst the other would be for “image rights”.
“What are image rights?” I hear you say.
Well, the basic idea is that the player would agree to let the football club use his image in any sponsorship or TV deals that the club has.
Without going into too much technical detail, the key difference from a tax point of view is that the payments made to the player for playing football would be classified as employment income and would be taxed at 45%.
Payments for image rights on the other hand would in effect be rental payments for an intangible asset. Players would assign their image rights to a company (where they could be the 100% shareholder) and the company would only pay corporation tax of 19% on the income.
With the globalisation of the Premier League, there are now numerous players who are not tax domiciled in the UK and if their image rights were channelled through a non-UK company they could potentially escape tax altogether.
Given the size of the payments involved there’s a lot of tax at stake. The Treasury in the UK has just initiated a project on players’ image rights and government technical experts will visit all English Premier League, Championship and Scottish Premier league clubs to review matters.
In the meantime, most of the readers of this blog are not professional footballers but instead undertake far more interesting finance and accounting activities in an office. Why not suggest to your boss at your next pay review that you’d like image rights instead of a pay rise so that you can receive more tax advantageous rental income from an intangible asset via your personal company…
https://www.theexpgroup.com/wp-content/uploads/2017/04/football-agents-1.png476846Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-04-11 09:19:072017-04-11 09:19:07I’m not kicking a ball, I’m being looked at.
If by any chance you are in Australia then if I ask you this question in 5 years’ time, as a result of Ailira the answer may well be “no, as no-one works in tax”.
“Who is Ailira?” I hear you say.
Ailira is the brainchild of Adelaide based tax lawyer Adrian Cartland and stands for “Artificially Intelligent Legal Information Resource Assistant”.
Mr Cartland created Ailira to help people with their tax affairs and believes that she could eventually replace human tax agents.
He told the Australian Business Review that “Your tax agents will probably be gone within five years”.
What was interesting was that although to a certain extent Ailira functions like a search engine, you can ask it tax questions in the same way that you would ask a person who works in tax.
Mr Cartland said that “The one thing we had difficulty with is that people are so used to doing keyword searches that they struggle to ask a question as you would to another human.
“So we did some upgrades of Ailira’s interface to encourage people to treat Ailira like a human, more in plain English.”
That’s an interesting phase “plain English” as anyone who has worked in tax or studied tax will appreciate that it’s not always possible to explain tax in plain English as the tax laws can be pretty complex.
Still, good luck to Mr Cartland and importantly, good luck to Ailira who by the sound of things may well be doing a lot of work in the future.
Does your weight affect the amount of money you earn?
That’s an interesting question and researchers from the universities of Strathclyde in Glasgow and Potsdam in Germany have come up with a potential answer.
They analysed data from nearly 15,000 working men and found that men within that the recommended Body Mass Index (BMI) health range earnt more than those who were outside of the range.
Individuals who were underweight on the body mass index were found to earn 8% less than those who were in the top end of the healthy bracket. They found that the effect was more prominent in manual jobs where no doubt the extra strength of the guys in the healthy weight bracket helped increase their earnings.
What was perhaps surprising though was that there was also a difference in earnings in white-collar office jobs. They found that in the more middle-class occupations the rewards peaked at a BMI of around 21.
It wasn’t just men who were impacted though. The study also looked at the weight and earnings of 15,000 German women and found that the slimmest earnt the most and the obese the least.
Jonny Gifford, of the Chartered Institute of Personnel and Development was quoted in the press as saying “it is depressing that, in this day and age, looks are in any way a factor in how much people are paid”.
I have to agree with him as organisations should employ people on the basis of their abilities as opposed to how heavy they weigh.
Anyway, best dash as I’ve got a packet of biscuits to finish…
https://www.theexpgroup.com/wp-content/uploads/2017/02/office-fitness.jpg433770Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-02-03 18:08:122019-03-03 10:34:42Pass the biscuits...
Deloitte has stated that Manchester United are better than Real Madrid and Barcelona.
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 just released the figures relating to the 2015/16 season and a few records were broken.
The combined revenue for the 20 richest clubs in the world grew by 12% and reached a new high of £5.5 billion.
There was a change at the top though as the Spanish club Real Madrid who had topped the table for 11 years were toppled by Manchester United who had revenue of £515 million. This in itself was the highest figure recorded by a football club in a season.
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 Manchester United £515.3m
2 Barcelona £463.8m
3 Real Madrid £463.8m
4 Bayern Munich £442.7m
5 Manchester City £392.6m
6 Paris Saint-Germain £389.6m
7 Arsenal £350.4m
8 Chelsea £334.6m
9 Liverpool £302.0m
10 Juventus £255.1m
https://www.theexpgroup.com/wp-content/uploads/2017/01/football-report.jpg476847Steve Crossmanhttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve Crossman2017-01-30 12:24:132017-01-30 12:24:13Manchester Utd and Deloitte
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