Well it seems like an EY partner was working late with a client and it was more than the audit files that they were reviewing.
New York stock exchange quoted Ventas Inc has announced that it has removed EY as their auditor due to an “inappropriate personal relationship” between a (now former) EY partner and Ventas’s (now former) Chief Accounting Officer and Controller, Robert Brehl.
It looks like discussing the audit files wasn’t exciting enough for both of them and one thing led to another and before you could say “prudence concept” they were ripping each other’s clothes off having inappropriate personal relationships.
Now, as any self-respecting finance professional will know, a core characteristic of auditing should be “independence”.
[Words deleted so as not to upset people of a sensitive nature] with the Chief Accounting Officer when you’re an audit partner is clearly not a characteristic of independence.
KPMG have now replaced EY as the auditors of Ventas and my guess is that both the ex-EY partner and Mr Brehl will soon get a reminder of what independence means as if they are married their husband/wife will soon be independent of them.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-08-05 11:49:412014-08-05 11:49:41This EY partner has been a bit naughty.
There’s a saying that “money makes the world go around” and as finance professionals we should all have a good solid understanding of the importance of cash flow and treasury functions.
With the recent history of banks failing and the turmoil that is currently taking place in certain European countries there is also the question as to how safe is your money.
Both companies and individuals should therefore make sure that their money is kept in a safe place.
Now, this doesn’t just mean ensuring your bank account is with a reputable bank. No, it also means don’t try and hide your money in a pretty stupid place…
As an illustration of where not to “invest” your money, according to press reports in Australia, a gentleman in Sydney stored his money in what must rank as one of the most stupid places to store money.
Due to the slowdown of the building industry that he was working in, the unnamed individual had been forced to sell his sports car to pay various bills and mortgage obligations.
The individual had just sold his Toyota Supra for AU$15,000 and when he was looking for a place to hide it until he could get to the bank the following day he decided that the best place would be to put the cash into the kitchen oven.
Now let’s just stop for a moment and think. Was this a good idea? Was there any chance that the oven could get turned on, become very hot and as a result the cash become pretty worthless??
Yes, you guessed it.
His wife came home and decided to preheat the oven so that she could cook some chicken nuggets for their children.
20 minutes later and as she went to put the nuggets in the oven she found a pile of melted money (interestingly, Australia has plastic banknotes which last longer than the traditional paper banknotes although not if baked to 200°C).
The gentlemen went to the bank the following day to see if they would replace the damaged money. In some countries the central bank will replace damaged bank notes with new bank notes but it’s unclear how much if anything the individual got back in this case.
So, the moral of the story is if you’re going to put your cash in a safe place then make sure it is safe.
Instead of hiding it in the oven then why not try hiding it in the trash bin…
https://www.theexpgroup.com/wp-content/uploads/2014/07/burning-money.png14112508Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-07-15 00:45:032018-08-24 07:28:19Husband hides money in oven and then wife decides to...
You may laugh but would you really be able to spot the difference between a fully grown 180 kg gorilla and a middle aged man dressed in a gorilla suit?
Now, whilst most of you are probably thinking to yourself that yes, you would be able to tell the difference, unfortunately for an employee of Loro Parque Zoo on the Spanish Island of Tenerife, the Zoo vet didn’t spot the difference.
Any business should ensure that procedures are in place to minimise danger to members of the public. In the case of zoos this includes having practice drills to ensure that if an animal escapes the staff know what to do and have practiced it beforehand.
The zoo started a practice drill where a 35 year old zoo employee was dressed as a gorilla. He then “escaped” from an area of the zoo and the alarms were raised. Unfortunately for the “man dressed in a gorilla costume” the zoo had told all the people involved in the emergency drill that it was a practice except the zoo vet who as soon as he heard the alarm sounds grabbed his tranquiliser gun and proceeded to shoot the zoo employee with a tranquiliser which had been designed to knock out a 180 kg gorilla.
The zoo employee was rushed to hospital where he was treated and fortunately made a full recovery.
Somehow I doubt whether he will volunteer to dress as a gorilla at the next practice.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-06-21 16:27:032014-06-21 16:27:03An easy mistake to make?
In any project it’s important to take a step back and check that important things haven’t been missed.
The French train operator SNCF has just discovered that 2,000 new trains it had ordered are too wide for some of their platforms. The trains cost €15 billion.
The error arose because the national rail operator RFF gave the wrong platform dimensions to the train company SNCF. The national rail operators measured a number of platforms but all the platforms they measured were built within the last 30 years.
Unfortunately, they didn’t measure any platforms which were built more than 30 years ago as these were designed for slimmer trains and are too wide for the new trains to pass through.
It must have been a stressful day in the office when the mistake was identified and the solution to the error will be far from simple. Over 1,000 platforms will need to be adjusted before the new trains can become fully operational.
The total cost of amending the platforms will be more than €50 million.
https://www.theexpgroup.com/wp-content/uploads/2014/06/train-tracks-france.png9431676Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-06-18 16:44:492018-07-05 21:13:06Getting the wrong measurements can be expensive.
It looks like whoever was in charge of recruitment at this Museum didn’t do their job properly. The end result is that the museum is now worse off by $500,000.
When the National Agriculture Museum in the Czech Republic was looking for a new Chief Economist they interviewed Vladimir Prokop. The interview obviously went well as Mr Prokop was offered the job and accepted it to become the new Chief Economist of the museum.
One of the key things that should always be done when recruiting people is to ensure that suitable references and background checks are made.
It looks like in this situation though the reference checks weren’t done properly as Mr Prokop had applied for the job with a fake name and far from having a perfect background for a career as a Chief Economist, his background was that he was a convicted fraudster who was on the run from prison.
He had in fact escaped from prison last year whilst he was serving a sentence for stealing 10 million Czech crowns from the Evangelical Church of Czech Brethren.
He continued this approach to life in his new job and stole $500,000 from the museum.
That was not part of the job description of a Chief Economist.
In fact, far from being a Chief Economist he was more of a Chief Escaper as when the police came to arrest him at his office he managed to avoid arrest by running through the museum exhibition halls, jumping down an emergency exit staircase and then hailing a taxi before escaping.
My guess is that when the museum looks to recruit the next Chief Economist they’ll pay more attention to getting the proper references.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2014-04-10 15:46:472014-04-10 15:46:47The Chief Economist or the Chief Escaper?
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.
The Institute for Religious Works, or as it is more commonly referred to, “The Vatican Bank” has released its first set of published accounts.
The report comprises a hefty 100 pages and contains some interesting figures.
The bank’s balance sheet total was €5 billion and it had a net profit of €87 million in 2012. This was more than four times the profit it had in 2011.
So, what has caused the increase in profit?
The report highlights that the banks economic performance was “driven above all by the development of interest rates in the Eurozone”.
Interest rates fell across the Eurozone in 2012 and the Vatican has nearly €3 billion in trading securities, most of which are government and index bonds. As interest rates have fallen in Europe, the value of the bonds they hold has increased.
A simple example to illustrate the increase in the value of their bonds as interest rates have fallen would be if they held a bond with a nominal value of €100,000 with a fixed interest rate of 4% they would be guaranteed to receive €4,000 of interest. If the market interest rate subsequently fell to 2% they would still be entitled to receive the fixed €4,000 of interest. The fact that interest rates are now only 2% means that the bond would have a market value of €200,000 (i.e. to get €4,000 of interest at a 2% rate you would need to invest €200,000)
As a result of the fall in interest rates the value of the Vatican’s fixed income holdings is up by in excess of €50 million.
The report also reveals the bank had €41 million in gold, coins and other precious metals, a stake in an Italian real estate company and it received two inheritance properties worth approximately €2 million.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-10-29 20:34:222013-10-29 20:34:22The Vatican Bank publishes its first set of accounts.
A school in the UK where a number of top footballers went to when they were children has banned leather footballs for health and safety reasons.
Malvern Primary school in Liverpool where England and Liverpool player Steven Gerrard studied has just announced that in order to reduce the risk of injury to children whilst playing football at break-times leather footballs will be replaced by foam sponge balls.
Whilst health and safety is vitally important for both private companies and public institutions such as schools there will be a lot of people who will feel that maybe this is a step too far.
When I was a child I played football at school with a leather ball and I must admit that I never really felt overly threatened by the ball or exposed to personal danger as a result of (sometimes) being in the close vicinity of it.
Also, if I’m honest I was so bad that I would stumble over the ball whether it was leather or foam.
The argument by the school is that as there are children from the age of 4 to 11 present then there could be a risk of injury if one of the younger ones was hit by a leather ball.
There is also the other view that playing football with a foam ball will discourage children from playing and hence undertaking some form of exercise which as a result could increase the health and safety issues from obesity in children.
Looking on the bright side though, when the 2030 World Cup Finals take place with a foam ball at least England will have a chance of getting past the first round. That is of course as long as it isn’t raining during the finals in case by then they are not allowed to play in the rain.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-09-16 09:46:312013-09-16 09:46:31To be on the safe side, let’s play football without a ball...
The Chief Executive of Microsoft, Steve Ballmer has been in the news a lot recently. Yesterday, he announced that Microsoft had agreed a deal to buy Nokia’s mobile phone business for £4.6 bn.
From Nokia’s perspective it may be the case that Microsoft is the saviour of the company. After all, Nokia once had 40% of the mobile handset market but now is way behind Apple and the various Android devices.
Shareholders in Nokia may have mixed feelings though as the Microsoft deal values the Nokia business at $7 bn whilst back in 2007 the business had a market capitalisation of $150 bn. As they say, it’s all in the timing when it comes to selling shares!
From Microsoft’s point of view the acquisition of Nokia highlights their desire to make sure they have a foothold in the expanding mobile market. They will also enhance their presence in the hardware business to compliment their software business.
As well as the announcement of the purchase of Nokia, Mr Ballmer made another big announcement a couple of weeks ago when he announced that he would be retiring from his job as Chief Executive of Microsoft.
He made his announcement in the evening after the stock market had closed.
Arrivals and departures of key executives of quoted companies is price sensitive information and share prices can move significantly as a result.
Depending on what markets and analysts think of the arrival/departure of the executive, share prices can go up or down.
So how did the market react to Mr Ballmer’s resignation?
When the market opened the day after his announcement Microsoft shares were up 10%.
In other words, investors were pleased with his announcement that he would be leaving!
Was Mr Ballmer upset at this reaction?
Only he knows the answer to this but one thing that softened the blow was the increase in his personal wealth as a result of his decision to leave Microsoft.
He owns 333 million shares in Microsoft and following the increase in the share price as a result of his departure, the value of his shareholding in the company increased by $786 million.
So, by making the decision to leave the company his wealth increased by $761 million.
Now, let’s be honest here. How many of you would “fire yourself” if you could make nearly $1 bn overnight?
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-09-04 14:50:502013-09-04 14:50:50How can you make $1bn dollars overnight?
Any organisation that can create a barrier to entry which prevents new competitors entering the market can, in theory, keep prices high.
Economies of scale (think Airbus or Boeing), branding (think Apple) and distribution channels (think Coke) are all excellent examples of barriers to entry but one of the toughest barriers to break through are government licenses.
If a licence is needed to operate in that industry then that is the ultimate barrier. After all, without the license the company can’t operate.
Japan is the home of sushi and as you would expect some of the top sushi restaurants can be found in Tokyo.
Sushi is fish and we all know that fish is healthy for you. It may come as a surprise then that one particular sushi delicacy in Japan could end up killing you rather quickly if it is prepared incorrectly.
Certain parts of the poisonous blowfish are considered by many to be the ultimate in sushi. It tastes gorgeous although to be honest I’ve never tried it so I’m taking somebody else’s word for this.
I’ve never tried it because I’ve never had the opportunity although even if I did have the opportunity I would have a few doubts. The reason is that as well as the edible parts of the fish, some of the organs of the fish are filled with poison called tetrododoxin which is more deadly than cyanide.
Now, if you’re eating blowfish then one thing for sure is that you want the chef to know what he or she is doing. You don’t want them making a little slip of the knife and including by mistake some of the poison as before you have a chance to say “does this fish taste a bit funny to you?” you would be on your way to a quick death.
The Japanese government have therefore heavily regulated this part of the sushi industry and there are only a handful of locations that have a licence to prepare and serve blowfish.
In October though new laws are coming into place which remove the need for a licence (or to use business strategy terminology, remove a barrier to entry).
So the good news for anyone that fancies trying some of the blowfish is that it’s likely to become a bit cheaper after October. The question though is whether price will be the key decision making factor when people are deciding to eat a meal which if prepared incorrectly could quickly kill you…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2013-07-19 22:54:582013-07-19 22:54:58You can remove this barrier to entry but it may well kill you...
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