According to reports this week, Ernst & Young will be the first of the Big 4 to appoint non-executive directors to its global advisory council.
This is a major move for the accountancy profession.
The profession has been under increasing regulatory pressure for a while now and the decision to appoint non-execs is reportedly in response to the new audit firm governance code that was published earlier this year.
The revised Ernst & Young advisory council structure will in broad terms mean that Ernst & Young will have a board structure which is similar to the multi-national companies that are their clients. Their remit will include monitoring strategy and risk.
Their global advisory council currently includes 36 senior partners. These partners will soon be joined by 4 non-executive directors drawn from the business and regulatory world.
The names of these non-execs will be disclosed later this year and although I’m not a betting man I’d probably have a wager that their CVs will not include the names of Deloitte, KPMG or PricewaterhouseCoopers.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-07-09 10:58:342010-07-09 10:58:34What will make Ernst & Young different from the rest of the Big 4? Will it be an Executive Decision or...
Steven Perkins, a 34 year old commodity broker, attended a company golfing weekend, had a bit too much to drink over the weekend and then took the Monday off of work.
This in itself didn’t justify being fined £72,000 earlier this week by the Financial Services Authority (FSA) and being identified as “an extreme risk to the market when drunk”.
It was what he did on the Monday evening that caused all the excitement.
After the golfing weekend, Mr. Perkins felt the need to carry on drinking and started drinking again on the Monday lunchtime. Late that night in a drunken stupor he bought 7 million barrels of oil using $520 million dollars belonging to his then employers PVM Oil Futures.
Because the purchases took place in the middle of the night other traders around the world thought that there was something major happening in the oil market and as a result the price of oil shot up by $1.50 a barrel in less than 30 minutes. Through the alcoholic haze Mr. Perkins gradually increased his bidding price each time to push the price up until at one stage he was responsible for nearly 70% of the global market volume.
He tried to gradually sell down his position in the morning but no doubt with a very dry mouth eventually admitted everything to his employer.
His drunken night time purchases resulted in PVM losing £6million, him being fined £72,000 and banned from the industry for five years. Plus of course, an almighty hangover.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-07-02 12:30:022010-07-02 12:30:02You know you've had too much to drink when your eyesight goes blurry, you slur your words and you spend half a billion dollars...
So then, England’s football team are back home following their worst defeat in a World Cup ever. As an Englishman, I care about this very much, but I’m trying to be brave about it.
Germany deserved to win. They played better and importantly played as a team. England were fragmented and dreadful.
But the official score of 4-1 was rubbish. The second goal went over the line by about a whole metre. Unfortunately, FIFA “disallowed” the goal because the linesman didn’t see it and they refuse to install goal line technology. The official reason for this is that many countries can’t afford that technology, which is doubtless a fair argument. But surely countries that can’t afford expensive “Hawkeye” style equipment that the major tennis championships use could still afford to pay a responsible person to stand by each goal line through the match and call when a ball goes over the line? This feels like very poor judgement.
In the UK at the moment, we’re questioning three things in connection with the World Cup.
1. How can England have been so bad? There are no immediate answers to that.
2. How can FIFA possibly believe that their reputation can be held intact when they refuse to listen to the reasonable arguments of so many stakeholders?
3. How is it that the England manager (Fabio Capello) can be entitled to a £12 million severance package if he’s fired next month? His team’s performance was a dismal failure, so surely he should go. £12 million is what’s technically known as “an awful lot of money to pay a loser”.
It feels to me that the Football Association in the UK could benefit from a reading of the ACCA paper P1 notes. Executive remuneration being linked to performance and ease of firing a non-performing executive (Fabio Capello) and how to protect reputation (FIFA).
We’ll give them a course free if they want it. They both need it.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-06-30 07:36:232010-06-30 07:36:23Fabio Capello's comedy version of Sydney Pollack's classic film "Out of Africa" was complete and utter...
Ten years ago former accountant Mr. Christopher Timbrell became former accountant Mrs. Christine Timbrell.
Christopher had surgery to alter his gender and became Christine but still remained married to his wife, Joy.
Yesterday, three Appeal Court judges in the UK gave a ruling which links to a number of discrimination issues.
Under 2004 legislation, as a transsexual Christine is entitled to enjoy the full status of her gender. However, married transsexuals are only allowed to have their gender recognized if they dissolved their marriage. This is where the problem for Christine occurred as although she had the sex change operation she still remained happily married to her wife Joy and they didn’t get divorced.
This meant that Christine was still treated as a man for pension purposes and therefore became entitled to a pension at 65 rather than at 60 which is when a woman becomes entitled to a pension.
Christine argued that she was a woman and it was a violation of her human rights to be forced to get divorced to become entitled to a pension at 60. The three Appeal Court judges found in Christine’s favour and also added that she was a victim of discrimination.
Christine, aged 69 who has two children with Joy from before the sex change operation, will now receive backdated pension payments going back to when she was 60.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-06-25 11:39:402010-06-25 11:39:40An accountant can make 65 become 60 but it takes rather extreme measures.
I often believe that society at large does not get best value for money from auditors.
That’s not to say that we deliver bad value for money. Quite the contrary in fact; audit work does not attract especially high fees, has high costs of provision and very high insurance costs as a result of fairly high risk of litigation.
All of these factors conspire to mean that audit work is often not undertaken by smaller firms of accountants at all – the risk/ return profile is just not good enough.
Today, I noticed that the UK government had committed to spending up to £10 million for urgent research by eminent scientists into why the population of bees and other pollinating insects is rapidly falling. Answers are needed soon – bees play an essential role in the food chain that we all depend on.
There are significant amounts of money spent on government research and enquiries. For example, the results of an enquiry into the “Bloody Sunday” killings were announced last week. This enquiry had reportedly cost £100 million in fees, with a further £91 million in disbursements. It had also taken fourteen years to reach its conclusions.
Now, I rather doubt that most auditors have the scientific skills necessary to determine the reason for bees’ decline, but I suspect that they do have the skills necessary to identify the key assertions by witnesses to the Bloody Sunday killings, obtain and evaluate sufficient, appropriate evidence and then reach a conclusion.
This process is often known by an alternative name of “auditing”. Our skills are already used in forensic investigations. I wonder why people don’t think to use us in other situations where establishing facts is so critical?
With our innate focus on VFM audit and the natural sense of urgency that comes from having to report on financial statements within a matter of months, I can’t help but wonder if auditors would have been able to do the job for less than £191 million and sooner than fourteen years.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-06-23 22:20:442010-06-23 22:20:44Auditors are good at lots of things but could we spot what's happening to the bees?
So the World Cup is in full swing but what got all the publicity yesterday involved a team of attractive female Dutch fans rather than a team of footballers.
36 young blond Dutch fans wearing bright orange mini-dresses were removed from the stadium at half time and two of them were arrested and then released on bail.
But what exactly was their crime and why all the media attention?
Their crime was that they were alleged to be part of an ambush marketing campaign by Bavaria, the Dutch brewer.
Ambush marketing is where companies which are not official sponsors of tournaments aim to get their marketing message across without making any payment to the tournament organisers.
The mini-dresses the ladies wore were promotional dresses provided by Bavaria in the run up to the tournament and when they all started clapping and swaying in unison in these dresses they understandably attracted a lot of attention. Unfortunately for them this attention was not only from the world’s press but also FIFA representatives that were on the lookout for ambush marketing.
Anheuser Busch’s Budweiser is the official beer of the tournament and no other beer company is allowed to promote itself within World Cup stadiums. FIFA receive significant amounts of money from official sponsors and therefore are keen to protect their sponsors.
Another example of ambush marketing involving a major sports tournament was at the 2009 British Golf Open. Hugo Boss sailed its corporate sponsored yacht just off the coast of Turnberry, Scotland where the golf course was located.
As a result of this the BBC who were filming the golf had little choice but to show the Hugo Boss yacht in the background of a lot of shots. Great advertising for Hugo Boss!
Back to the Dutch girls and the 2010 World Cup though and it’s safe to say that whatever the outcome of this situation it’s no doubt been a success for Bavaria. More people have now probably heard of Bavaria beer as a result of the arrests than if the girls had just been left in the stadium to sway and clap in unison and enjoy the rest of the game!
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-06-16 11:43:142010-06-16 11:43:1436 attractive Dutch ladies, Hugo Boss and an ambush. It's all happening at the World Cup.
Sarah Ferguson, the Duchess of York and former wife of Prince Andrew, has been in the news for all the wrong reasons.
Evidence came to light last week of the former member of the British royal family accepting money in used bank notes to arrange access to her husband ($40,000 as an initial payment of an agreed total of £500,000). Many people were shocked as taking money to arrange access to people in influence could look like corruption.
The Duchess of York (no longer referred to as “Her Royal Highness” following previous run ins with the more senior royals) may be in greater trouble than the public relations mire and financial trouble that she admits to being in.
If the Duchess was not planning to include full and frank disclosure of the cash received (or what some people may call “bribes”), she appears to have been engaging in activity that could look like money laundering. Accepting payment in notes and coins is often fairly good evidence of wanting to disguise the origin of the funds.
Now whilst money laundering shouldn’t normally be an issue for an ex-Princess, money laundering is big news for professionals, especially professionals practising in the European Union. The EU’s third Directive on money laundering requires that all accountants and tax advisors are effectively trained in detection of money laundering.
Penalties for non-compliance with this can be severe. Money laundering, or facilitating money laundering, under UK law can carry a criminal sanction of two years’ jail time.
This could be an interesting bit of gossip to follow for students! Maybe the Duchess should use some of those used bank notes to engage the services of a good lawyer?
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-05-31 05:08:282010-05-31 05:08:28The “Princess and the Pea” is a famous fairy tale but should there be a new version called the “Princess and the Pound Notes”?
Lots of people have used the social networking site, Twitter.
On average there are reported to be somewhere in the region of 25 million “tweets” (entries) per day.
Paul Chambers, a trainee accountant in the UK made a tweet in January which resulted in him ending up in court this week after being charged with sending a menacing electronic communication. He ended up paying a fine and costs of £1,000.
Back in January of this year he was due to take a flight from Nottingham’s Robin Hood airport but the airport was closed due to snow.
He tweeted: “C**p! Robin Hood Airport is closed. You’ve got a week and a bit to get your s*** together, otherwise I’m blowing the airport sky high!”
It’s debatable whether the conviction was an over-reaction by the authorities or whether Chambers deserved the fine. Either way, he was fired by his employers and has lost his job.
He’s a trainee accountant and it’s not clear what accounting qualification he’s studying for but does a conviction mean that he will be prevented from qualifying as an accountant? The answer is, “not necessarily”.
If for example, you look at the ACCA’s rules on misconduct then a conviction in itself doesn’t automatically mean that he would be prevented from becoming a member of ACCA. It would all depend on the particular facts of each case that is considered.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-05-12 20:06:262010-05-12 20:06:2625 million entries per day, the airport, the snow, the tweet and the subsequent court appearance...
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