« April 2005 | Main | June 2005 »
Maradona's monetary policy
For those of you coming here from the mag looking for an explanation of how Maradona's performance against England in the 1986 Mexico World Cup describes past and current interest rate policy, the story has just fallen off the bottom of the page. You can access it by clicking on the archives for May on the right, or simply click here.
In a galaxy not so far away . . .
Always one susceptible to hype, especially when it appeals to our inner child, TS has surrounded its desk with lightsabers, pictures of Wookies, and all sorts of Star Wars ephemera for the last few weeks.
We suspect that accountants up and down the country have done similar, but one of our readers was particularly surprised by an email they received last week from the ICAEW.
A small message was contained below the ICAEW email footer: ‘Sent via Jedi Hyper Space Enterprises Inc’. One can only hope that the venerable institute never turns to the dark side of the force, although some have suggested that moves to merge the institutes are akin to creating a dictatorial galactic empire. Comparing Paul Druckman and Eric Anstee to Darth Vader and the Emperor, however, is just plain unfair.
FSA to wine and dine profession
The FSA’s announcement that it was setting up a new accounting and auditing sector team must have frightened a few people. Are accountants suddenly to come under its stern regulatory glare? The short answer is no. The FSA is merely setting up a liaison body ‘to strengthen its relationship with the major auditing firms’.
Sounds like the new head of the liaison body and former Deloitte partner Kari Hale will have a good entertainment budget. But TS wonders about the necessity to have someone devoted to this issue.
Soon after we heard this news an email arrived about the watchdog’s ‘ground-breaking study to measure the real costs of financial regulation’, to be undertaken, coincidentally, by Deloitte. TS hopes those writing the report will take into account the costs of their former colleague.
Dressed to impress
As a child, TS liked nothing more than to secretly rummage through our mummy’s wardrobe and try her gladrags on in front of a full-length mirror. Those white stilettos always did look good with a pink feather boa and a ball gown!
TS’s fashion habits may have changed, but we still love nothing more than an official ceremony that involves dressing up.
So we were pleased to see that the beautifully named ‘worshipful company of tax advisers’ a body that looks after tax charities and the tax advisers benevolent fund was getting into the spirit of things.
A colourful ceremony, described by the company itself as being ‘lost in the mists of time’ saw the Court of Aldermen ‘resplendent in their scarlet robes’ and the City Marshall in a ‘plumed hat’.
TS only wishes that tax advisers would dress like that all the time.
Equitable members' backlash begins
He who lives by the blog, dies by the blog.
Following TS's revelation that Paul Braithwaite, the general secretary of the Equitable Members' Action Group (and noted contributor to the TS blog), had made disobliging remarks about journalists covering the Equitable Life trial, one of them seems to have turned on him.
Quoted on The Motley Fool saying that Equitable Members' had voted for motions at the AGM like 'dim-witted sheep,' The Daily Telegraph saw fit to publish remarks slating Braithwaite from no less than Equitable chairman Vanni Treves.
'EMAG and its general secretary claim to represent the interests of all policyholders yet they have a funny way of showing it. Braithwaite's comments are distasteful, derogatory and derisory. Annuitants have suffered enough in recent years, and mockery of them is contemptible,' Treves was quoted as saying.
The piece was by one James Moore who has, needless to say, been covering the trial.
Want a boy? Be an accountant
Being a hard working journalist, TS has little time to think about children. Besides, the little brats practically look after themselves nowadays.
But for you broody accountants out there, you may be interested to know that you are more than likely, should you decide to plunge in to parenthood, to end up with a boy.
The London School of Economics, for some reason only apparent to themselves, undertook some research that found those who enter professions such as accountancy or engineering are quite probably destined to end up having boys, while those that choose caring careers such as nursing or teaching will most likely have girls.
TS can envision scores of little accountants running around with 'My First Ledger' under their arms, disturbingly.
Equitable on wrong side of Fool poll
TS would never dream of suggesting the direction that the Equitable/Ernst & Young case at the High Court might be heading in. We simply enjoy the knockabout of the argument.
The finer details of the case, on which it will no doubt be decided, tend to send us heading straight to the (very pleasant) pubs of the Fleet Street area.
Not so the contributors to The Motley Fool, a discussion site where it seems anything goes and legal anxieties do not exist.
One contributor has set up a poll on the site asking 'Do you think [Equitable] will win its case against E&Y?'
The result, for Equitable, is not good. When we last looked 46 of what TS suspects is mostly policyholders, had voted no, while only seven said yes. If this is the case it doesn't say much for Equitable chief Vanni Treves' claim last week that policyholders 'overwhelmingly' support the action.
Rev has an ogre of a task ahead
TS has a lot of time for Steve Lamey, the CIO at Revenue & Customs. Without putting too fine a point on it, he faces a massive task bringing the two departments' IT systems together, and he has made it clear that first he has to get them running properly in the first place.
But at least he's trying to do it with a sense of humour. At a bigwig conference this morning in Victoria, Lamey compared himself to cartoon ogre and movie star Shrek, even showing a slide of the green plug-eared fella to demonstrate. Apparently, this is because he is well meaning, and has nothing to do with his appearance. Or so we believe.
Wanted: failing accounting firms
TS is all too familiar with having our fundamental flaws caught on tape and broadcast to all and sundry, and if we ever find out who it was that was responsible for videoing us in the shower, they're for the high jump.
But others aren't so concerned with exposing their weaknesses to the greatest scrutiny, and if you are one of these, this could be your chance to shine on TV.
TS has been contacted by Auntie Beeb, which is looking for accounting firms to partake in the next series of I'll Show You Who's Boss, especially those that think they may have people or communication problems.
The firm should benefit from having a top class consultant pointing them in the right direction, while the BBC gains footage of a real life version of 'The Office'. At least TS thinks that's how it works, we could be wrong.
Anyway, you can contact the show at kate.murray@bbc.co.uk or on 0208 752 7345 if you're interested.
Free the KPMG slaves
TS has always seen itself as the Angelina Jolie of the accountancy profession.
Why you ask? Is it because of our perfect figure and amazing teeth? Well, kind of (except for the odd filling or two) but also because our role as an ambassador for the profession is much like that of the movie star’s for the United Nations.
TS believes there’s a lot wrong with the world. TS would like to see an end to poverty, famine, disease, war and anything beginning with the letters I, F, R and S. Oh yes, and there’s also the slave trade to tackle.
Which is why we were shocked to read the other day that Keith Dugdale, director of recruitment and resourcing at KPMG, is proud to be ‘selling its people’.
‘The only thing we sell is our people,’ Dugdale told The Times, making TS shiver somewhat. KPMG staffers falling behind with their targets have been warned.
An unhappy retirement
Poor Rugby World Cup star Martin Johnson. You’d have thought that Wasps would let his Leicester side win the Zurich Premiership final for his last ever game.
TS watched the sorry story unfold in a spiffing executive box, in the company of Systems Union chief Paul Coleman. But his thoughts were elsewhere, as instead of watching the earlier wild-card game between Saracens and Gloucester, we caught him watching his beloved West Ham United in action against Ipswich.
Coleman also pondered the strange rules surrounding the new AIM indices that were introduced this week. Apparently Systems Union is ranked at 32 in the AIM50, but only 42 in the AIM100. This is, he said, because non-UK listers are included in the ‘100’.
It’s enough to make you choke on your prawn sandwich.
Tigers got Soul
Meanwhile, being involved with Leicester Tigers demands something of a sense of humour after Saturday’s debacle handed a hat-trick of Zurich Premiership final victories to London Wasps.
Thankfully, it is something afforded to the club’s financial controller, Ian Walker, or should we say, ‘Doctor Soul’. On top of his day job of number-crunching for the nation’s most successful rugby team, the dual business-card carrying Walker is also the tannoy-man for the Leicester Tigers.
TS wonders if Doctor Soul troubles the Saturday afternoon crowd with details of the club’s profit and loss figures. Dare we say it might even be better than watching them lose yet another Zurich Premiership final…
Taxman’s grim undertaking
There used to be a way to avoid the prying eyes of the taxman, but unfortunately death does have a few disadvantages. No more long lunches on expenses for starters.
But now, not even a date with the Grim Reaper will get you off the hook from tax investigations. Revenue and Customs has kicked off an initiative to ensure that the inheritance tax returns of those who have passed on match the earnings declared in their lifetime.
Anyone who the Revenue thinks has fiddled their taxes while alive will have the money taken from their estate. TS is curious, though. Where exactly does the Rev hold any hearings? And how do those no longer with us clear their name if they’ve been wronged?
TS couldn’t think of an easier target for the taxman to pick on, although we suspect the Rev could be undertaking a new campaign against tax-evading toddlers.
Maradona explains monetary policy
Given our liking of the national game, TS often draws on the odd analogy, comparing football with our lives. Unfortunately for us, they mostly involve the various penalty shoot-outs that England has been 'involved' in over the years.
But never have we thought that one of the most famous – and disappointing - events in our rich sporting history could be used to describe monetary policy. But it has been done by Bank of England supremo Mervyn King.
At the annual Mais lecture at City University's business school last night, Merv took the audience back to the 1986 World Cup in Mexico, when England were single-handedly demolished by two goals from Diego Maradona, one a blatant handball to all but the ref and linesman and one a work of genius.
The Hand of God goal was comparable to the old 'mystery and mystique' approach to central banking, he said, as the action was unexpected, time inconsistent and against the rules. His second, involving a mazy run past five England players before burying the ball in the back of the net, represented the power of expectations in the modern theory of interest rates, apparently.
Merv explained that the formerly obese cocaine addict managed to beat nearly the entire England team while pretty much running in a straight line, because the other players were expecting him to go left or right. This explains why the Bank hasn't had to do much with interest rates recently as market rates react to where they think the official rate will go, doing much of the bank's work for them.
So there you have it, although frankly TS just reckons the ref was blind and the England defence were a bunch of Muppets. But TS doesn't think the Bank of England would take too kindly to that comparison.
Anstee throws himself on mercy of CIPFA lions
TS noticed with interest, and no small amusement, that ICAEW chief Eric Anstee is to take the stand at the CIPFA annual conference. Given the high feelings running among members of both institutes about the plans to merge, it should be fascinating to see the reaction from the conference delegation.
The reception Anstee receives should be a decent barometer to the chances of the merger succeeding. Equally, it could be a spectacle akin to Christians being thrown to the lions at the Coliseum. TS can't wait. Put the 15 June in your diaries now.
FD short for Rooney night out
TS has looked on at the Malcolm Glazer takeover of Manchester United FC with some interest and a bit of envy. Had we invested in the Red Devils earlier – the profit it would have made on Glazer's 300p per share offer would have paid for the numerous pints of Guinness TS consumes every week for the next few years.
It was with some surprise then, that TS noted that Manchester United's FD Nick Humby has not cashed in on his 50,000-odd shares. Instead, Humby forked out to buy more shares as the as part of the company’s dividend reinvestment plan. It must be mentioned, however, that Humby didn't have to break the piggy bank to purchase his 221 shares - which cost him a grand total of £660.79. By TS calculations that number would have to be at least doubled to fund a night on the town with Wayne Rooney.
Village people shocked by AWOL accountant
TS knows all to well how easily you can move from upstanding pillar of the community to persona non grata.
We sometimes try to forget how we ended up where we are, but we are constantly haunted by the nightmares of the time we mistakenly tried to expose the local vicar as a head of a drugs cartel, only to discover his 'herbal' tea evenings were not a clever cover for a crack house.
So too has accountant Malcolm Tune suffered a similar fate. The father of five, lay reader, member of the village church choir, am-dram enthusiast and auditor of the local scout group has been given three years in jail for his part in a £2.5m tax fiddle.
The sentence was handed down in his absence, as this community pillar has legged it to Asia to avoid prison for administering a complex tax evasion scheme involving offshore banks on the Isle of Man and the Channel Islands.
Tune claimed the set-up was avoidance and not evasion, although in the current climate TS sees little difference, but we suspect his place in the choir may be under threat.
DTI repents in haste
TS has, in its time, made a few decisions in haste, that we've soon regretted. We're still living down the decision to get that tattoo of defunct boy band A1.
But even then, we were still quite happy for a couple of weeks, until the announced their split. Others see their mistakes far quicker.
Take the DTI/DPEI for instance. Those of us in the know realised pretty quickly that the moniker of Department for Productivity, Energy and Industry was as useful as banana-scented deodorant in a cage full of angry gorillas.
Even our contacts at the department were struggling to get the words out of their normally eloquent mouths.
So perhaps its no surprise that one of Alan Johnson's first acts as secretary of state for the department was to change the name back to the DTI, something TS applauds him for.
We suspect the reasoning behind it wasn't, as he claims, to ensure the focus on business. We guess he simply he didn't want to be landed with such a ridiculous and long-winded title.
Fabulous no more
Because of her excessive drinking and unashamed hedonism as Patsy in Absolutely Fabulous, Joanna Lumley has always held a special place in TS’s heart until last week that is.
At a glamourous media awards ceremony attended by TS, (we’re still waiting for the category of best back page gossip to be included), Ms Lumley referred to the material covered by magazines of the financial persuasion as ‘dry’.
TS a staunch defender of the noble profession of accounting was naturally distraught. Accruals, amortisation and hedge derivatives are very exciting, thank you very much!
Rest assured that TS immediately sought out Joanna after the ceremony to let her know how we felt. Unfortunately, yet again she refused to give us her telephone number. Perhaps we should finally give up on this Fabulous star.
Taxman torn off a strip
Over the last few years, TS has observed, from afar, the rise of strip clubs being used as a form of corporate hospitality.
Frankly, TS has never ventured into one, much preferring the fuggy atmosphere of our friendly local to pry information out of our contacts.
But we may have to change our minds. For striptease isn’t simply tactless titillation, but art on a par with the opera or ballet.
Well it is in Norway, where a court ruled recently that the Blue Angel club in Oslo would not have to shell out around $85K (£45K) in unpaid VAT to the tax authorities. Instead, striptease shows should be exempt from VAT on ticket sales, normally 25%, as for other artistic shows.
Being a cultured back page, TS might have to take a trip to Spearmint Rhino. After all, we don’t want to risk being viewed as unrefined.
Matalan FD keeps reign on household clothing budget
Given that TS’s wage is roughly equivalent to that of a police dog's, shopping for a good bargain has always been something of a necessity. In fact, we can often be found down the local retail park of a weekend, shouting ‘two t-shirts for a tenner’ or ‘two multi-seam crop cargo pants for 15 quid’ at our beleaguered partner.
But we are not alone in our love of cheap fashion. Take Phil Dutton, finance director of discount fashion value retailer Matalan, who was more than happy to show off his £65 two-piece for this week’s profile (see pages 22-23). Of course, his clothing looks as good as any other grey office combo, but some unscrupulous souls (like TS) might say he’s all over the fashion store’s figures like a cheap suit.
Charm offensive from Equitable members
Paul Braithwaite, the general secretary of the Equitable Members Action Group (EMAG), has been charming participants in the Equitable Life trial.
Braithwaite, TS has discovered, posted some less than obliging remarks about hacks on The Motley Fool’s website. ‘The delightful young Megan Murphy of Bloomberg is the most consistent journalist present,’ he launches forth. Apart from one FT journalist ‘the others are no more qualified than laymen’, he added.
Braithwaite also said he had seen the ‘contemptible’ Gabriel Moss QC at court. Why ‘contemptible’? Moss was responsible for pointing out that Braithwaite had voted against a motion for a compromise scheme when publicly supporting it, the QC tells TS. ‘I’ve not been to court at all,’ said Moss.
A whiff of controversy
While TS prides itself on producing the highest quality copy, day in, day out, there are some that have accused us of writing absolute horse dung. And for once they are right.
The Forum of Private Business is kicking up a stink over new legislation from the Department for Environment, Food and Rural Affairs that will see equestrian businesses face what it called a ‘stealth tax’ on horse muck.
From July, businesses that compost horse manure will have to obtain a permit, costing up to £500. They will also have to install concrete flooring beneath the muck heaps, which could cost thousands.
If the government sticks to its word, and some FPB members carry out threats to take truckloads of the compost to Downing Street, the muck could really hit the fan.
Soul food hit by tax man
Having watched Super Size Me recently, TS has been put off fast food for life (well, maybe just the occasional KFC).
It's probably just as well given all the talk there's been recently on a 'fat tax', which has yet to see the light of day here but looks like it is going to make its first appearance over in the US.
The mayor of Detroit plans to introduce a tax on products bought at fast food outlets, aimed at tackling Motor City's obesity problems and its council's financial deficit.
Sounds ideal for them, making people thinner and their coffers fatter. We do have our doubts though. Can't say that we've noticed the consumption of booze and fags falling, despite constant increases in tax on the products.
From fat cat to failed romance
TS has a shocking admission to make, we loved Bridget Jones's Diary, although we will admit that the second movie was particularly awful.
Being a salacious gossip, we couldn't resist its combination of failed romances and comedy of errors. Reminds us a bit of our own life, actually.
But it might be that we won't have to look much further that the covers of an annual report to get our fix of messy romance in the future, if proposals in Spain catch on.
From July, directors of Spanish companies will have to disclose related party transactions with anyone that they have an 'affectionate relationship' with.
So, now we all get to see whether the chief executive has been doing 'business' with their mistress or toyboy.
Please, please, please, let this find its way over here. TS would feel like we've died and gone to heaven.
The rise of a sick tax scheme
As the new government starts to get its act together, thoughts will most likely turn to how its promised spending plans will be funded. A good deal of TS's income already goes to the taxman in the form of vice taxes, so we're hoping that the government doesn't come up with any more whacky ways to grab our hard earned
So let's just pray that the government doesn't get any of its ideas from Brazil, where one man is suing a bar for charging him a 'puke tax'. Apparently the Taverna Pub Medieval Bar in Natal added a £4 surcharge to the poor soul's bill after his friend had been speaking to God on the porcelain telephone.
Obviously, given our iron constitution, we have no personal concerns on this front. But some of our chums on Accountancy Age do have trouble keeping up. We wouldn't particularly want to run up a 'chunder tab' behind the bar of the local.
Elderly Young aims for AIM
TS was very pleased to hear the news that John Young, the octogenarian chairman of Young & Co's Brewery, could be brightening up AIM later this year.
A man cut from the same fine cloth as TS, Young has turned up at shareholder AGMs over the years wearing over-sized boxing gloves, a beekeeper's outfit and a Panama hat and white suit. On other occasions, Young has wielded a sword and shield and howled down a megaphone.
On 2 June shareholders will decide whether to move the company to AIM. Rumour has it Young may celebrate armed with a bow and arrow. Come the summer, TS hopes it will be toasting the move with a pint or twelve of Young's finest.
Insolvency good, says DTI
Now, TS kind of understands that it's better for a business to be in administration than to be insolvent. It's a bit like comparing a trip to the local GP for a prescription to being wheeled into the morgue in a black bag.
However, upon the release of the latest insolvency quarterlies by the DTI (a body that must be extremely relieved by Labour's victory last night, given the Tories were looking to give it the chop) it appears that the shed load of administrations just announced is good news.
The Insolvency Service top bod Desmond Flynn claimed that it is 'encouraging to see that companies are using the administration procedures in increasing numbers'.
Erm, well perhaps it would be better if fewer companies had to use administration in the first place….
In all fairness, insolvencies have dropped by 7.4% in the first three months of 2005 compared to a year ago, so well done to that.
SEC illustrates convergence confusion
Those of you with their finger on the pulse will know that one of the big topics doing the rounds at the moment is convergence.
It looks like the EC and the SEC have finally got their finger out and are trying to make it so that companies using IFRS that are also listed in America don't have to fiddle around with their accounts before filing them in the US.
Of course the issue is very complicated and, frankly, TS is pretty much stumbling around in the dark on this one. Fortunately help is at hand.
SEC chief accountant Donald Nicolaisen has laid it all out in black and white for those that want to know, with handy illustrations to boot. And, as you will see if you click on the image below, everything suddenly becomes much clearer with this helpful Venn diagram. Without it we're sure most of you would still be struggling to grasp the concept of convergence.
Pensions crisis, what pensions crisis?
When it comes to talk of pensions, TS usually dozes off. This isn't necessarily because it's an incredibly boring subject, although that might have something to do with it, but mainly because our retirement plan involves taking a £1000 loan out of the bank and going to Vegas.
Chances are we might see a few of you out there as well, if the findings of a recent survey are to be believed. Accountants, along with lawyers and architects, are clueless when it comes to pensions. The poll of 300 professionals found that 65% are either completely deluded about the likely size of their pension when it comes to retirement age or haven't got a clue what it is.
I mean it's not like accountants work with numbers for a living is it? Perhaps the head-in-the-sand approach is simply a defence mechanism against the potential horrors that await post-employment.
TS knows everything is going to be alright, number 12 on the roulette wheel hasn't let us down yet.
Feel like packing it in?
On Monday mornings, TS can often be seen mumbling into a mug of coffee about its lot in life. Actually, it’s not just Mondays, but we’re not half as bad as some of you bunch.
A survey, commissioned by recruitment company Hudson, has revealed a very unhappy bunch of beancounters. More than 60% found their jobs uninspiring and plan to pursue other careers. Many rated quality of life higher than career, and over half have no loyalty to their employers.
Looks like you’re not very happy with your lot. But maybe this is due to recruitment firms placing people in jobs they hate. Perhaps Hudson should do a survey on that?
Election night is Sutch a bore
Well, tonight’s the big night. Finally, after years of waiting, CSKA Moscow meet Parma in the UEFA cup semi-final. TS can’t wait.
Oh, and there’s also the election to look forward to. We’ll be there, in front of the TV, adorned with Loony hat and flag, hoping for a landslide.
But there’s a chance another party could win, and despite the bluster on immigration, crime and health, it could be the issue of tax that settles it.
Labour hasn’t ruled out tax rises, which CBI boss Digby Jones said would lead to ‘fierce’ resistance from the business community last week. The Tories want to cut them and the Lib-Dems, well, TS hasn’t really noticed.
But the biggest challenge we face is staying awake through Dimbleby’s blathering to see who wins. Come on the Loonies!
Rev file loss courts problems
Tax accountants have been mulling over last week’s test case on Arctic Systems.
One aspect of the case that remains unclear, intrigued TS: to what extent can the Revenue apply the rules retrospectively? Is the lack of clarity because the judge was ambivalent about retrospection, or is the Revenue restricted?
No. The reason why the rules were not applied retrospectively is that the Revenue lost its past files on Arctic Systems. To be more precise, the Revenue did not have the relevant documents, and only found them at the last minute. On doing so, it ruminated over the issue and decided not to pursue the earlier years.
So will the Revenue be applying the rules retrospectively? Sadly, ‘election purdah’, the excuse the government departments give for saying even less than they usually do, prevented it from giving us a definite answer.
Tales of the technophobes
Accountants and technology mix as well as cats and dogs, or beer and vodka. And the replies to a recent competition asking for the biggest IT howlers that accountants have suffered or witnessed brought to light some shocking incidents.
For example, Adrian Marshall once saw a financial controller at an old company try to use a mouse by holding it upside down in one hand and using the other to move the ball around.
Helen Caldwell knew an IT expert (with a lack of accounting knowledge) who processed a bunch of expense forms, unfortunately debiting staff bank accounts rather than crediting them. And Dru Shah witnessed an audit manager who compiled a list of soon-to-be redundant staff for the MD, only to send the email to all those on the list.
As for the best IT howler, Mike Tittensor’s winning entry can be read on page 12 of this week's Accountancy Age magazine.
Book opened on Equitable trial
Just how long will the Equitable Life trial at the High Court continue? Some commentators have argued that there are some less than compelling arguments in the battle between Equitable Life and former auditors Ernst & Young. And the gossip coming TS’s way is that the whole thing could reach a premature conclusion in June.
Equally, others doubt this. So TS thought we would try and put some kind of authoritative analysis on the question we asked the bookies. Unfortunately, William Hill told us that they don’t offer odds on the outcome of court cases. Something to do with prejudicing the outcome of the case, they said. Pah! TS might open it