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A Nation Of Accountants

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Accountants have colonised the state to carve out niches. There are no state-guaranteed markets for mathematicians, scientists, designers, information technology experts and other wealth generators, but accountants belonging to a select few trade associations enjoy the state-guaranteed monopoly of insolvency (they share this with law practitioners) and external audits.

The sick are not required by law to consult doctors and the injured are not compelled to employ lawyers to seek redress, but most companies are required to have a financial audit by an accountant, even though they deliver little. Universities, schools, hospitals, housing associations, charities and other entities are also required to submit to an audit. The state-guaranteed monopolies are not accompanied by any performance or value-for-money indicators. Governments do not allow anyone to sell packets of crisps or sweets without owing a "duty of care" to current and potential customers, but millions of people are expected to invest their pensions, savings and investments in companies whose auditors owe them no "duty of care".

...

There is an urgent need to examine the UK's obsession with accounting, especially as it has failed to deliver the promised advances in business transparency, accountability and good governance. The huge social investment in accounting is stunting the development of other sectors of the economy and alternative forms of governance, and that cannot be good for the future of any society.

http://www.guardian.co.uk/commentisfree/20...d?commentpage=1

A long overdue article in the press. It seems that being stultifyingly boring really is the best defence sometimes, people don't even notice you exist half the time...

The question is, what can be done?

Edited by Cogs

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http://www.guardian.co.uk/commentisfree/20...d?commentpage=1

A long overdue article in the press. It seems that being stultifyingly boring really is the best defence sometimes, people don't even notice you exist half the time...

The question is, what can be done?

lawyers are far more of a problem than accountants

then again i suppose you need them with all the uk and eu legislation

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Guest happy?
http://www.guardian.co.uk/commentisfree/20...d?commentpage=1

A long overdue article in the press. It seems that being stultifyingly boring really is the best defence sometimes, people don't even notice you exist half the time...

The question is, what can be done?

It is safe now to assume that GMG's books will not now be signed off.

The real curse of the last 20 years has been the obsession with auditing. Every man and his dog has generated thousands of spurious measurements to re-assure the dull-witted and the stupid that their particular organisation is somehow improving.

It is of course arrant nonsense.

The problem with auditing is twofold:

If it can't be measured then it isn't, regardless of how important an activity is to the function of an organisation.

The corollary - that if it can be measured it is, regardless of how unimportant an activity it is to the function of an organisation.

As a consequence lots of unimportant things are done by organisations because they're measured, whereas lots of really important things aren't done. Thus small children die whilst under the care of social services and the police, and people with minor ailments die from diseases they catch in hospitals.

Second-rate management places great store on auditing. Auditing's rife in the public sector.

Edited by happy?

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It is safe now to assume that GMG's books will not now be signed off.

The real curse of the last 20 years has been the obsession with auditing. Every man and his dog has generated thousands of spurious measurements to re-assure the dull-witted and the stupid that their particular organisation is somehow improving.

It is of course arrant nonsense.

The problem with auditing is twofold:

If it can't be measured then it isn't, regardless of how important an activity is to the function of an organisation.

The corollary - that if it can be measured it is, regardless of how unimportant an activity it is to the function of an organisation.

As a consequence lots of unimportant things are done by organisations because they're measured, whereas lots of really important things aren't done. Thus small children die whilst under the care of social services and the police, and people with minor ailments die from diseases they catch in hospitals.

Second-rate management places great store on auditing. Auditing's rife in the public sector.

I think the tail wags the dog these days. The wider point of the article is that it introduces a culture, I'd say the public sector has suffered terribly from predations of the accountancy mafia (I mean the big firms, not some little family firm in a small town) who have quietly enriched themselves at an incredible rate over the last 20 years.

Wouldn't it be great if public services could be run as public services and not faux-businesses (for the benefit of the bean counters) and social engineering laboratories (for the benefit of politicians of all main parties). You may say I'm a dreamer, but I'm not the only one...plink plink, actually I probably am round these 'ere parts but still.

Edited by Cogs

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What does 'state-guaranteed' mean?

Would certain newspapers that depend on public sector advertisements for jobs and other announcements be included?

No. They can be advertised elsewhere or not at all.

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What does 'state-guaranteed' mean?

Would certain newspapers that depend on public sector advertisements for jobs and other announcements be included?

Do you speak of those yellow parts of the press (Mail/Express/ et al) which accepts advertising from HBOS? Bradford and Bingley etc.

GMG ofcourse, is not dependent on such 'public sector advertisements'

http://en.wikipedia.org/wiki/Guardian_Media_Group

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What do they want instead?

Large corporations being able to cook their books completely unfettered by any remote threat of a challenge?

Actually yeah, a large national newspaper probably would like that. Some of them must worry that they'll get found out some time.

Edited by mikeymadman

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What do they want instead?

Large corporations being able to cook their books completely unfettered by any remote threat of a challenge?

Actually yeah, a large national newspaper probably would like that. Some of them must worry that they'll get found out some time.

Enron, Arthur Andersen ? :lol::lol::lol:

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What do they want instead?

Large corporations being able to cook their books completely unfettered by any remote threat of a challenge?

I think he is saying that if the accountants have to be involved they shouldn't be able to cook the books completely unfettered by any remote threat of a challenge.

Many accountants do a valuable job, but excessive reliance on accounting has not given us freedom from fraud or produced ethical and responsible corporate conduct. If anything, accounting firms have undermined national tax revenues and used their expertise to excel at money laundering, bribery, corruption and other antisocial practices (pdf).
Edited by Cogs

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Enron, Arthur Andersen ? :lol::lol::lol:

Just about any US or UK bank :(

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Enron, Arthur Andersen ? :lol::lol::lol:

founded on good principles

Andersen, who headed the firm until his death in 1947, was a zealous supporter of high standards in the accounting industry. A stickler for honesty, he argued that accountants' responsibility was to investors, not their clients' management. During the early years, it is reputed that Andersen was approached by an executive from a local rail utility to sign off on accounts containing flawed accounting, or else face the loss of a major client. Andersen refused in no uncertain terms, replying to the president that there was "not enough money in the city of Chicago" to make him do it. Leonard Spacek, who succeeded Andersen at the founder's death, continued this emphasis on honesty. For many years, Andersen's motto was "Think straight, talk straight."

Andersen also led the way in a number of areas of accounting standards. Being among the first to identify a possible sub-prime bust, Andersen dissociated itself from a number of clients in the 1970s. Later, with the emergence of stock options as a form of compensation, Andersen was the first of the major accountancy firms to propose to the FASB that stock options should be expensed, thus impacting on net profit just as cash compensation would.

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I think the tail wags the dog these days. The wider point of the article is that it introduces a culture, I'd say the public sector has suffered terribly from predations of the accountancy mafia (I mean the big firms, not some little family firm in a small town) who have quietly enriched themselves at an incredible rate over the last 20 years.

Wouldn't it be great if public services could be run as public services and not faux-businesses (for the benefit of the bean counters) and social engineering laboratories (for the benefit of politicians of all main parties). You may say I'm a dreamer, but I'm not the only one...plink plink, actually I probably am round these 'ere parts but still.

I think this is pretty much on the money. It's a similar warped logic to someone thinking that by blacking up and buying a gold chain they'd be a faster sprinter.

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Guest happy?

http://news.bbc.co.uk/1/hi/business/the_co...file/353725.stm

Leading City accountancy firm PricewaterhouseCoopers has agreed to pay out more than £67m for shortcomings in auditing the accounts of the late Robert Maxwell's group of companies. The payment, to settle a professional negligence claim lodged by Maxwell Communications Corporation, is believed to be the largest of its kind in the United Kingdom....

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i wouldnt mind being an accountant, go from company to company and look at how much money they have.

money is the most sensitive issue for all businesses and they dont like showing their cards.

i was speaking to an accountant the other day asking him about his job and he said that alot of directors fool themselves into thinking they are doing well when in reality they dont actually understand their finances or anything.

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founded on good principles

Yes frankly accounts should be made to follow a simple and clear format that doesn't require professional accountants to understand them. Keep it simple, it is just numbers after all and most of the complex accountancy to day is merely a proxy for fiddling the taxman. The accountancy profession and its professional bodies should all be abolished.

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Yes frankly accounts should be made to follow a simple and clear format that doesn't require professional accountants to understand them. Keep it simple, it is just numbers after all and most of the complex accountancy to day is merely a proxy for fiddling the taxman. The accountancy profession and its professional bodies should all be abolished.

It's not necessarily the accountants. The convoluted taxation system is govt driven to obfuscate just how much tax is taken. It also keeps many, many people in jobs in a myriad of govt depts.

However, I don't know how much longer they can keep it up though with online banking etc. It looks increasingly absurd as people look down their bank statements at half a dozen direct debits and payments all going to effectively the same place. Probably ought to all be replaced with some sort of IT automated sales tax. Hell of a lot of paon between here and there though.

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