The most recent articles from Accountancy Age

Financial Director Web Seminar - Future shock: Creating the ‘no surprises’ enterprise

Hannah Dickinson — 2008-12-01T15:36:00.000Z

Hannah Dickinson, Accountancy Age, Monday 1 December 2008 at 15:36:00

Learn more about how to become a ‘no surprises’ enterprise at our web seminar sponsored by Oracle and chaired by Andrew Sawers, Editor of Financial Director.

Nobody likes unpleasant surprises, least of all in business. Good communication between the business and the shareholder is exemplified by a full and frank discussion of the organisation’s prospects and expectations.

That’s why the board not only needs excellent systems, it also needs rapid, truthful lines of communication throughout the organisation so that line managers understand not only what is expected of them but also their role in ensuring that events are foreseen and anticipated.

Learn more about how to become a ‘no surprises’ enterprise at our web seminar which will discuss issues such as:

* Forecast accuracy as far into the future as possible in these volatile times

* More sophisticated approaches that build an understanding of risk into forecasts

* Provision of the right data to the right people

* The balance between financial and non-financial KPIs

* How managers and employees are remunerated – for top performance or for beating the budget?

* Top management understanding of the cost and revenue drivers

Speakers include:

Mark Berrisford Smith, Senior Economist - HSBC

Tony Grace, Finance Director - Virgin Media

Andreea Vasiliu, Director, Product Strategy, EMEA - Oracle

Deloitte could charge £22,000 per hour for Woolworths administration

AA Freelancer — 2008-11-28T14:13:00.000Z

AA Freelancer, Accountancy Age, Friday 28 November 2008 at 14:13:00

Deloitte could be charging as much as £22,000 an hour plus expenses for taking control of Woolworths after it went into administration on Wednesday, industry experts have estimated.

Deloitte could be charging as much as £22,000 an hour plus expenses for taking control of Woolworths after it went into administration on Wednesday, industry experts have estimated.

The Big Four accountancy firm has devoted 100 staff to the project with the firm's five partners leading attempts to find buyers for the wholesale and retail businesses, the Guardian reported.

Partners in the insolvency arms of the big four accountancy firms charge up to £600 an hour, according to industry insiders and fees for senior managers are up to £400 an hour. It is believed that about 70 support staff are likely to be charged out for the Woolworths assignment at around £130 an hour each, the Guardian added.

Deloitte has become the fastest growing of the big four accountancy firms in terms of fees, gaining a reputation for aggressively pricing its work.

MPs to question auditors over banking crisis

AccountancyAge.com — 2008-11-26T11:55:00.000Z

AccountancyAge.com, Accountancy Age, Wednesday 26 November 2008 at 11:55:00

The Commons Treasury Committee is to question auditors about their role in the banking crisis and whether reform of the auditing industry is needed.

The Commons Treasury Committee is to question auditors about their role in the banking crisis and whether reform of the auditing industry is needed.

The influential committee will call for evidence on 'the role of auditors in the banking crisis and whether any reform to that role is desirable' by January 6 as part of its ongoing inquiry.

MPs have already sought and been sent evidence on the role of accounting standards as part of their investigation into how to secure financial stability, protect the taxpayer, customers and shareholder interests.

The announcement of plans to quiz auditors is likely to unsettle the Big Four firms, which successfully lobbied politicians against heavy-handed regulation earlier this decade after corporate scandals such as Enron damaged the profession's reputation.

Earlier this month, Peter Wyman, head of professional affairs at PricewaterhouseCoopers, said that all parts of the financial crisis, including auditing, should be 'examined' at a later date to help judge whether improvements could be made, such as expanding the scope of the auditors' role.

But he argued against a review of the audit profession and urged politicians not to 'shoot the messenger'.

PBR 08: Tax experts lukewarm on VAT cut

David Jetuah — 2008-11-24T18:37:00.000Z

David Jetuah, Accountancy Age, Monday 24 November 2008 at 18:37:00

Retailers, banks and insurance companies may benefit more than consumers from today's VAT cut announced in the pre-Budget report, tax experts said.

Retailers, banks and insurance companies may benefit more than consumers from today's VAT cut announced in the pre-Budget report, tax experts said.

The cut in VAT from 17.5% to 15% was one of the centrepieces in Chancellor Alistair Darling's statement, a £12bn boost for the British economy aimed at reviving consumer spending.

But Richard Baxter, head of indirect taxes at Alvarez & Marsal Taxand, said: 'The fiscal stimulus but it remains to be seen how it will flow through to consumers in the short and medium term.'

The VAT cut from next Monday will be help reduce the amount of non-recoverable VAT paid retailers, banks and insurance companies.

Government figures predict that a 13 month period of VAT levied at 15p in the pound will generate 12.4bn of savings for consumers and business, but tax experts were sceptical.

'Stephen Herring, Senior tax partner at BDO Stoy Hayward said: 'The chancellor should have used a good part of the £20bn available for direct cuts in income tax which tax payers – and consumers – would have noticed every month in their pay packets. Will they really link the price paid to goods and services to the VAT reduction?'

Darling said: 'To prevent the recession deepening we all need to take action to put money into the economy immediately,' he said before announcing the measure.

Anne Redston, tax professor at Kings College, said: 'It's fairly optimistic to think that in 13 months the [economic] recovery will be under way, but the [VAT reduction] is nevertheless welcome.

KPMG warns of heightened fraud risks

AccountancyAge.com — 2008-11-12T06:48:00.000Z

AccountancyAge.com, Accountancy Age, Wednesday 12 November 2008 at 06:48:00

KPMG warns the economic downturn is bringing heightened fraud risks

Alex Plavsic, KPMG Forensic head of fraud investigations, warns the latest developments in the economy and the downturn are bringing a heightened risk of fraud, affecting his clients.

'The pressure to hit targets that have become harder to meet increases the possibility of accounts manipulation and the booking of false revenues. Personal financial pressures could also lead to a wider incidence of individual insider frauds,' he says.

He warns also that organised crime rings will be 'icking hard against a downturn'. They know there is a price at which they can buy the services of some employees in order to gain access to customer and fiancial information.

'Companies need to get the balance right between control and openness. Segregate data wherever possible, so that no one has access to more information than they actually need to do their job,' Plavsic says. 'At the same time, ensure there are no personal fiefdoms in the business and that reporting lines are open and transparent.'

Further reading:

FSA urges clampdown on bogus brokers

Fraud-as-a-service looms over firms

Clients turning to firms rather than banks

Kevin Reed — 2008-11-10T10:12:00.000Z

Kevin Reed, Accountancy Age, Monday 10 November 2008 at 10:12:00

Clients prefer discussing their financial affairs with accountants rather than banks

Over two-thirds of small businesses will go to their accountants to discuss financial advice, rather than their banks.

A survey of 400 small UK business by Graydon and the Forum of Private Businesses found that 70% speak to their accountants for financial advice, while only 47% would speak to their banks.

A fifth of respondents seek advice at least quarterly, or more frequently. Over a third (36%) admitted they had failed to speak to either their accountant ar bank manager in the last year.

'The traditional ‘grey-haired pillar of society’ stereotype of the bank manager as a trusted and respected source of financial advice has faded into the past,' said Graydon managing director Martin Williams. 'But as the economy hits upon hard times and banks become increasingly nervous about credit limits, SMEs need now, more than ever, to maintain a close dialogue with their bank managers.'

'It is a concern that they are not sourcing help more frequently, particularly in these testing times,' said FPB chief executive Phil Orford.

Last week HSBC's head of professional proposition Piyali Williams told Accountancy Age that accountants were viewed by clients and banks as a trusted source of independent advice.

Further reading:

Bank says accounting profession is best adviser

Visit our Practice Web Seminar: Staying afloat in 2009

PwC, E&Y clinch lucrative TARP contracts

AccountancyAge.com — 2008-10-22T08:30:00.000Z

AccountancyAge.com, Accountancy Age, Wednesday 22 October 2008 at 08:30:00

US Treasury has recruited big four firms PwC and E&Y in its emergency buyouts of toxic assets

The US treasury has announced it has recruited big four firms PricewaterhouseCoopers (PwC) and Ernst & Young (E&Y) to help in the emergency buyouts of toxic assets from struggling financial institutions by providing ‘accounting and internal controls services needed to administer the complex portfolio of troubled assets’, including whole loans and mortgage-backed securities.

The treasury chose the two firms from a pool of 12 and the initial orders for PwC and E&Y are worth $191,469.27 and $492,006.95, respectively.

The contracts were awarded as part of the government's new $700bn Troubled Asset Relief Program (TARP) to bail out financial companies lumbered with assets degraded by falling US home prices, Agence France Presse reports.

The treasury said PwC would help the department establish a ‘sound internal control posture’ and E&Y would provide general accounting support and expert accounting advice.

M&A market collapse - down $US90bn

AccountancyAge.com — 2008-10-16T06:49:00.000Z

AccountancyAge.com, Accountancy Age, Thursday 16 October 2008 at 06:49:00

The M&A market plummets while deals worth almost $90bn collapse since September 1

Mergers and acquisitions worth close to $US90bn (£51.8bn) have collapsed since

September 1 as the global financial crisis hampers companies from completing deals.

Credit agency Experian became the latest British group to abandon plans for a deal

yesterday, saying it had decided against selling its online price comparison

website Price-Grabber, The Times reports.

Figures from Dealogic show M&A deals totalling $US121.6bn have been withdrawn

globally since September 1 and deals worth about $US89.5bn have collapsed without new bidders, most of which occurred after September 15, when Lehman Brothers filed for bankruptcy.

Mark Jarvis, an Ernst & Young partner specialising in transaction advisory

services, said that, although share prices had plummeted, opening up big

opportunities for strong companies to pick up bargains, the great volatility in prices

made it practically impossible for prospective buyers to put a value to their targets.

Further reading:

Read The Times story

UK loses ranking as favourable tax regime

AccountancyAge.com — 2008-10-10T05:36:00.000Z

AccountancyAge.com, Accountancy Age, Friday 10 October 2008 at 05:36:00

UK has lost is ranking in the top three of Europe’s most favourable tax and legal environments

UK has lost its ranking in the top three of Europe’s most favourable tax and legal environments, according to the fourth benchmarking study carried out by the European Private Equity & Venture Capital Association (EVCA) in collaboration with KPMG’s M&A Tax Services.

The study assesses the tax and legal enviroments across 27 European countries for limited partners and fund management companies, investee companies, as well as the environment for retaining talent at both investment firms and investee companies.

It shows France achieved the highest score in the study, followed by Ireland and Belgium, which made beneficial changes to its pension fund environment and new fiscal R&D incentives, pushed the UK out of the top three countries for the first time.

The study also reveals the gap has widened considerably between Europe’s most and least favourable tax and legal environments. This year the highest ranking achieved 1.23, compared with 1.27 in 2006, and the lowest achieved 2.40, compared with 2.35 in 2006.

KPMG recruited to review Olympic sites

Kevin Reed — 2008-10-03T10:07:00.000Z

Kevin Reed, Accountancy Age, Friday 3 October 2008 at 10:07:00

Olympic cost-cutting exercise sees the government bring in the accountants

KPMG is reviewing planned 2012 Olympic venues to see if cheaper existing sites can be used instead.

The firm was appointed by Olympics minister Tessa Jowell to review a number of sites, as organisers look to cut costs by more than £150m.

Wembley has been touted as a venue for early rounds of Basketball, which would cut £90m in costs by avoiding the creation of a temporary structure in the main Olympic park, reported the Telegraph.

A shooting venue at Woolwich and planned equestrian site at Greenwich are also being review by KPMG, with a reported expected this month.

Further reading:

Olympics: tax issues for our athletes

Providence brings forth new FD

AccountancyAge.com — 2008-09-22T10:07:00.000Z

AccountancyAge.com, Accountancy Age, Monday 22 September 2008 at 10:07:00

Philip O'Quigley apppointed as finance director at Aim-listed oil and gas exploration company Providence Resources

Providence Resources, the Aim-listed oil and gas exploration company, has appointed Philip O’Quigley as finance director.

Quigley, a Fellow of the Institute of Chartered Accountants in Ireland, joined Providence in July as chief financial officer.

Before joining Providence he worked at a number of private and public companies in the oil and gas industry, including Petroceltic International where he was finance director.

O'Quigley, who trained with Ernst & Young, will continue to serve as a non-executive director on the board of Glencar Mining.

PwC appoints new Midlands chairman

AccountancyAge.com — 2008-09-16T16:57:00.000Z

AccountancyAge.com, Accountancy Age, Tuesday 16 September 2008 at 16:57:00

PricewaterhouseCoopers has appointed Mark Smith as its new Midlands chairman.

PricewaterhouseCoopers has appointed Mark Smith as its new Midlands chairman.

Smith, previously head of assurance at PwC LLP in the Midlands, will lead 2,000 staff in Birmingham, Milton Keynes and Castle Donington.

He takes over from David Waller, who headed up the firm in the region for more than five years.

Smith said: 'I feel passionate about taking on this role, which will enable me to work closely with the regional business community to get an even deeper understanding of the challenges they are facing.'

Further reading:

Accountancy outsourcer undeterred by Ahmedabad bombs

Kevin Reed — 2008-07-29T11:55:00.000Z

Kevin Reed, Accountancy Age, Tuesday 29 July 2008 at 11:55:00

Accountancy outsourcer QX unaffected by Ahmedabad bombs

Outsourcer for accountancy firms QX was unaffected by the bomb blasts in Ahmedabad, where it has a major office, it has stated.

The firm, which handles business for UK accountants, said that all its 100 staff were unhurt in the attack, which took place across the other side of the city to the outsourcer's office.

'Business will continue unaffected', it said a in statement.

'We have rung all our staff up and are relived to report they are all unhurt and OK. The news from the City is calm but with the army on stand by,' said QX managing director Chris Robinson.

Further reading:

Profile: Chris Robinson, FD of QX

Labour struggles to repay party loans

AccountancyAge.com — 2008-06-30T07:07:00.000Z

AccountancyAge.com, Accountancy Age, Monday 30 June 2008 at 07:07:00

Labour is struggling to postpone repayments to 11 wealthy businessmen of up to £14m of loans

Labour is struggling to renegotiate with 11 wealthy businessmen up to £14m worth of loans falling due over the coming months.

The secret credit extended by the businessmen reportedly helped the party out in 2005 and all but one of the millionaires have met Jon Mendelsohn, chief party fundraiser, at accountancy firm KPMG to negotiate a single agreement to defer the loans for up to nine years, the Financial Times reports.

However, property tycoon Andrew Rosenfeld was not at the meeting, triggering alarm among Labour officials he might want his money back on time while others, including Chai Patel and Sir David Garrard, are understood to be moving closer to signing a deal after long and complicated discussions.

Labour has insisted its auditors will sign off the party’s annual accounts by Monday, in spite of fears about its increasingly precarious financial position.

Further reading:

Read the Financial Times story

Olympian task for contracts

Clive Lewis — 2008-06-19T10:51:00.000Z

Clive Lewis, Accountancy Age, Thursday 19 June 2008 at 10:51:00

The long and painful process to win government work

For many years, smaller practices and their SME clients have wanted a slice of the action when it came to government contracts both locally and centrally.

The Department for Business Enterprise and Regulatory Reform recently published a new enterprise strategy. This included an initiative to open up the public procurement market to all types of business, particularly SMEs. It aims to give them the facility to search, be alerted to and view open contract opportunities, including research and development, across the public sector.

London 2012 is a perfect example of the potential contracts that could be won and which could have a major impact on smaller firms, especially in the capital. Yet again the abundance of red tape, which we know SMEs already face on a daily basis, could put many off.

After registering basic company information, a business profile must then be completed, which involves answering a series of questions.

This profile is automatically tested against a number of minimum standards such as health and safety. If these requirements are not met the company is automatically referred to tailored business support to help them improve their performance, provided by Business Link.

So far more than 2,000 businesses have automatically been referred to Business Link highlighting the strict criteria which needs to be met, and that it is not as simple as it sounds.

There is no doubt that the initiative is welcomed, but before embarking on this it may be worth practices advising smaller clients that it could be a long and painful process.

The saying, ‘If at first you don’t succeed’ should also apply, as many will have to go though the process a few times. Whether they will be prepared to do this, given the time constraints and red tape they already face for no guaranteed ‘win’ at the end, is questionable. A lot will depend on how important they view the potential business that could be at the end of the line.

We are interested in hearing your views on tendering for public sector work.

Clive Lewis, is head of SME issues at the ICAEW