LETTERS

Small firms beware EU audit thresholds

Mark Spofforth’s Opinion piece last week about the challenge of the millennium was thoughtful and may be far sighted, but it contains one reference that is a real worry to smaller firms. He said ‘as audit exemptions throughout are possibly raised towards EU limits’ – and that looks to me like the thin end of a very large wedge.

There is, of course, absolutely no valid reason why audit thresholds should rise. Shouldn’t limited liability have a price? Shouldn’t suppliers be protected? Have we been wrong all these years – or is it just PC agitators in the medium sized firms making the waves?

Thresholds rise. Small firms get cut out. They can’t train because they don’t do enough audit. Who gets the benefit, and who picks up all the routine audit that doesn’t go to the Big Six? The second tier firms, that’s who.

Just listen to Theresa Graham’s messianic zeal for hefty uplift and then ask why she’s so fervent. And don’t accept all the disingenuous nonsense about supplying the services that clients really want – ie hot shot business advice. That’s an irrelevance. If we’re competent to do it (and it’s a big if) we should already be doing it as well as audit.

Smaller firms should fight hard now to keep exemption limits as they are. Just because a company is small doesn’t mean it doesn’t need the same watchdog as a bigger one – or don’t suppliers to the smaller firms count? The whole movement to lift the ‘audit burden’ is total claptrap and it’s about time someone did something to stop it.

JOHN MALTHOUSE

Principal, Malthouse & Co,

Chartered accountants,

Liverpool

Putting forward details on all proposals

I fully agree with your Leader (21 November) that company directors, or for that matter any others going into business, should seek proper professional advice and prepare appropriate business projections, cashflows, and so on. Where a company or individual enters into a Voluntary Arrangement based on continuing trading, this information must be included in any proposal. The rescue procedure provides an ideal opportunity for insolvency practitioners to give ailing companies the benefit of their experience and to put right errors which were made when businesses started up.

Although the mooted legislation to strengthen and encourage the Voluntary Arrangement procedure is now ‘on ice’, I very much hope that the DTI will look at the matter again as soon as time permits. Meanwhile, wherever the mechanism of the existing legislation permits, I will always consider the rescue of a business through a Voluntary Arrangement a preferable alternative to liquidation.

DAVID RUBIN

Ballards Lane, London

VAT payments should be made promptly

Putting aside the legal points of the Customs & Excise three-year rule on VAT repayments, would someone please explain why some organisations require a considerable number of years to determine their VAT repayment claims.

An ordinary company would be in dire straits if it were not repaid within the normal monthly or three-monthly cycle.

EDMUND LEES

Dursley,

Gloucestershire

Asian presence in the Lords underestimated

Your report on the front page, ‘Stoys wins tender for Caparo Group audit’ (21 November) says that Lord Paul was the first Asian to be created a peer. May I suggest that the claim of Lord Sinha Baron of Raiper, created 1919, should not be overlooked.

JD WELLS

Barnes Common,

London

Avoid tarring everyone with same brush

It is not often that the calibre of correspondence in Accountancy Age falls to tabloid levels, but Messrs. Cowing and Crane appear to have achieved this with ease with their comments on ACCA and the Jim Waits’ affair (Letters, 21 November).

Andrew Cowings’ letter has the benefit of being slightly comical. However, the attempt to enjoin the entire council leadership and senior officials with the comments of one individual is virtually defamatory and, in effect, as juvenile as the outburst by Waits.

So far as Crane is concerned, he might like to reflect on the growth and success of the association. When I became a member in 1959, it was a relatively minor player in a big league. Various attempts at integration were invariably torpedoed by English ICA members whose refrain was ‘dilution by inferior qualifications’.

How things have altered. Mr Crane now has a qualification second to none and a powerful body which plays a major part in forming opinion. This was no accident – it came from dedicated and hardworking council members flying the flag and the tireless support of senior officials prepared to ‘mix it’ with all comers.

Perhaps he would have preferred the association to stay with quill pens and the abacus and its place in the third division.

Instead of petulant threats of resignation, he might consider offering himself as a council member where he can root out the bad management that he perceives.

ANDREW RAMAGE-GIBSON

Henley-on-Thames,

Oxon

We don’t Adam and Eve it

With reference to ‘We Adam and Eve it’ (Taking Stock, 17 October), the Bible refers to man’s life expectancy as three score years and ten, or four ‘if strong’.

Thus, to my mind, Alan F Alford is 132,757.14% inaccurate in his claim that Adam lived to be 93,000 (or a relatively modest 116,115% inaccurate based on 80 years).

I trust his accounts are more accurate.

CHRISTOPHER MALONE

Clitheroe,

Lancashire.