PracticeAuditThis week’s blogs: expenses spared

This week's blogs: expenses spared

This week our bloggers on double standards, bad habits and unrealistic expectations

I was disappointed by the government’s decision last Thursday to disregard
attempts by freedom of information campaigners to ensure MPs account fully for
how they spend parliamentary allowances.

This an issue that has already cost a lot of taxpayers’ money on the legal
battle and administration associated with publishing receipts and expense
claims.

The institute has spent years in dialogue with the government about
modernising company law and increasing the accountability of directors to their
shareholders.

We have also spent time recently defending fair value accounting rules, which
increase the transparency of financial information so that any problems can be
dealt with early.

In this age of increased transparency in the private sector, I think that it
is a backwards step for parliament to exempt itself from key aspects of the
freedom of information legislation that it enacted only a few short years ago.

Michael Izza, chief executive, ICAEW,
ion.icaew.com/
MoorgatePlace

Gordon Brown has said on a number of occasions in the last few months that
the UK was well prepared to cope with the recession.

Today, when it finally became official that we ARE in recession, my company’s
recent analysis of the state of the corporate nation leading up to the downturn
makes worrying reading.

More than 60% of incorporated companies on Graydon’s credit information
database had high or above normal risk profiles coming into the recession.

Far too many companies, it would appear, had high gearing and working capital
deficiencies coming into the credit squeeze.

No wonder they are struggling, now that easy credit has dried up. Like many
consumers in this country, indebtedness was some-thing businesses learned to
feel comfortable with during benign economic conditions, and perhaps too many b
ad habits crept into corporate life during the good times.

Martin Williams, MD, Graydon
riskybusiness.accountancyage.com

An audit has never been a tool for predicting the future.

In terms of our banks, auditors couldn’t have predicted the liquidity issues
which resulted in government bail-outs, the subsequent ‘big freeze’ in the
wholesale funding markets or the Financial Services Auth-ority’s imposition of
additional capital requirements.

Not only that, they shouldn’t have been expected to.

Anton Colella, chief executive, ICAS
camagonline.co.uk/Blogs/ChiefExec

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