Vince Cable won on honesty and obvious integrity, especially when refusing to give commitments.

OK Ritchie, what sort of honesty did you have in mind?

Perhaps this sort?

The long overdue unravelling of “economic-guru” Vince Cable couldn’t have come at a more awkward time for the brazen soothsayer. On the morning of the C4 News debate he has been forced to issue a humiliating apology directly to the Treasury permanent secretary Sir Nicholas McPherson after claiming the had been in unprecedented talks with him and he was ready to serve

Are you sure your judgement hasn't gone a bit wonky?

More Vince Cable honesty and integrity, courtesy of Andrew Neil:

Filed under: Current issues, Politics with tags alistair darling, andrew neil, bbc, george osborne, pwned, richard murphy, vince cable
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The April 2010 edition of the ACCA's Accounting and Business magazine is out. It's still as ugly as ever, but it's got some good articles in it this month.

You can read it all online as one of those irritating flippy book things, but it's very fiddly and annoying to use. You can also apparently download pages as a PDF, but that option didn't work for me.

There's an interview with Lord Sugar (pp 14-17) who provides some very frank views on SME lending. Perhaps unsurprisingly, he doesn't have a lot of sympathy for SMEs who have been turned down for a loan; many of them, he suggests, have only applied to one bank and haven't formulated their application very well. He also provides his thoughts on accountants. He quite likes us!

Then there's a fascinating piece on Spofforths, an accountancy firm, and what they did when one of their offices burned down (pp 42-43). It shows how important it is to have a robust business recovery plan and the value of planning for the worst, even though it might seem remote. The article even manages to interview Mark Spofforth, head honcho of the firm, while failing to mention that he's both (a) an ICAEW member; and (b) an ICAEW office-holder who will become President of the ICAEW some day.

I amused myself while reading an article on the UK Superbrands on p8. The article gave the top 10 Business Superbrands (out of 500) but didn't give the positions of the accountancy bodies. So here, in the interests of completeness, here they are: ACCA is at 304, miles behind ICAEW at 165 and, agonisingly, also behind CIMA at 303. Oops!

And finally, I had a good chuckle at the contents page. Above a very attractive picture of lovely Paralympic gold medal winning swimmer and ACCA student Liz Johnson is a reference to London's 2010 Olympics.

Filed under: Institutes, Other blogs with tags ab magazine, acca, alan sugar, cima, icaew, liz johnson, mark spofforth, superbrands
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Ritchie is fuming that there were no claims made against auditors in the High Court here in the UK in either 2007 or 2008.

Isn’t is staggering that not a single professional negligence claim was brought against auditors in 2007 or 2008? And that just 13 have been brought as a result of the massive collapse of the economy in 2008 - even when auditors gave no clue on concern in going concern warnings?

What does this say? That the balance of risk has shifted far too far in favour of the auditor? That all the nonsense about liability caps is just that? That the balance of power has shifted far too far in favour of the auditopr because it is now almost impossible to sue thjem unless a company has already failed?

All these things, I suggest.

So professional negligence claims are good now, are they? Queue Prem Sikka:

Company auditors, the private police force of capitalism, make millions of pounds in fees from company audits. And company audits are used to get easy access to senior management and sell a variety of consultancy services.

But fee dependence, weak laws and self-interest inevitably compromise impulses for penetrating audits. The inevitable outcome is worthless audit reports.

So, Sikka uses cases of professional negligence to prove that auditors are sloppy and Murphy uses a lack of cases of professional negligence to prove that auditors are sloppy. Clearly they cannot both be right. And, indeed, neither is.

Sikka first. There are thousands of listed companies across the globe. If Sikka is right, the fact that there were no negligence claims in the UK in those years is nothing short of miraculous. Indeed, it should be completely impossible. For his thesis to be credible, it must be capable of being disproved. And two clean years disproves it, totally.

Now Murphy. What do you do when the evidence looks like it's in danger of disproving your life's work? Why, you resort to a "dog that didn't bark" line of argument.

Yet Occam's razor suggests we should accept the simplest solution to a problem in preference to a more complex one. It's totally perverse to try to turn it into evidence of a conspiracy of under-regulation. Because there's no evidence to do otherwise, besides in the demented conspiracy theories of our favourite accounting madmen, we should take a lack of professional negligence claims at face value - that auditors are doing the job that they're there to do.

Filed under: Auditing, Regulation with tags idiots, negligence, occam's razor, prem sikka, richard murphy
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Here's the governor of New Jersey explaining how the mathematics of public sector pensions stacks up:

"One of our state retirees, paid, over the course of his entire career, a total of $124,000 towards his pension and health benefits. What will we pay him? $3.3m in pension over his life and $500,000 healthcare benefits – a total of $3.8m on a $120,000 investment. Is that fair? "A retired teacher paid $62,000 towards her pension and nothing – nothing – for full family medical, dental and eye coverage over her entire career. What will we pay her? $1.4m in pensions and $215,000 in healthcare premiums over her lifetime. Is that fair for all of us and our children, to have to pay the excess?"

Isn't it about time that somebody did similar calculations here so we can expose the lie that public sector workers 'pay for' their pensions (e.g. here)?

Filed under: Current issues, Politics with tags deficit, guardian, new jersey, pensions, us
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It does amuse us that you waste so much time and effort getting things so spectacularly wrong time, after time, after time.

It amuses me too. Indeed, rebutting Richard Murphy's accountancy errors and is part of why I started blogging.

Meantime, we can enjoy the sight of Tim and Ritchie lobbing grenades at each other from their respective blogs. Tim has the edge over Ritchie for two big reasons: he admits when he's wrong and he engages. Ritchie hates it when he feels people are insulting him, especially anonymously (tee hee), and will ignore any criticisms he can't answer. Yet he is all too happy to dish out insults himself. Tim's version of the debate has a comment from MatGB imploring Ritchie to play the ball, not the man. As yet it hasn't appeared on Ritchie's side. I guess Ritchie doesn't want to play ball. Even worse, he's like that kid who doesn't want you to play ball either. And I'm still waiting for him to come clean on his Lehman's/FSA howler.

Still, if he learned from his mistakes he'd be a lot less fun (although a lot more credible, policywise). So I always look forward to Ritchie's posts with a combination of the sorrow a parent feels when their child has been brought home by a policeman for shoplifting and the joy a batsman feels as the bowler tosses down another rank long-hop that can be effortlessly lifted over the stands and out of the ground.

Filed under: Other blogs with tags richard murphy, tim worstall
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The Guardian reports that

A proposal by both Labour and the Tories would have us lose an hour, but it would make life much easier for many.

Labour and the Tories are considering including in their election manifestos a plan to move British clocks permanently forward by one hour.

Both would also retain the concept of summertime, so we would move to GMT+1 in the winter and GMT+2 in the summer.

Have they both taken complete leave of their senses? This is one of the most utterly pointless and stupid election pledges of all time. One can only hope that it belongs in the 'EU referendum' style of pledges that get swiftly broken.

Perhaps it's felt that Britain needs to be better synchronised with the working times of the rest of the European Union. But that doesn't require a shift in clock time, it just needs us to haul our sorry behinds out of bed an hour earlier. Similarly with school times - if we are really worried about children leaving school in the dark, then change the time of the school day and legislate to make employers toe the line.

Much is made of how summertime itself saves the country power in heating and lighting costs. I don't believe it. I believe that it's the act of changing the clocks that saves the country these costs. How many people treat the act of British Summer Time as a reason to turn off the heating? And how many correspondingly wait until the clocks go back again to turn on the heating in the autumn? I know I do. I simply don't accept that we will all save vast amounts of energy just because we changed the clocks by an hour.

This is a feeble, daft idea that needs to be completely canned by both parties. And haven't they got more important things to be worrying about anyway?

Filed under: Current issues, Politics with tags british summer time, conservatives, greenwich mean time, idiots, labour
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The unanimous conclusion is that spending over the next two parliaments must be drastically cut.

Good. It's about time we had some more honesty about the scale of our country's finances, which are diabolically bad. The "we must keep spending at all costs" contingent are now outliers, and rightly so.  Their type, which includes Gordon Brown, are completely incapable of controlling the spending tap when times are good and would still call for increased spending even as the bailiffs were starting to carry out the furniture.

Unfortunately for voters, although Alistair Darling appears to have grasped the severity of the issue, he's the one person who cannot be picked as Chancellor by the people. A win for Labour means Ed Balls as Chancellor and, given the hash he has made of the Department for Children, Schools and Families, he won't share Darling's sense of urgency. And it's a pity that the Conservatives, who first made the case for cuts, aren't getting their fair share of the credit.

Even Darling's case is over-egged by The Observer's article - he could and should be doing much more to cut now. Every cut he makes this coming financial year is one that won't be adding go the deficit and will be helping to deliver a lower base from which to make future cuts. Our children demand that we don't make them pay for our fiscal cowardice.

Filed under: Economics, Politics with tags alistair darling, conservatives, deficit, ed balls, gordon brown, guardian
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NYU law professor Daniel Shaviro makes a good point about revisionist naming conventions:

I thought of it recently in the very trivial setting of what name one attaches to the canonical "economic income" definition. It used to be called "Haig-Simons income." But there's been a recent tendency in the literature to call it, instead, "Schanz-Haig-Simons income."

Do we really need the extra name? Schanz was a late 19th century German economist who apparently described something approaching the now-standard economic definition of income (market value of consumption plus change in net worth during the relevant period) before Haig and Simons did so in the U.K. and U.S., respectively, a few decades later.

Okay, fine. People don't always get all the credit that they arguably deserve. But do we really need the extra name whenever we trot out the concept? To start doing this now, more than one hundred years after the fact, strikes me as pretentious, unduly long-winded, and over-scrupulous.

I had a similar reaction when I discovered that the brontosaurus had been made extinct again, this time forever. OK, so it might be more scientifically accurate to say "apatosaurus" but it's still extremely traumatic to tell a whole generation of children that one of their favourite dinosaurs is having its name changed. Who pays attention to scientists anyway?

As a species, we identify something and then we like to give it a name. What something is and what we call it are two separate things. Ray Bradbury, in his short story Referent, played with the notion that how we perceive something can alter its reality. And no doubt somebody thinks that how we describe something is important. But, in the scheme of things, it isn't. It would be better to let sleeping dogs lie.

Filed under: Other blogs with tags apatosaurus, brontosaurus, daniel shaviro, ray bradbury, renaming
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Richard Murphy is happy tonight because

The EU Parliament has voted by 283 votes to 278 votes for a resolution on development issues that called for: a new binding, global financial agreement which forces transnational corporations, including their various subsidiaries, to automatically disclose the profits made and the taxes paid on a country-by-country basis, so as to ensure transparency about sales, profits and taxes.

Multa cadunt inter calicem supremaque labra for those of you who didn't study Latin or isn't able to use Google as well as I can, means "There's many a slip twixt the cup and the lip". And this resolution is, for now, a sort of wishlist for the European Parliament and the Commission will now have to go away and try to get everything they've asked for. I'd suggest it's pretty unlikely that the Commission will be able to get global agreement on this, so it will go away.

Country-by-country reporting is an appalling conceit. It's the idea that some boffin, living in an ivory tower or a shed in Norfolk, can discover tax avoidance and evasion that local tax authorities were unable to find, merely by the provision of detailed segmental information. Given that the Commission is also exploring the idea of a common consolidated corporate tax base for Europe, it is - in respect of Europe at least - a pointless belt-and-braces exercise that will cost a lot but achieve nothing.

Still, the idea has some traction with government here, after some deft lobbying by NGOs. The IASB is running a pilot programme on country-by-country reporting for the extractive industries which will provide some helpful data on the practicalities of applying it more widely; its final report is anticipated any moment now. Stephen Timms thinks it's a good idea. But the view of other stakeholders, according to the ICAEW at least, are much less favourable. If Labour fail to win the next election, it's hard to see the Tories backing the proposals.

Filed under: Current issues, Other blogs, Taxation with tags common tax base, country by country reporting, european union, richard murphy, stephen timms
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He's at it again:

The words “ethics” and “Association of Chartered Certified Accountants” have always been hard to associate. Chas goes out of his way to prove why.

Ritchie doesn't much like Chas Roy-Chowdhury, ACCA's Head of Tax. Chas does have a reputation for shooting from the hip, but his comments here are sensible. Alistair Darling should stop the political stunts and focus on what really matters to the country - getting us out of our economic mess. Wasting resources on lesser matters is a diversion.

What got Ritchie's rag was an earlier comment about tax havens. Chas had said that it was fine to open an account in a tax haven so long as you paid the right amount of tax legally due. That's right - even obeying the law is enough to drive Richard Murphy into apoplexy. His version of how he came to leave the ACCA's research committee isn't quite the way the ACCA tells it. And they weren't the faintest bit sad to see him go.

Filed under: Other blogs with tags acca, chas roy-chowdhury, idiots, richard murphy, tax avoidance
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