Financial Power List 2011

My thanks to Accountancy Age for placing me (at 42) on their Financial Power List for 2011. I also appeared in the list in 2006.

The list identifies the top 50 who will wield the most influence over the future direction of accounting.

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Ernst & Young To Go The Way of Andersen's?

The Times reports that Ernst & Young (E&Y) could face legal action after a $38M 2,200 page US report into the collapse of Lehman Brothers accused E&Y of professional negligence over a number of years before the collapse of Lehman Bothers in 2008.

The report states that Lehman's used Repo 105 (an accounting "fudge") to remove temporarily up to $50BN from the balance sheet.

The report criticises Ernst & Young, who were Lehman's auditors:

"..for among other things its failure to question and challenge improper or inadequate disclosure in those financial statements".

Could it be that Lehman's will do for E&Y what Enron did for Andersen's?

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Gerson Lehrman News

I write articles covering business issues for Gerson Lehrman News, and am an Accounting & Financial Analysis Council Member (AFA Council Members include CFOs, former top regulatory body officials, partners from the world's leading accounting firms, academics, forensic accountants, and other financial executives).

The news articles can be accessed via this link Gerson Lehrman News.

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AIA Accountant of The Year

Following on from my earlier note, about being nominated for "Accountant of The Year" for The Association of International Accountants (AIA), you may be interested to know that I have made it through to the finals.

Ken

AIA President's Awards 2007

Congratulations to the finalists and to all those who were short listed. Winners will be announced at the President's Dinner on 21 November 2007.

AIA Accountant of the Year

Finalists
Ken Lever, Helen Weir, Ken Frost.

Short listed
Ken Lever, John Griffith-Jones, Helen Weir, Jon Symonds, John Connolly, Ken Frost.

Criteria

An award designed to recognise organisations' accountancy stars. Firms, businesses and institutes are encouraged to make nominations, though individual entries are also welcome. Open to all qualified accountants whether in business, practice or public services.

• Nominees must have demonstrated sound judgment, technical skill, innovation and leadership ability.


• Nominees must have demonstrated dedication to clients.


• Nominees must stand out from their colleagues as an accountant who has made significant impact, taking into account the length of their career in accountancy and any notable obstacles they have had to overcome.


• Nominations should include any work related activities undertaken and broader contribution to the profession.


• Nominations should include their contribution to the community.

Source AIA

The two other finalists are:

Ken Lever

Finance Director Tomkins plc
Age: 52

Appointed to the Board of Tomkins plc in November 1999. He is a non-executive director of iSOFT Group plc. He is a Chartered Accountant and a member of the ICAEW Financial Reporting Committee and Chairman of the Hundred Group Financial Reporting Committee. He has held executive directorships at Albright and Wilson plc, Alfred McAlpine PLC and Corton Beach plc and was a partner in Arthur Andersen.

Helen Weir

Group Finance Director Lloyds TSB

Joined the board in 2004. Group finance director of Kingfisher from 2000 to 2004. Previously finance director of B&Q from 1997, having joined that company in 1995, and held a senior position at McKinsey & Co from 1990 to 1995. Began her career at Unilever in 1983. A non-executive director of Royal Mail Holdings and a member of the Accounting Standards Board. Aged 45.

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Nomination

I am now back in the UK, having had a very sucesssful business trip to Pyongyang, and thought that you may be interested/amused to see that I have been nominated for Accountant of the Year for the Association of International Accountants (AIA) in the AIA President's Awards 2007.

The Association of International Accountants (AIA) was founded in the UK in 1928 as a professional accountancy body and from conception has promoted the concept of "international accounting" to create a global network of accountants in over 85 countries worldwide.

AIA is constantly working with its people and partners in financial centres worldwide to encourage trust, clarity and shared international standards in the accounting profession. Many of its members are at the top of the industry, from senior management to director level, representing some of the most important and profitable firms in the world. With a select membership demographic including high numbers of these influential decision makers, the AIA is a truly prestigious organisation.

The award is designed to recognise organisations' accountancy stars. Firms, businesses and institutes are encouraged to make nominations, though individual entries are also welcome.

Open to all qualified accountants whether in business, practice or public services.

• Nominees must have demonstrated sound judgment, technical skill, innovation and leadership ability


• Nominees must have demonstrated dedication to clients


• Nominees must stand out from their colleagues as an accountant who has made significant impact, taking into account the length of their career in accountancy and any notable obstacles they have had to overcome


• Nominations should include any work related activities undertaken and broader contribution to the profession


• Nominations should include their contribution to the community

Best regards

Ken

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Bricks and Mortar

The increasing reliance of the British economy on the housing market was revealed yesterday, when the government released figures that show that a staggering 60% of the UK's £6.5 trillion wealth is now tied up in property.

The Office for National Statistics (ONS) said that the value of Britain, if it were up for sale, has risen by over 5% (an increase of £326BN in 2005).

The increase was more than accounted for by the rise in the market value of Britain's housing stock.

The ONS figures show that the wealth of the UK is now highly sensitive to movements in the housing market, particularly given the declining importance of manufacturing to the economy.

Britain is now worth £6.5 trillion, with the UK housing stock accounting for £3.9 trillion of that figure.

The trouble is that a large factor within the "value" of the housing stock is that of speculation, rather than fundamentals.

This bodes ill for the economy as a whole, given that speculative bubbles have an annoying tendency to burst.

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What Use Are Consultants?

Those of you who ever wondered what use consultants are, and whether they really represent value for money, should take heart from the findings of the all party Public Accounts committee.

The committee has lambasted the government's waste of £2BN per annum on external consultants, deriding it as "sheer profligacy".

The committee said that given such amounts of expenditure it was "impossible to believe that the public are receiving anything like full value for money".

In 2005-06 the public sector in England spent approximately £2.8BN on consultants, a staggering increase of 33% pct over the previous three years, with central government accounting for £1.8BN.

The bulk of the increase came from higher spending by the National Health Service.

Quote:

"Central government is repeatedly using consultants for core skills, including project and programme management and IT, and is increasingly turning to a select list of suppliers."

Committee chairman Edward Leigh said:

"Departments are often on the phone to consultants without first finding out whether their own in-house staff have the skills to do the job.

Departments routinely do not agree with the consultants any measurable benefits to be expected from the contracts. And consultants are often paid simply on the basis of the amount of time worked and not on what the work has achieved.

What would we say of anyone in private life who dealt with contractors like this? The consultancy firms are truly on to a good thing.

It is impossible to believe that the public are receiving anything like full value for money from this expenditure. In fact, a good proportion of it looks like sheer profligacy."

Quite!

The consultants know that with this government, they have a prone cash cow begging to be milked to death; the government know that they need not worry about funding the bill, as all they have to do is raise taxes.

Everyone's a winner, except for the taxpayer!

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HMRC Porposals Not Fit For Purpose

The Institute of Chartered Accountants of Scotland (ICAS) have put the boot into HMRC proposals on tax penalties.

ICAS describe the proposals as "not fit for purpose".

In a press release issued today, ICAS say:

"The single penalty regime for non-payment or underpayment of taxes proposed by HM Revenue & Customs is not fit for purpose, according to The Institute of Chartered Accountants of Scotland (ICAS). Responding to HMRC’s consultation document, ICAS spells out two main problems with the proposals.

The legislation would introduce new concepts about what behaviour is reasonable, whilst failing to define what is expected of the taxpayer. This means that the ultimate arbiter in any dispute would be the tax inspector."

The question is, will HMRC listen?

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