FTSE 100
Dow Jones
Nasdaq
CAC40
Dax

Friday, 26 April 2013

Hodge Podge

The irrepressible (shame really) Margaret Hodge and her PAC has come up with what she claims is a damning report on the cosy relationship between the Big 4 and government.

True enough, while one side of the accounting firms is picking the pocket of government departments  advising on PFI and privatisations, another side is marketng tax avoidance to its corporate clients.  Reminds me of a story I heard about Glenda Jackson at a party in London before she was famous, but that dear reader, is a story for another day.

Anyway, the relationship between the Big 4 and government is not that cosy, simply because the respective government departments never talk, neither do the partners in the Big 4 talk across departments, or at least not very much.  On the one hand they have the audit departments who do pretty much wha it says on the tin, plus sometimes some generic technical accounting advice for non-audit clients.  And when companies can no longer get their accounts signed off as a going concern, the Big  have their Corporate Recovery and Insolvency practices.

Then there is the tax department, often with a legal bit attached, which is there primarily to review the tax accounting for audit clients, but also helps individuals and companies in tax compliance, tax disputes.  They also come up with tax ideas, tax avoidance if you will, and offer companies help in "structuring ther affairs".  Last of all comes the corporate finance arm, which also includes a bit of whatever consulting they can do without falling foul of Sarbanes-Oxley.

Note to David Cameron:  that last bit was where your hot whizz-kid "accountant" Chloe Smith, fast tracked into a ministerial position worked on a spreadsheet jockey desk at Deloittes.  She may not know about insolvency, which side of a T-account to put a debit, nor whether a liabilty to capital gains tax may be reduced by a brought forward deficit on non-trading loan realtionships, but she does know that cell C1 is probably equal to A1 + B1.

Anyway, back to La Hodge.  Her main complaint is that one of the tax spivs at KPMG worked for the gummint on a draft of tax legislation designed to incentivise R&D by giving tax breaks.  No complaints about the work that was done for the Treasury, but shock horror, when the bean counter went back to his old job, his firm started selling his services as an expert on the subject, putting out marketing materials asking clients "What's in it for you?".

God forbid that after the government has decided to promote investment through tax breaks that any accountant should go round offering his services to explain how the new legislation actually works.

2 comments:

webwrights said...

It seems, this morning, that the ghastly woman may be about to get her comeuppance, if Guido Fawkes is to be believed about her recently knocking over a cyclist in her car - while on the phone.

He's certainly more credible than her absurd claim that she was not on the mobile while driving, although she "was holding the phone at the time".

Maybe she's not quite so irrepressible, after all.

webwrights said...

Oh, how very disappointing. She was parked up and opened her car door on him. The first reports had her driving.

Move along, please. Nothing to see here.