So taxation is a risk

Everybody has to pay taxes so taxation is business as usual, but some companies consider taxation a risk with statements like this: They “ worry about potentially negative consequences from changes in or interpretations of tax laws and how they might affect the results of operations, cash flows and financial condition.” But Johnson & Johnson…

Internal control: same words different meanings yet again

I was taught that internal control was the processes around the safeguard of company assets. But that was in the 1970’s, and life has become more complicated since then. So complicated that accountants now disagree on what internal control really is. Or to be more precise British accountants have a different definition to American ones….

Audit matters are key

Non-accountants might consider it logical that audit reports in the UK are seven times longer, than those in USA or Europe, sometimes even longer. [1] After all, auditors in the UK certify that financial statements are TRUE and fair whereas they only need to certify they are FAIR elsewhere, or to be more precise fairly…

A real risk but they cannot tell us about it

One real risk relates to cyber security. Companies today cannot survive without adequate cyber protection. This risk gives them a chance to spray buzzwords in their risk statement, to fill out its importance and to show how serious it really is. The list is long: ‘cyber attack, malicious intrusion, breakdown, destruction, loss of data privacy,…

Headroom made me smile

I recently discovered a new accounting term in the 2022 annual report of Associated British Foods: headroom.  I had always thought this was the space between the top of my head and the ceiling. However a more figurative meaning of headroom does exist meaning: ‘freedom of action’, and perhaps accountants have adapted this meaning to…