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What bankers and MPs have in common

'We are profoundly and, I think I would say, unreservedly sorry at the turn of events,' said one. 'We are sorry at the effect it has had on the communities we serve.'

Another commented: 'There is a profound and unqualified apology for all of the distress that has been caused and I would not wish there to be any doubt about that whatsoever.'

And a third added: 'It has affected the communities in which we live and serve; it has clearly affected taxpayers; and we are extremely sorry for the turn of events that has brought it about.'

So which three MPs were prepared to speak so hair-shirtedly about the expenses scandal?

Well it wasn't any of our 'honourable' members. These were comments made to the Treasury select committee earlier in the year by former RBS chairman Sir Tom McKillop, his former chief exec Sir Fred Goodwin and Andy Hornby, former chief executive of HBOS.

But in themselves - and you're probably ahead of me here - the words don't sound so dissimilar to the apologies issued in recent days by messrs Brown, Cameron and Clegg.

It was no wonder the front page of City AM screamed earlier in the week: 'Don't lecture us, says City.'

And therein lies a big problem for the Brown government and Cameron's government in waiting.

The problem of overclaimed expenses - and all the attendant disingenuousness, messenger-shooting and general stench - weakens politicians' hands in all sorts of ways.

When an MP is called upon to condemn perceived City greed in the future will his or her words ring that bit more hollow? When a minister urges public sector workers to accept a depressed pay claim because of the tough financial climate, will it invite allegations of hypocrisy?

Of course it will.

I won't comment on the claims themselves, some of which appear to me completely reasonable while others simply beggar belief. (It's the extremes of the latter that have seen the former questioned). But just as public confidence in the financial system has been fundamentally dented, so it has in politics.

Governance failures, audit failures (internal at least) and ethical failures stretch from Westminster to the Square Mile.

Recovering from this position is a priority for both the City and the Commons. To do so the banking and political classes will have to learn from the other's mistakes. And they may have to work together in ways they never expected.

It's not turning into a vintage year is it?

CIMA loses ground in FTSE100 FD ranking

I was pleased to see that in these troubled times the number of FTSE100 FDs who hold an accountancy qualification is now higher than it was a decade ago - according to a new survey in next month's Financial Director.
The ICAEW has strengthened its grip, accounting for 55 or the 80 FDs with an accountancy qualification, compared with 51 of 79 in 1998.
Much, much more interesting was the significant change in the number of CIMAs in the boardrooms of this elite group of companies. There were 15 in 1998 and after a decade of expansion in membership and growth in influence, surely that was a number that would have climbed since?
Not a bit of it. Today, there are only eight.
Some, like Tesco's Andy Higginson, have moved into very senior operational roles. But that alone doesn't explain such a sharp and unexpected deline.

From auditors to Jacqui Smith: it must 1 April

There's a few April Fool's stories knocking around today - though given all that's happened in the last six months a lot of the 'real' stories of late appear more fanciful than the hoaxes. Some - inevitably - involve Jacqui Smith (The Daily Mail, oddly not online), others Twitter. (The Daily Telegraph has an early round-up).

I do like to believe this one from Accountancy Age's is genuine. But perhaps I'm wrong.

This week we're mainly tweeting

We're also running another experiment this week. I'm easily taken in by these things so I've been playing with Twitter in recent weeks. It's been to moderately useful effect though I wouldn't say I'm a convert quite yet. To test it further I've asked a partner in a small accountancy firm to tweet for us this week.

Paul Windsor of Wimbledon-based firm WSM is in Cannes for the annual property industry jamboree, Mipim.

Rather than blog, I thought the briefer, more immediate posts that Twitter demands might be more approriate. See what you think here.

Hear from Lehmans' and Woolies' administrators

In a piece in The Times this morning, detilaing the surge in legal work from the all the administrations we've seen in recent months, two high profile exponents of the art are identified: Tony Lomas of PricewaterhouseCoopers (who is working on Lehmans) and Deloitte's Neville Kahn (working on Woolworths).

I would agree. Lehmans is the biggest and most complicated administration the world has ever seen, while dismantling as iconic a brand of Woolies has brought considrable attention to Kahn.

Last week he was also involved in the administration of Mosaic - the fashion retail group that comprises Oasis, Warehouse, Karen Millen and Principles among others - and the use of a pre-pack saw all but Principles and The Shoe Studio sold to managament.

Here at Accountancy Age we're delighted to have persuaded Lomas and Kahn to share a stage at later this month at the London Stock Exchange. Both are appearing at a special breakfast briefing on 27 March.

Forgive the plug: but to reserve your place click here.

Guardian contests Tesco tax dispute bill

The Guardian is contesting the £800,000 costs bill it was served by Tesco after its coverage of the supermarket's tax affairs.

As Accountancy Age reported last week, the bill included £87,000 paid to Ernst & Young and a six-figure sum paid to legal firm Berwins, which also advised Tesco's solicitor Carter Ruck during the dispute.

Writing in The Guardian yesterday, editor Alan Rusbridger said: 'At The Guardian we have just been presented with a bill (which we are contesting) for more than £800,000 by lawyers acting for Tesco, which, everyone agrees, had every cause to be upset by a Guardian story that made serious errors about taxes it had avoided.

'Our journalism was faulty: Tesco deserved, and got, an apology and correction, not once but twice. But the costs of the action dwarfed any damages, claimed, proven or agreed.'

It can't be a coincidence that the government today announced a review of excessive costs in defamation cases.


How big is too big?

My fellow blogger Martin Williams posts a question that many of us are asking at the moment: Just how big is too big when it comes to an audit client?

On the face of it, it would seem that that line was crossed in the Madoff and Stanford cases (whose auditors the relatively tiny firms of Frieling and Horowitz and CAS Hewlett respectively). But where should the line be?

Martin's asked for coomments - feel free to leave them here too.

Wat next for the FA?

I was sorry to see the Football Association overlooked Alex Horne in its hunt for a new chief executive. The FA's chief operating officer - and former Accountancy Age Personality of the Year - was an exceptionally strong candidate.

Having delivered the new Wembley Stadium and run much of the show since chief executive Brian Barwick left the building last year, Horne must have made the decision to go with an outsider an extremely difficult one.

That outsider is Ian Watmore, a name that cropped on none of the speculative shortlists drawn up by countless sports writers.

Most recently Watmore headed the prime minister's delivery unit; before that he was the government's IT tsar.

But it was in his prior role at Accenture that I bumped into him.

Watmore, an Arsenal fan, was head of Andersen Consulting UK when it split acrimoniously with the accountancy side of the business (so he knows about infighting - and that experience will serve him well as the FA with its unwieldy board structures).

And he's no slouch in the presentation stakes either - I remember he even managed to put a positive spin on Accenture's national insurance recording system contract - one of the most controversial of any government partnership with the private sector.

And his spell at the heart of government will have given him political nous. That will be an invaluable skill as he attempts to balance the competing demands that the job brings.

One of his predecessors as FA chief executive, Mark Palios, once told me he would never forget his first day on the job. He was greeted by thousands of letters, emails and messages from people that ranged from schoolchildren to pensioners offering him advice on what he should be getting on with.

What other job brings that?


Guardian bill in Tesco tax dispute tops £800k

You'll remember in September last year that The Guardian was forced to apologise to Tesco over reports that the supermarket was improperly avoiding tax.

It accused - and forgive me if I stick to the wording of an agreed statement between the two parties - the supermarket of creating an elaborate off-shore corporate structure to avoid paying up to £1bn in UK corporation tax on profits from the sale of its UK properties, and that it had already successfully avoided corporation tax on the £500m profit it made from its first two property sales.

Headlines included 'Tesco's £1bn tax avoiding plan - move to the Cayman Islands' and 'Every little bit helps: tax free pot of gold at end of Tesco's rainbow'. After a protracted dispute, a thorough apology and retraction was issued ('We now accept that these damaging allegations were unfounded and should not have been published'.... 'We accept that Tesco was not hypocritical' etc).

The paper did of course also agree to pay a sum by way of damages to a charity of Tesco's choice and a payment by way of costs.

And now details of those costs have emerged. Speaking at a journalists' conference yesterday, Guardian editor Alan Rusbridger revealed that Cater Ruck - engaged by Tesco in the action - had issued the paper with a costs bill of £804,000, running to 56 pages.

According to Press Gazette magazine, Rusbridger said that 'the £804,000 figure "bears no relation at all to the damages claimed" and, pointing to the bill, he said: "To read this document you would weep for the cause of freedom of expression in this country".'

As an editor I winced.

Online filing: HMRC vs. the IRS

There was a nice transatlantic contrast in online filing stats out this week.

HMRC reported that the number of taxpayers filing returns online leaped 53% this year. It amounted, said the taxman, to half a million more than it expected - with 5.8m taxpayers filing online by deadline this year.

During the peak period - between 4pm and 5pm on 30 January - HMRC's system received 37,500 online returns, the equivalent of ten every second.

And here at Accountancy Age we've heard very few systems complaints which is encouraging and indicates a better performance than last year.

(The main problem pointed out to us was the unwillingness of HMRC's Euston Tower office to accept cheques in person last weekend).

Contrast this with the situation in the US, where the Internal Revenue Service has reported a near 10% drop in e-filing from tax professionals.

In fairness more individual taxpayers are taking advantage of free software to file themselves which may account for the drop.

But on this evidence at least it seems the UK is embracing online tax filing more enthusiastically than the US.

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