Idiot is idiot

Conviviality goes down. Who does the Egregious Professor complain about:

Guess who the auditors are? KPMG. Again. To add to a long list of failed audit clients who have gone from boom to bust very rapidly in the recent past.

Auditors manage the finances of a business do they? Or just check, once a year, that the counting has been done properly?

15 comments on “Idiot is idiot

  1. A reminder that Ritchie is perfectly capable of arguing with himself….

    https://www.theguardian.com/money/2000/jan/16/workandcareers.madeleinebunting1

    “Why do auditors seem to make such a poor job of spotting fraud? One factor, says Richard Murphy, a partner at accountant Murphy Deeks Nolan, is a massive expectation gap about what auditing can and can’t do. Despite unshakeable general assumptions to the contrary, he says, auditing (like accounting in general) is a subjective, not objective, discipline representing an opinion, not a certainty.

    ‘Put five accountants in a room with the raw figures,’ says Murphy, ‘and they’ll come up with five different profit figures, all legitimate. Accountants and companies understand that, but regulators, users of accounts and governments want it to be black and white.'”

  2. The Financial Reporting Council are on KPMG ‘s back about Carillion. From my brief perusal of the group’s last accounts it seemed odd that KPMG had not flagged up any concerns. But auditing a large company is practically a full time job these days. Simply to produce and review the hundreds of pages of crap that is required takes months of effort and yet they come out within a few months of the year end for most listed companies. Compare with unlisted companies who take 7 or 8 months to file their annual returns

  3. Conviviality’s downfall is much less clear-cut than Carillion ‘s. The last accounts don’t show much in the way of warning signals. It looks as if they expanded too rapidly and lost control of the business. As usual Captain Potato is flogging someone else’s horse

  4. The last accounts were for the year ended 30 April 2017! And they look pretty healthy apart from an increase in debt. I can’t find any warning signs there apart from the rapid growth in sales and debt. The margins and working capital ratios all seem stable… What does Spud see that I don’t?

  5. And looking at what’s happened, the wholesale arm was sold off to the people who own Magner’s Cider. The retail arm has just been sold to a wholesale chain who can supply it. The only people who’ve really lost out are the banks who lent too much and didn’t rein back the manic expansion. Isn’t this pretty much capitalism working exactly as it’s supposed to?

    https://www.theguardian.com/business/2018/apr/06/bestway-jobs-deal-bargain-booze-owner-conviviality

  6. Well, it is KPMG (Murphy’s former employer) who of all the Big 4 come in for particularly vitriolic ire from the rotund becardiganed Prof.

    On what terms did Murphy actually leave KPMG when, according to him, he was rated so highly by them?

  7. BraveFart

    “On what terms did Murphy actually leave KPMG when, according to him, he was rated so highly by them?”

    Another one of the fat man’s flights of fancy.

    He said he was told he could make partner.

    Every single new entrant to every single firm of accountants will be told ‘you could make partner’.

    Because you could. In theory.

    Only Egoman could think this was aimed specifically and solely at him.

  8. “Every single new entrant to every single firm of accountants will be told ‘you could make partner’.”

    Ditto management consultants. I’ll bet every management trainee joining every multi national is also told that the could be CEO one day.

  9. The stats for the Big 4 are that every graduate recruit is told they *can* make partner. 3% actually do.

  10. Does anyone know what happened to the offspring of the Peats, Coopers, Deloittes, Touches, Youngs, Waterhouses etc? Michael Peat went to work for his wackyness Prince Charles – effectively nudged out of the firm. Lord Benson died without leaving a Cooper at the head of the firm. Arthur Andersen were brought down, deservedly, by Enron – what a bunch of arrogant holes!

    Anyone who extols the virtues of partnership obviously never met a partner in a major practice. I never met one who got anywhere close to seeming human. And they encouraged the same sociopathic traits in their staff.

    You can see why Spud is so resentful. He is enough of a sociopath to be a partner but something let him down……

  11. @Diogenes

    However sociopathic they are, Big 4 partners do generally know their stuff. Or if they don’t they are adept at hiding it.

    Spud’s ignorance shines out like a lighthouse on fire which has been floodlit on a cloudy moonless night.

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