I find this amusing

The cases include two instances of an auditor and a senior manager in the audit client getting intimate. When the most basic rule of auditing is independence you have to wonder how far professional ethics have fallen when firstly the auditors in question let these situations continue and secondly others did not intervene to effect changes.

Superficially this look like a minor issue; actually it’s about an environment in which the most basic of rules are not complied with. And that’s worrying.

This from the bloke who goes dating at Quaker meetings.

62 thoughts on “I find this amusing”

  1. Haven’t read his article but from the above extract, I’d agree with him – compromising professional judgement.

    The auditor (and possibly both of them) would have some explaining to do to keep their jobs.

    If they’re looking for love, a Quaker meeting might be the better place.

  2. In fairness to the LHTD, there’s no actual rule against cruising for ass at a Friends’ meeting. There is a proscription for auditors. Unlike anyone on here to defend the Murphmeister but in this one instance he kind of has a point. Stopped clocks and all that

  3. Might that TRUK blog not be the sort on which the likes of Rocco Siffredi could make useful comment with real professional insight?

  4. There’s nothing inappropriate in auditor and client shagging each other, provided the relationship is declared and not concealed. Management can then make a decision about whether there’s a conflict of interest.

  5. He’s not wrong that a concealed relationship could lead to a CoI. He is wrong it trying to link it to a wider structural issue. There’s no real evidence that this sort of thing is getting more common or that it’s a function of professional ethics not being properly taught.

    Given the source, he probably just thinks that everything would be better if he were in charge.

  6. Anecdote has it that a lot of church-hoppers, at least in London, are doing so in the hope of finding someone “respectable”/”serious” to settle down with. Probably not a stupid idea really.

    There’s a case for opening an urban branch of the Young Farmers as a secular alternative.

  7. I am glad he thinks this is concerning, however, I have to say it palls into insignificance when we consider the primary example of ‘The Curajus state’ in action – taken from an NGO report:

    ‘The economy remains both centrally planned and grossly mismanaged. Development is also hobbled by a lack of infrastructure, a scarcity of energy and raw materials, an inability to borrow on world markets or from multilateral banks because of sanctions, lingering foreign debt, and ideological isolationism’

    ‘Freedom of assembly is not recognized, and there are no known associations or organizations other than those created by the state. Strikes, collective bargaining, and other organized labor activities are illegal.’

    ‘All domestic media outlets are run by the state. Televisions and radios are permanently fixed to state channels, and all publications are subject to strict supervision and censorship. ‘

    ‘Corruption is believed to be endemic at every level of the state and economy, and bribery is pervasive.’

    ‘Government control over society is absolute and information about the functioning of government is tightly controlled both to domestic as well as to external audiences.’

    Next to a man advocating adopting these kind of characteristics across UK society, inappropriate relations between auditors and the audited take on rather less importance I think…..

  8. “Auditors’ character must be impeccable.”

    Says who? If every auditor had to have an impeccable character, there’d be no auditors.

  9. I am not sure what he is complaining about. Sure, the auditors and clients acted inappropriately and unethically, but they have been punished, which means that they were detected, and E&Y fined $9m. How much policing of private lives is possible, even in a corajus state? Should auditors be neutered?

    Is he implying that such relationships are rampant, as friend Rocco would say?

    In another of his posts, he applauds Sweden for giving a tax break on repairs? Good luck with policing that!

  10. I have often thought that Church seems like a good networking opportunity. My problem is that I don’t believe in any of it.

  11. It is interesting to note that in his blog about honesty, Murphy refers to a ‘friend’ on a dating web-site. Given the rumours surrounding the state of his marriage I wonder if the ‘friend’ is in fact him?

  12. Diogenes

    I think it was possibly the Great AndrewC who surmised that almost every one of Murphy’s proposals falls apart if subjected to sustained analysis for more than 10 seconds.

    I find it hilarious that he is so down on Conventional economic theory as being ‘unrelated to reality’ when the assumptions he makes about human nature i almost every one of his proposals are one’s one of my small children might think overly optimistic. In terms of how much policing is possible within a Curajus State – look at the paragraphs above, taken from an NGO report on one of the main Curajus states in existence at this very moment or look at the briliant film ‘Das Leben des Anderen’ and you will see the kind of society Murphy would create, albeit I imagine even he would not willingly defend either of the countries in question..

  13. Given the numbers of people working in Audit, and comparable numbers actively involved on the client side… plus the fact that these people will often be similar in background, intellect, interests etc, it’s inevitable that uglies will bump.

    Firms and clients cannot stop this, but they can, and should, have reasonable policies requiring disclosure. If the policies exist then individuals who keep it quiet are at fault and, possibly, in breach of professional standards. If there are no policies the firms are at fault… but given the HR capture of the top firms I find that implausible.

    Richie, though, is a twat who’s open hatred of accounting firms means that nothing he says about such issues counts as anything more than the twisted ravings of bitter little lunatic.

  14. “you will see the kind of society Murphy would create”

    I was working with a Polish colleague when a communist march went past us in Central London. He simply said “clearly none of them ever tried to get a washing machine under communism”.

  15. When I worked at a Big4 the on-site audit teams were at it like rabbits. This was mostly kept within the team between the young juniors and new grads. Frankly, I couldn’t blame them. Stuck all day doing tedious grunt work then all back to the same hotel on expenses for a bit of (hopefully) less tedious grunting work.

    Not a surprise that it spills over into client-auditor as well, but the more senior ones should be more careful.

  16. @Blue Eyes “Church seems like a good networking opportunity. My problem is that I don’t believe in any of it.”

    Come to our church. I think you’d fit right in with the rest of the congregation. I have always assumed that most of them come because it is the only place round here that you could get a drink before 12 o’clock on Sunday.

  17. Bloke in North Dorset

    “Anecdote has it that a lot of church-hoppers, at least in London, are doing so in the hope of finding someone “respectable”/”serious” to settle down with. Probably not a stupid idea really.”

    My wife assures me that’s what her sister did.

  18. “There’s a case for opening an urban branch of the Young Farmers as a secular alternative.”

    I doubt that the denizens of the Young Farmers are either very serious or respectable……………….

  19. I met my wife at a church youth club. They had girls there….
    At school was just a sausagefest, at home the only girl I fancied had a boyfriend already.

  20. Anyone read the Nassim Taleb article on the IYIs – the Intellectual yet Idiots? Do these bits remind anyone of a certain person?

    “The IYI pathologizes others for doing things he doesn’t understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests, particularly if they are “red necks” or English non-crisp-vowel class who voted for Brexit. ”

    “Typically, the IYI get the first order logic right, but not second-order (or higher) effects making him totally incompetent in complex domains.”

    Down to a T I’d say………

    https://medium.com/@nntaleb/the-intellectual-yet-idiot-13211e2d0577#.bej0ip5hr

  21. @Blue Eyes…

    I was working with a Polish colleague when a communist march went past us in Central London. He simply said “clearly none of them ever tried to get a washing machine under communism”.

    If they’re like the marches I’ve seen in the past, I’d venture to suggest that most of them haven’t attempted to get one in the UK either!

  22. Tim

    Although almost everything that Murphy says, writes, thinks or (I imagine) does is a hoot, the consequences of what he proposes are very far from a laughing matter.

    As VP tirelessly points out, he is on all fours ideologically with the regime in Nth Korea.

  23. I used to be able to rely on the Daily Mash when these grey-area arose, but seems to have gone a bit mainstream.

    What happened?

  24. Bit of a stretch to go from couple of people breaching rules and guidelines and acting unprofessional to criticising the whole profession as systematically being corrupt

  25. Jim
    Thanks for the link: very interesting. But I have to say that Taleb’s piece reminds me of a sun-sign horoscope — so general that it could fit so many people, including the Murphatollah, many in the commentariat and some closer to home. In general, Taleb’s point seems to be that we are educating far too many people beyond the level of their intelligence.

    A good general education – in maths, science and the humanities – engenders scepticism and develops the ability to detect nonsense and bullshit. And, clearly, the Murphatollah hasn’t had a good general education.

  26. Blue Eyes:

    “I have often thought that Church seems like a good networking opportunity. My problem is that I don’t believe in any of it.”

    That’s what the Church of England is for.

  27. “A good general education – in maths, science and the humanities – engenders scepticism and develops the ability to detect nonsense and bullshit.”

    I’d say that some experience of the more practical parts of life and life in general engenders scepticism and the ability to detect bullshit more than education. Thats the trouble – we have lots of people who are very ‘educated’ but have never rodded their house drains. People capable of the latter will be far more grounded and able to spot bullshitters than some who thinks such things are beneath him (or her).

  28. Taleb’s article would be better if:

    a) he could actually write; and
    b) he hadn’t included the bizarre reference to GMOs.

  29. “That’s what the Church of England is for.”

    Come come. You don’t have to believe anything sky-fairy related to be in the Quakers. Just generally in advising people and not forcing them, and not punishing them for not agreeing with you.

  30. @Jim

    ‘I doubt that the denizens of the Young Farmers are either very serious or respectable……………….’

    Fucking hell, beat me to it. YFs of my experience (admittedly a few years back now) are neither of those things.

  31. “we have lots of people who are very ‘educated’ but have never rodded their house drains”

    As I was shoulder-deep in the drain inspection chamber scooping out the muck I did wonder “so this is why I did a Computing Science degree”.

  32. I’m not sure having rodded your drains is a good measure of practicality. Quite the opposite in fact. Costs maybe £60 to get someone to come and do it for you. Pretty much any other thing you can do yourself to save £60 will be preferable to deconstipating your drains.

  33. @Dave: “I’m not sure having rodded your drains is a good measure of practicality.”

    I didn’t say it was a measure of practicality I said it was a marker for people who have a healthy sense of scepticism and ability to spot bullshit.

    You wouldn’t be a ‘Climate Change’ believer by any chance would you?

  34. “I’d say that some experience of the more practical parts of life and life in general engenders scepticism and the ability to detect bullshit more than education.”

    Yes, up to a point. A practical man is unlikely to be taken in by BLM UK or Laurie Penny, whereas a semi-educated numpty with a media studies ‘degree’ might swallow the lot whole.

    “Thats the trouble – we have lots of people who are very ‘educated’ but have never rodded their house drains.”

    Anyone who rods his own drains places a low value on his own time, and so is probably not the sharpest knife in the drawer, or poor.

    “People capable of the latter will be far more grounded and able to spot bullshitters than some who thinks such things are beneath him (or her).”

    Is there any evidence that those who rod their own drains are better than those who don’t at recognising bullshit and nonsense? The crap in the tabloids and the fact that a third of the electorate still vote Labour suggests otherwise. Furthermore, without a basic understanding of maths, logic, causality etc, the drain-rodders aren’t going to see the sort of errors that TW often exposes here – eg Waitrose and house prices, shipping container prices. Practical intelligence is a fine thing, and it can complement rational analysis, but it’s no substitute for it.

  35. “Anyone who rods his own drains places a low value on his own time, and so is probably not the sharpest knife in the drawer, or poor.”

    No. He’s discovered that Dynorod won’t come ’til Monday & it’s not necessary to spend a hot weekend with the reek of shit.

  36. Thanks to Sarbanes-Oxley, I was involved in dozens of audits. On the client side. We didn’t like being audited. Had we found such dirt on one of our auditors, they would have never worked again.

    In late 1972, as I entered corporate America, one of the first things I was taught was, “Don’t get your meat where you get your bread.”

  37. Oh, and Jim>

    I’m a big fan of the scientific consensus on climate change now – because these days the grownups got involved, so it’s ‘what’s alarming isn’t credible, what’s credible isn’t alarming (and a carbon tax)’.

    Why is it so unsurprising you haven’t realised that war was won several years ago?

  38. Yes, division of labour and comparative advantage. I have an agreement with the people from whom I buy potatoes that if they stay out of writing software I won’t grow my own spuds. Works marvellously. Mongbat would no doubt sniff disdainfully at the idea.

  39. Jim

    “I doubt that the denizens of the Young Farmers are either very serious or respectable”

    True, rather different end of the market. But many a lad or lass in the back of nether-beyond has faced the gruelling choice, when considering where they might get to mingle with the opposite sex, between the Young Farmers and the Young Conservatives.

    (And at least with the Young Farmers, an eligible chap might be in line to inherit the farm….)

  40. I cleaned my drains when I was in my early 20s, and so yes my time was cheap. And when you have no money it’s irrelevant how much you value your own time when the alternative to cleaning your drians yourself is you drains not being cleaned at all – not having them cleaned by somebody else. And partially, it’s just a task of being alive. It’s like saying “I refuse to wipe my own arse because it would be cheaper to pay somebody else to do that.”

  41. “Anyone who rods his own drains places a low value on his own time, and so is probably not the sharpest knife in the drawer, or poor.”

    Do you have any idea what Dyno rod charge?

    https://www.dyno.com/prices/drains

    £90 to unblock a U bend. £145 to rod a drain. Not sure what you earn per hour, but in my world spending 20 minutes with a set of drain rods (£30 at Screwfix) to save £145 is a reasonable return on my time.

    What was that about not being the sharpest knife in the drawer?

  42. jgh>

    “It’s like saying “I refuse to wipe my own arse because it would be cheaper to pay somebody else to do that.””

    If it was, I would. Luxury or what?

  43. Jim>

    Unblocking a toilet is one thing, when the sewer backs up it’s time to call someone. Dynorod are ridiculously expensive. I had a guy come to Knightsbridge on short notice the other day for £80, and I’m sure if it was outside central London and I’d looked around more I could have found someone for about half that.

  44. @Gamecock 7:12

    I have also heard this phrased as:

    “Don’t fish off the company pier”
    “Don’t dip your pen in the company ink”

    The latter sounds more offensive somehow, possibly because of its proprietorial overtones.

  45. “A practical man is unlikely to be taken in by BLM UK or Laurie Penny, whereas a semi-educated numpty with a media studies ‘degree’ might swallow the lot whole.”

    Perhaps this is the point at which Dunning-Kruger falls down. A person with some moderate intelligence is more likely to find the nuance in a situation, to doubt their own (culture’s) superiority too much and consequently fall victim to cultural relativism. Whereas someone a bit less intelligent would not doubt that cunts who throw gays off buildings, are indeed, cunts.

  46. Jim

    There are cheaper options than Dynorod. My nearest Screwfix store is 17 miles away, so an hour for the return journey + parking charges + cost of the kit. Then doing the job and cleaning up – including showering, washing the overalls etc – might be another 60-90 minutes. And then there’s the opportunity cost: I could be relaxing in the pub by the river. Life is just too short to waste doing shit tasks, particularly as you grow older.

  47. Magnusw>

    The funny thing about Dunning-Kruger is that almost no-one realises the paper was just a joke, stating the obvious.

  48. “Anyone who rods his own drains places a low value on his own time, and so is probably not the sharpest knife in the drawer, or poor.”

    Mowing your own lawn, I agree. A slow job, and gardeners are cheap.

    But drains? Depends on how often they block up. If it’s once in a blue moon then it’s not worth buying the equipment and working out what to do. But out here in the sticks, with a cess pit rather than mains drainage, the outside drain will usually block up a couple of times a year.

    So I’ve got the equipment. It takes 2 or 3 minutes to unblock, another couple to hose things down, then a quick shower (the need for which is purely psychological; unless you’re utterly incompetent it really only needs a hand wash).

    All done and cleared away in less than a quarter of an hour and £80 saved; that’s equivalent to earning £400 per hour before tax (£480 if you’re VAT-registered). OK, there is better paying work (and I’ve done some of it), but it’s hardly putting a “low value” on your time.

    Also I’d spend more time than that finding the plumber’s number, ringing for him to do it and dealing with him when he finally turns up. And it’s cleared and working straight away rather than the day after tomorrow.

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