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Tag: Accounting

A better way to restore faith in official statistics

Independence for national statistics requires more than frequent repetition of the word independent.

Auditors need to escape the Prisoner’s Dilemma

Quis custodiet custodes? The Latin phrase is a reminder that the question who guards the guards is hardly new. Now regulatory bodies must take responsibility not just for accounting standards, but for standards of accounting.

The past is a poor guide to future share earnings

An average long run value of the equity premium of up to 8% is arithmetically unsustainable: within a few decades, profits and dividends would absorb the whole of national income.

Corporate ‘saviours’ who kill companies

"The best bargain is an expensive CEO," wrote Al Dunlap. The history of Sunbeam decisively proves him wrong.

Ignore the wisdom of accounting at your own risk

Optimism is rife in financial affairs, and so is the claim that today's losses represent an investment in the future. Keeping this in mind, John takes a look at what determines when deficits really matter and when they do not - double-entry bookkeeping.

A vital reality check for would-be investors

Can Google, founded less than a decade ago, really be worth $35 billion? A short guide to the basic economics of asset and business valuation leads to a clear answer.

Tax is bad enough without needless complexity

Sir Christopher Gent and a precinct of policemen provide some insights to our tax system.

Profits without honour

The bullish 1990's market lead companies like Enron and WorldCom to strive for unrealistic earnings growth - eventually by any means necessary. Their stories show that shareholder value should be an end, and not the aim of good businesses.

Look and learn from Enron

Some major lessons can be learnt from Enron's collapse. Here they are, in an easy to remember list

Stiffening the auditors’ backbones (written with Bryan Carsberg)

The debacle of Enron has shaken core assumptions about auditors and auditing . A new accounting standards body needs to be appointed to maintain the integrity of corporate reporting.