Skip to main content


Showing posts from 2018

The role of an auditor

The role of the company auditor is commonly misunderstood.

To help clarify the the limited responsibilities of auditors, reference is often made to the immortal words of Lord Justice Stopes in the Kingston Cotton Mill case: "The auditor is a watchdog not a bloodhound".
Many years later this phrase was famously corrupted by an aspiring young accountancy student. During an examination where he felt under significant time pressure he wrote, in evident frustration: "The auditor is a watchdog, not a bloody greyhound".

When Allan was an accountant on the streets

Many years ago I met Allan Kutner at a local club for aspiring speakers. 

Allan was a city-based Chartered Accountant who told a wonderful story about his early years. I encouraged him to send it in to Accountancy Age who duly printed extracts in their ‘Taking Stock’ back cover feature. 

I recently traced a copy that I must have retained over the years and am delighted to be able to record it on this blog for posterity:

Allan’s hope was that his cautionary tale would help others to overcome the stigma and guilt that society instils in accountants.
After exhibiting an early obsession with maths Allan says that he started going up the city and hanging round Threadneedle Street. 
“I’d go up to business men and ask if they wanted an audit” he writes. “At first they would just look at me disgustedly and rush off. But gradually some would stop and ask ‘how much?’. I would tell them – for a full audit and typed report, £250. But if they just wanted an interim and handwritten report, I’d do it for…

What Big 4 accountancy partners do outside of the office....

A newly qualified accountant in one of the larger firms was having a celebratory drink with some of the partners in his firm.

They were encouraging him to take an interest in professional affairs - as they all did.

''What do you do,'' he asked. One said he was on the local branch committee, another chaired a tax discussion group, a third was a practice support member.

The oldest partner was unusually coy and then announced that his involvement in professional affairs was limited to making regular appearances in disciplinary hearings after clients complained about his work.

One of his fellow partners was quite new to the firm and was astonished to hear this. Later the new parter asked if what he'd heard was really true, that the older partner made regular appearances in disciplinary hearings after clients complained about his work.

''Oh no'', came the reply, ''The senior partner's a member of the Financial Reporting Council; he's just …

Synonyms for accountants

Some of the newer synonyms I've heard for accountants include:

The books banditA double entry deviantThe financial first ladyA financial wizardThe finance fairyA journal jugglerA month end maniac The prince of payments  Any more?

The Public Accounting Anthem music video

This well crafted rap video of his 'Public Accounting Anthem' explains the career history and professional life of CPA qualified accountant Petty Ca$h.

5 acronyms of interest to Accountants

I'm a bit of an acronymaniac. Here are some that might be useful for accountants.

We've all had them. Challenges or things that don't go as we hoped. We might smack our forehead in frustration. Maybe January was an AFLO for you this year. Another Flipping Learning Opportunity!

Maybe this is your approach when talking with clients about your service offerings: Take It Or Leave It

An approach to following up after attending networking events: Deliberate Acts of Relationship Enhancement.

Another way of explaining why the senior partner gets the last word. It's because it's the Highest Paid Person's Opinion.

What you might think of these acronyms. They offer a GLIBO: Glimse of the Bleeding Obvious

Fun names for Inspectors of Taxes

I heard a lovely true story recently about an Inspector of Taxes whose name was Mr Millions.  he worked for the Inland Revenue - in the days before it was rebranded as HMRC.

Many years back before the self assessment system started, Inspectors would 'list' appeals against estimated assessments for hearings before the General Commissioners. And then accountants would routinely call the Inland Revenue to ask for the hearings to be postponed.

This Tax Inspector often had to handle these calls and adopted a standard response when answering his phone. He said: "Millions, no jokes please!"

Which parrot should be in the accountant's office?

An accountant went into a pet shop to buy a parrot for company in his office.

The shop owner showed him a pretty parrot on a perch and explained that it was ideal for an accountant as it knew some mild swear words but only used them when it heard someone say  "HMRC".

The accountant asked how much it was and the shop owner said it was only a hundred pounds.

The accountant felt he could invest more than this so asked if there were any other parrots.

"Certainly" replied the shop owner. "This blue one doesn't swear at the taxman but he will learn your clients' names and greet them personally whenever they come into your office. This one is for sale at one thousand pounds".

This was more than the accountant wanted to spend so he asked the price and talents of a third parrot that was sitting quietly in the corner of the pet shop.

"Aha" said the shop owner. "That's the most expensive parrot. It costs five thousand pounds".

The acc…

The altruistic dead accountant

An Accountant dies and goes to heaven.
Saint Peter starts asking him all the usual questions required to get into heaven.

The accountant, it seems, has repeatedly helped people cheat on their taxes and embezzle funds.

Finally, in exasperation, St Peter asks, “Well, have you ever done anything good, anything totally unselfish and altruistic in your entire life?”

“Well,” says the accountant, “Once I saw this pretty lady being beaten up by a bunch of hoodies. So I yelled “Hey jerks, why don’t you pick on somebody your own size” and then I reached for my mobile phone to call the police, and took off running. They forgot about her for a second and she managed to run also.

Saint Peter asks, “I’m looking through the book of your life, and I don’t see this incident recorded. When did it occur?”

The accountant replies, “About five minutes ago.”

The interchangeable accountant

I love this story of the interchageable accountant.

Peter spent ages asking around his local area and getting positive testimonials. He eventually chose a very reputable firm based on several recommendations.

Unfortunately, the day he went for his appointment he was running late and inadvertently walked into the accountants next door to the one he was supposed to be visiting. They said they had no recollection of his appointment (not surprising really), but sent him to an office really quickly and in no time he was talking to his new accountant.

Peter says he has since been really happy with the service they provide and wouldn't change them. He's glad he did all that research!

7 ways to avoid winding up your tax adviser

Your tax adviser leads a stressful life dealing with HMRC (the Taxman) and cannot cope with you being depressed as well.

Your tax adviser's ethical code requires him to be objective and independent.

You must appreciate that tax IS DIFFICULT and an occasional experience of negative income is only to be expected.

Unfortunately the jargon inherent in tax matters is not compatible with explaining it to someone like you in a way you would understand.

Though the planning may be ineffective and cost you a lot, the resulting thesis on the deficiencies of such schemes may result in the tax adviser acquiring further letters after his name.

It is a…

Do accountants make the best patients?

Five international surgeons are discussing who makes the best patients.

The Danish declares: "I like to see accountants on my operating table, because when you open them up, everything inside is numbered".

The African  surgeon replies: "Yeah, but you should try electricians! Everything inside them is colour coded."

The German surgeon observes: "I think librarians are the best, everything inside them is in alphabetical order."

The American surgeon points out: "I like construction workers. They always understand when you have a few parts left over."

The British surgeon shuts them all up by pointing out that: "Politicians are the easiest to operate on. There is no guts, no heart, no brains and no spine, and the head and the derriere are interchangeable."

Putting accountants out of business

In 1965 the Chancellor (Jim Callaghan) introduced his Budget Speech with the prophecy that he would so simplify the system that accountants would be put out of business.

The 1965 Budget is particularly memorable as it introduced two new concepts - Corporation tax and Capital Gains Tax.

At the time, tax specialist Adam Broke was a newly married breadwinner. He was initially concerned that perhaps there would be no future for tax advisers. He recalls that the Chancellor's ambitions were thwarted by the inclusion in his proposals of "small minded concepts such as close companies".

As a result, Adam spent only milliseconds worrying whether he had chosen the wrong career.

Little has changed over the years. Each tax change that purports to introduce simplicity into the tax system is similarly bedevilled by undue complexity, oversights and 'small minded concepts'.

4 quotes about the tax system

"The income tax has made liars out of more Americans than golf."

"Who is the figure behind every great man, the individual who knows his ultimate secrets? A father confessor? Hell no, the tax expert."

"A tax loophole is something that benefits the other guy. If it benefits you it is tax reform."

"Taxation with representation ain't so hot either."

"I'm proud to be paying taxes in the United States. The only thing is - I could be just as proud for half the money."

The News Quiz insults Accountants

On 18 May 2018 panellist Jeremy Hardy on Radio 4's News Quiz commented on negative press comment about big 4 firms of accountants, This was in the context of the failure of Carillion.
He suggested that Carillion is what you might call a number that’s a million times higher than a number any sane person would think of. And added: 
"I’m a bit jealous that there are high rolling accountants. Mine’s quite lacklustre in comparison to that lot.  I just give him a carrier bag full of receipts and he keeps me out of prison. That’s all that happens."
There was a later reference to a phrase in a select committee report “Carillion was brought down by a combination of recklessness, hubris and greed”
Which prompted fellow panellist Simon Evans to respond: "Recklessness, Hubris and Greed sounds like a good name for the accountants".

Married at First Sight: Accountants stuck in a bad marriage

What follows is an entertaining analysis of the merger of two accounting bodies as if they had met and married in 2014 in a lavish ceremony agreed by their respective members.
Together, the lovers formed CAANZ, an alluring acronym which stands for Chartered Accountants Australia and New Zealand.  The great promise of this matrimony of professional bodies, as laid down in the nuptial documents, otherwise known as the Explanatory Memorandum to the merger, has not lived up to its vows.  Perhaps it is a case of haste to the alter. NZICA appeared only borderline solvent before the marriage. It was the ugly duckling which somehow married a swan, albeit a worn out old swan, with sweet talk and forget-me-nots in an Explanatory Memorandum. As the private equity turnaround merchants say: “You only have to look good for the wedding day.”  Since the nuptials,  the New Zealand bride seems to have been on a frolic with the marital credit card, spending up in the Shaky Isles and apparently taking li…

Do accountants laugh?

"Do accountants laugh?" was a question posed online by top Comedy Magician, John Archer ahead of a gig for accountants.

Among the replies he received were:
It depends on their clientsOnly where they lose their balanceWhen it's at someones else's expenseYes, when their balance sheet balancesAs soon as you pay their bill

A new supplementary page for SA tax returns: Application for Mercy

Original is on the clever and fun official looking (but fake) website promoting a book published by Ian Vince:The Department of Social Scrutiny

How many accountants are witch doctors doing magic?

In a 1964 speech British law lord, Lord Justice Harman, told an audience: ‘Accountants are the witch doctors of the modern world and willing to turn their hands to any kind of magic.’
I note that this quote has appeared on dozens of firms of accountants' websites.

(You need to know me to know why that quote so appeals to me. There's a clue in this much earlier posting on this blog)

What do taxi drivers know about tax?

Many years ago I travelled by train to Penrith in Cumbria, to present a talk to the local CIOT branch. In the cab I then took to reach the venue the driver asked me what I was doing in Penrith and I explained:
“I’m here to give a lecture to a group of tax advisers”. For a moment I was thrown as he seemed very miffed. It then became clear from his reply that he had misheard me: “It would be nice to have been invited. I’ve been a taxi driver here for over ten years!” I was unable to keep a straight face!
I shared the story during my talk and at the tea-break one of the delegates came over to explain she’d had a similar problem recently.
When arranging her car insurance by phone, she was astonished by the premium quote. It was more than 8 times what she had paid the previous year. She queried the figure and was told this was due to her profession, and the risks inherent in this. “What are the inherent risks of being a tax adviser?” she asked. At which point it became apparent the insurer…

Yes Prime Minister - How the Treasury work out how much tax to raise

In January 1986 the political comedy " Yes Prime Minister" featured an episode "The Smokescreen" in which The Prime Minister, Jim Hacker, favours abolishing smoking through heavy taxation but he runs into strong opposition from the tobacco lobby and the Treasury department.
The following exchange between the PM and his permanent secretary seemed especially worthy of inclusion on this blog:

Sir Humphrey: Taxation isn't about what you need.
Jim Hacker: Oh, what is it about?
Sir Humphrey: Prime Minister, the Treasury doesn't work out what they need to spend and then think how to raise the money.
Jim Hacker: What does it do?
Sir Humphrey: They pitch for as much as they think they can get away with and then think what to spend it on.

Here's the whole episode if you're interested. At the start Sir Humphrey explains his view as to how all new Prime Ministers want to cut either taxes or public expenditure.....

Don't Cha Wish Your Accountant Was Cool Like This

Well done Accountant Annette Ferguson.  Great video revealing those thins Accountants NEVER say - and with good reason!

Are HMRC scared of witches putting spells on them?

Some years back the Romanian government passed a law to tax the income of witches, fortune tellers, and astrologers.

Associated Press had previously reported that Romanian senators rejected a proposal to tax witches and fortune tellers. The suggestion was that they were scared of hearing those feared words:
"Abracadabra, we'll turn all of you into toads!" At that time the draft law would have required witches and fortune tellers to produce receipts, and would also have held them liable for wrong predictions!

The BBC then reported that the witches were using cat excrement and dead dogs to cast spells on the government for making them pay income tax. Apparently Magic and superstition in Romania are taken very seriously. The president and his aides wear purple on Thursdays, allegedly to ward off evil spirits.

Somehow I can't imagine HMRC being worried about wrong predictions. They get enough of these from 'experts' ;-)

Abracadabra - economics and tax

"Abracadabra, thus we learn the more you create, the less you earn.  The less you earn, the more you're given, the less you lead, the more you're driven, the more destroyed, the more they feed, the more you pay, the more they need, the more you earn, the less you keep, And now I lay me down to sleep. I pray the Lord my soul to take, if the tax-collector hasn't got it before I wake."
Ogden Nash, American Poet, 1902-1971

A Valentine message for an Accountant

Debits are left Credits are right When I looked at you Love at first sight.
Roses are Red Violets are Blue Balanced Ledgers Have me thinking of you
Unbalanced Accounts 
Are near misses Perfect though
Are your hugs and kisses
Fraud makes me sad You make me glad
Please be my Accountant Valentine

How to simplify the PAYE system (or not!)

I'm told that an official from HMRC, who wishes to remain anonymous, has identified two key changes that would simplify our PAYE system and avoid most problems:
Stop anyone from having more than one job at a time; andOnly allow people to change jobs at midnight on 5 April each year. No - I don't think they were serious.
Do you have any other ideas in a similar vein?

Analogies for how HMRC operates

If HMRC ran a cafĂ© it would drag passers-by in from the street,  force them to cook their own lunch,  then fine them for overcooking the eggs. 
Two weeks later, it would dispatch a leaflet explaining that cooking eggs is easy!  But doubling the fine.

This analogy formed part of Richard Godwin's Comment piece in The London Evening Standard on 21 December 2011.

Can you do better?

"Now that's what I call Tax Advice!"

Years ago I spoke at a large ACCA meeting at the Fairfield Halls in Croydon. Just before I was introduced, Steve, an eagle eyed accountant asked me about the third set of initials after my name on the title slide projected on the screen. After my FCA and CTA (Fellow) I had included MMC.

I explained this was a bit of fun as they are the designatory letters for members of The Magic Circle (and, yes, I am a member, indeed, I am now The Treasurer). Steve then told me that he had an unusual hobby too. He said he was a poet.

The following day I received an email from Steve containing a poem he had written for me to deliver. I loved it - but never performed it as I can't do all the tricks he references!

The Third Person to Ask (aka : Now That’s What I Call Tax Advice) Though it is true I can produce a rabbit from a hat I’d rather extol savings from the flat rate scheme for VAT The sleight of hand required in Three Card Monte I do know But ways to grow your practice is what I’d prefer to sh…

Another accountant goes to the doctor.....

An accountant knocks on the door of the local GP's surgery and walks in.
"Hello, doctor. Please help. I just don't know what's wrong with me. Goodbye." With that the accountant turns around and walks out.
30 seconds later they are back. "Hello again, doctor. Please help. I just don't know what's wrong with me."

The Doctor looks up from his desk and asks: Are you an accountant?"


 "Ok, In that case I think it's obvious. You have a serious case of double entry."

An accountant goes to the doctor.....

"Doctor, doctor, I've taken the medicine you prescribed but it's not working. What should I do?"
"Try using your calculator."
"How will that help?"
"I'm not sure, but it's something you can count on".