The Eye of The Storm

It seems that the ICAEW will soon find itself at the eye of the Northern Wreck storm, as the government has asked it to advise on who (firm of individual) should be appointed as "adviser" for determining the "value" of Northern Wreck.

The bill to nationalise the bank, the Northern Rock Compensation Scheme Order, notes that the ICAEW will have the final say on who will act as "adviser":

"Before making any appointment the Treasury must consult the Institute of Chartered Accountants in England and Wales."

Given that the valuation will determine the compensation that the increasingly desperate shareholders are to receive, the role of "adviser" is considered to be a poisoned chalice.

Whoever accepts the role is likely to find themselves the subject of litigation by the shareholders, keen to take as much from the wreckage as possible.

Phrases "touch it" and "bargepole" are rumoured to have been used by possible contenders.

Good luck to the ICAEW on this.

I am happy to offer my valuation services, and save everyone time trouble and expense.

After due thought and consideration, the estimated value of the Wreck is approximately zero!

Datagate

ICAEW chief executive Michael Izza, reacting to the release of the interim report by PwC CEO Kieran Poynter on "Datagate", said:

"In tandem with the next stage of this review, we believe government should look at the day-to-day operation of HMRC and ensure that it is properly resourced to deliver.

Until this happens, there should be a moratorium on any further job cuts."

Wrong!

The most effective way to turn around the underperforming and failing HMRC is to simplify the tax system, and hence simplify the bureaucracy and cut the staff/hierarchies within the HMRC.

Jobs For The Boys

Dennis Howlett raises a very good question about why is it that the Tax Faculty of the ICAEW, rather than the IT Faculty, are commenting on the recent data loss fiasco by HMRC.

I agree with Dennis, the ICAEW have "missed the mark" on this:

• They should have responded as a body as whole, not allowing an individual faculty to answer



• Their support of a formal independent review, as Dennis rightly points out, begs for yet more tax payers' money to be poured down the ever open gullets of the big four consultancy/accounting firms; producing no real value whatsoever



• The failure of HMRC is down to lax systems and lax attitudes; not costs savings targets, rightly imposed by the Treasury

However, that being said, the most effective cost savings wrt HMRC can only be made when Gordon Brown allows Darling to dramatically simplify the tax system; eg set a single rate of tax, eliminate Inheritance Tax and CGT etc etc.

This is where the ICAEW should be pushing the government, and this is the case that they should be making, not "fannying around" asking for consultants to be hired.

A missed opportunity.

Breaching The Walls of The Bunker

Executives around the world believe that it takes companies slightly more than three years to recover from a crisis that damages their reputation.

That at least is the conclusion drawn from to market research carried out by Burson-Marsteller.

The research is based on the opinions of 685 business "influentials" - CEOs, senior executives, financial analysts, business media and government officials in 65 countries.

It shows that quickly disclosing the details of a scandal or corporate misstep should be management's top priority, as it begins the process of restoring corporate reputation.

The latest research conducted by the firm took a closer look at the crisis
management strategies that a company should use to protect, manage and build its reputation.

According to the market research, the top ten crisis management turnaround strategies are:

-Quickly disclose details of the scandal/misstep (69%)
-Make progress/recovery visible (59%)
-Analyse what went wrong (58%)
-Improve governance structure (38%)
-Make CEO and leadership accessible to the media (34%)
-Fire employees involved in the problem (32%)
-Commit to high corporate citizenship standards (23%)
-Carefully review ethics policies (19%)
-Hire an outside auditor for internal audits (18%)
-Issue an apology from the CEO (18%)

Deborah Bowker, chair of Burson-Marsteller's U.S. Corporate/Financial Practice said:

"A crisis can have a devastating impact on a company's reputation in terms of its profitability, credibility, competitive position, and ability to retain and attract top performers.

However, companies can lessen their recovery time and be welcomed back into the fold, with their reputation restored, if they follow a few well executed and integrated turnaround strategies."

Bearing in mind the long list of recent disasters that the ICAEW have inflicted on the membership, and the brand value, of the ICAEW; including, but not limited to, the following:

• The failed merger


• The unseemly public row with ICAS over the name


• Poaching members from other bodies


• Using the services of Media Strategy, a PR company that breached the Code of Practice of the Association of Professional Political Consultants


• Postponing the new exam syllabus until 2007


• Not introducing and ethics paper until 2007


• The Durgan Debacle


• The failure to publish the results of the investigation into the Durgan Debacle


• The failure to conduct an independent review/investigation into the causes of the Durgan Debacle

Do you not think that the ICAEW should take heed of the above advice from Burson-Marsteller?

I certainly do!

The question is, are the ICAEW open to advice from outside the Moorgate Place bunker?

CCAB

I see that the Consultative Committee of Accountancy Bodies (CCAB) has finally got its website back up and running.

As the site states:

"CCAB provides a forum in which matters affecting the profession as a whole can be discussed and co-ordinated, and enables the profession to speak with a unified voice to government."

So we needed a merger for why?

Media Strategy

I understand that the ICAEW are using the services of Media Strategy, a PR firm based in London, to help them sway the membership in favour of the merger.

Media Strategy describe themselves, on their website, as being:

"London's fastest growing agency, specialising in corporate communications and government relations..."

I wonder what their advice to the ICAEW will be, and how much it will cost us (the membership)?

Audit Commission Criticises Quality of Public Sector Accounts

The Audit Commission has identified that councils do not take the process of preparing, or publishing, their accounts seriously enough.

The Commission noted that 25% of submitted accounts have to be resubmitted, because of significant errors.

The Commission highlighted "significant" departures from UK GAAP, the Commission is also concerned at the delay in bringing the local government systems into line with UK standards.