economic situation is dire

[Risso]

On another angle, but relevant to the discussion, when assessing companies for credit (we do not use credit insurance for UK business) one of the checks is whether the accounts are audited. This is an immediate tick if they are audited by one of the big houses, as our view is that they would not sign off on anything dodgy.

If they are audited by a firm that we haven 't heard of, then we check that firm out as well, before applying the tick.

 

All audits should theoretically be carried out to the same standards.  Although if you get one that Jonno's done, I'd refer them on to Wonga.com instead.

[thetrees]

 

On another angle, but relevant to the discussion, when assessing companies for credit (we do not use credit insurance for UK business) one of the checks is whether the accounts are audited. This is an immediate tick if they are audited by one of the big houses, as our view is that they would not sign off on anything dodgy.

If they are audited by a firm that we haven 't heard of, then we check that firm out as well, before applying the tick.

 

All audits should theoretically be carried out to the same standards.  Although if you get one that Jonno's done, I'd refer them on to Wonga.com instead.

 

Should being the operative word.

I have seen situations where signed off accounts are actually made up bullshit.

[jonno_2004]

 

 

On another angle, but relevant to the discussion, when assessing companies for credit (we do not use credit insurance for UK business) one of the checks is whether the accounts are audited. This is an immediate tick if they are audited by one of the big houses, as our view is that they would not sign off on anything dodgy.

If they are audited by a firm that we haven 't heard of, then we check that firm out as well, before applying the tick.

 

All audits should theoretically be carried out to the same standards.  Although if you get one that Jonno's done, I'd refer them on to Wonga.com instead.

 

Should being the operative word.

I have seen situations where signed off accounts are actually made up bullshit.

 

Must have been one of mine!

[peterms]

I don't believe for one second that there's 'widespread, systemic and deliberate fraud" that the Big 4 accountancy firms are complicit in.  There's just too much regulation, and for the Big 4 to be involved then the professional bodies, who review audit engagements, would be too.

In the article I linked, Ian Fraser asks whether it's collusion or incompetence, as it must be one or the other.

 

Some light reading about the grotesque failings of the big 4:

 

E&Y charged with collusion in Lehmans.

 

PWC pay to get off being charged over MF Global, same for Deloittes and Bear Stearns.  (It's common theme that big accountancy firms get to pay a large sum of money instead of being prosecuted).

 

PWC and Bank of Africa.

 

KPMG and HBOS, the bank that moneylaunders for murdering Mexican drug cartels.  (Rather puts the Co-op chairman's £300 of coke into perspective)

 

Speaking of the Co-op, it's KPMG again.

 

Bill Black on the general picture, and his book on the subject.

 

And of course no discussion of the failings of auditors would be complete without the wonderful Richard Murphy and his discussion of their role in taxdodging.

 

What a bunch of shysters.  Should be closed down, the lot of them.  Any normal firms would have been.

[jonno_2004]

Light reading, indeed.

[peterms]

Interesting to see the Bank of England explaining that economics textbooks are wrong to state that bank lending comes from deposits.  BoE explicitly recognises that making loans creates new money out of nothing, and the "money multiplier" model is wrong.

 

What next?  Asking the question "So why do we allow private banks to create new money at will and charge interest on it?"  Or "What if the Government were to create this money, instead of pretending they had to "borrow" it?"

 

It's a slippery slope...

Martin Wolf in the FT (article is firewalled, but doing a Google search on a specific phrase from the quoted bit should give a working link to the article - the firewall blocks direct links, but allows links from searches).

...subcontracting the job of creating money to private profit-seeking businesses is not the only possible monetary system. It may not be even the best one. Indeed, there is a case for letting the state create money directly. I plan to address such possibilities in a future column.

[Morley_crosses_to_Withe]

Interesting stuff, Peter.

There's a company, who I don't need to name, who are currently raking in obscene amounts of cash from an administration they're overseeing. Funnily enough...this company also does auditing work.

Now the cynic might suggest they really wanted this particular entity to go under because they knew the administration fees would far outweigh anything they'd make from auditing.

[Rovers13]

It doesn't really expand the money supply. Bunch of bullshit

[mockingbird_franklin]

It doesn't really expand the money supply. Bunch of bullshit

actually you're right, in so much as there is no longer any money, just debt which is traded, and it increases the amount of debt in circulation, an IOU is a debt. a promissory note is nothing but an IOU, bank of England notes are nothing more than promissory notes. bank loans are creation of more debt fueled by an IOU, a promise to pay something back, with other promissory notes, our currency is debt. belief is all that gives it value

 

you are also true in that it doesn't increase the amount of bank of England IOU notes, it increases the amount of independent bank and personnel  IOU currency, which is treated as interchangeable at a 1:1 rate and indistinguishable for accounting purposes from bank of England IOU's that is our legal tender. seeing as most of the economy takes place as pure accountancy entries rather than transfer of bank of England notes it effectively creates and introduces into the economy huge amounts of bank currency, which whilst effectively counterfeit currency still increases the currency supply. so if you are confusing our currency with money, then in fact, to all intents and purposes it does increase the 'money' supply but in a way that allows banks the control to also contract the supply for commercial advantage

Edited April 11, 2014 by mockingbird_franklin

[mockingbird_franklin]

It doesn't really expand the money supply. Bunch of bullshit

the actual amount of increase in the supply has been on average 11.5% each year for the last 40 years through private banks creating money out of thin air, or rather getting customers to create it, then treating it as gift to the bank

Edited April 11, 2014 by mockingbird_franklin

[mockingbird_franklin]

It doesn't really expand the money supply. Bunch of bullshit

another fact to digest

 

From the time when the Bank of England was formed in 1694, it took over 300 years for banks to create the first trillion pounds. It took them only 8 years to create the second trillion.

 

maybe you would like to reconsider your opinion,

Edited April 11, 2014 by mockingbird_franklin

[peterms]

It doesn't really expand the money supply. Bunch of bullshit

I dont understand what youre saying. What doesn't expand the money supply?

[MakemineVanilla]

I was grateful to Channel 4 News last night, as they were the only news program which bothered to explain, the actual reality behind Osborne's much vaunted 0.9% economic growth, which he is doing his best to take credit for.

 

The truth is that the UK has become less productive and the average person is producing less than they were before the economic crisis.

 

GDP per capita has fallen by 5% and the only reason the economy has grown is because the population has increased.

 

So in actual fact the country has got poorer and less productive under the present government and it is a sad reflection on our so-called 'free' press, that they are not too keen to tell us.

 

From this it is plain to see why all governments are obsessed with increasing the population and why no party's promise to limit immigration can ever be taken seriously.

[colhint]

But didn't the population also increase when GDP was falling?

[ender4]

Boom times are coming to the UK... job market buoyant, wages increasing, house prices increases, deficit falling, feelgood factor back in flow... bring on the good times!

[Kingfisher]

Zero hours contracts are more prevalent than previously estimated according to an ONS study.

http://www.theguardian.com/uk-news/2014/apr/30/zero-hours-contracts-uk-over-one-million-people

Zero hours, low pay, no pay ...boom.

[blandy]

 

I was grateful to Channel 4 News last night, as they were the only news program which bothered to explain, the actual reality behind Osborne's much vaunted 0.9% economic growth, which he is doing his best to take credit for.

 

The truth is that the UK has become less productive and the average person is producing less than they were before the economic crisis.

 

GDP per capita has fallen by 5% and the only reason the economy has grown is because the population has increased.

 

So in actual fact the country has got poorer and less productive under the present government and it is a sad reflection on our so-called 'free' press, that they are not too keen to tell us.

 

From this it is plain to see why all governments are obsessed with increasing the population and why no party's promise to limit immigration can ever be taken seriously.

I liked the post, but the last bit's wrong, IMO. I don't think any party is obsessed with increasing the population. Quite the reverse.

[peterms]

I was grateful to Channel 4 News last night, as they were the only news program which bothered to explain, the actual reality behind Osborne's much vaunted 0.9% economic growth, which he is doing his best to take credit for.

 

The truth is that the UK has become less productive and the average person is producing less than they were before the economic crisis.

 

GDP per capita has fallen by 5% and the only reason the economy has grown is because the population has increased.

 

So in actual fact the country has got poorer and less productive under the present government and it is a sad reflection on our so-called 'free' press, that they are not too keen to tell us.

 

From this it is plain to see why all governments are obsessed with increasing the population and why no party's promise to limit immigration can ever be taken seriously.

 

It's a simple fact that immigration increases national wealth in most cases, obviously.  The exceptions being cases like Brits emigrating to Spain, lots of older people needing health care but doing no productive work at all.

 

We should encourage the former, and try to make sure parasitic "pension tourism" doesn't get to epidemic proportions.

[colhint]

 Presuming you wouldn't want people from other countries  to become parasitic pension tourists here, Doesn't that sound like a ukip policy? Only let in people you want.

[snowychap]

Boom times are coming to the UK... job market buoyant, wages increasing, house prices increases, deficit falling, feelgood factor back in flow... bring on the good times!

Really?

We never learn, do we?