I have been sent lobbying materials submitted by the Institute of Chartered Accountants in England and Wales to interested parties in Europe on country-by-country reporting, amongst other things.
The European Commission has proposed that a very limited form of country-by-country reporting for the extractive industries be included in the revised EU Transparency Directive. The ICAEW's response is:
There are two ways of construing this. The first is that they are wilfully ignorant of the purpose of financial statements, which are not, despite their claim solely for the use of markets. They are also intended for the use of 'other users' - a fact they ignore, presumably purposely. It is scandalous that the ICAEW think that accounts should only serve market interests. It shows how corrupted the organisation is that it has reached this low point.
Second, they are undoubtedly ignorant of the use of country-by-country reporting data. It has vastly wider use than the deliberate misrepresentation that they apply to it. Amongst other things that data is intended to:
- Tackle corruption;
- Tackle governance risk;
- Report on geographic risk;
- Provide enhanced data on tax risk;
- Reveal likely tax haven risk;
- Provide information on trade flows and vertical supply chain risks;
- Provide labour data to assist determination of employment policy risk;
- Give information on risk with regard to sanctions compliance;
- Disclose the true nature of a company's social responsibility;
- Give an indication of the company's commitment to development.
But apparently none of these matter to the ICAEW.
It's literally a scandalous abrogation of responsibility on their part that they can make such claims. This member is ashamed of them. I hope others are too.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I am ashamed of the ICAEW too. Did they read Andrew Goodall’s article about Marta Luttgrodt in Accra,Ghana who
sells SABMiller’s Club beer at her small beer and food stall in the shadow of the brewery. She has, according to ActionAid, ‘paid more income tax in the past two years than her neighbour and supplier, which is part of a multi-million pound global business’
http://andrewgoodall.typepad.com/blog/2012/05/tax-avoidance-poverty-and-country-by-country-reporting.html
“despite their claim solely for the use of markets”
They did NOT claim this. They said “primarily equity and debt capital providers”. Primarily does not mean solely. By all means criticise them for their opposition to CBC. But if you are going to do so then at least take the time to understand what they are saying.
I have
And that’s what they’re saying
Primarily means in their parlance data for any other purpose should not be included
As is very obvious from what they say
“…extraneous information – however important for other purposes – that is not first and foremost aimed at meeting investor needs risks cluttering the financial statements and obscuring important data”.
It seems quite clear to me. They rule out including any other information that is not about meeting the needs of the investor. They even go as far as adding “even if it’s REALLY REALLY important”. As far as I can tell there’s not any other way of interpreting this.
What’s even more bizarre, is that having worked for a company where I’ve been responsible for proposing investment decisions, I would never imagine turning down the opportunity for more company information. If you’re investing money (especially your own) you want as much information as you can, however ‘irrelevant’ it might seem. It all gives you an insight into possible risk. The idea that an investor might say “you know what, it’s OK, I don’t need to see that profit break-down” is incredibly odd. Or maybe corporate investors these days have more money than sense (or time?).
Agreed
This is bizarre by the ICAEW
Why are they acting against shareholder interests?
Because there is no other explanation for this behaviour
Not surprised though I’ll bet.
The Institute is controlled by the big firms and their clients are the very people who benefit from tax avoidance and the big firms love those tax fees.
Isn’t it about time that regulation of auditors was made separate from the members club as with solicitors?
Yes!
[…] the ICAEW campaign against the transparency that would expose this […]