The accounts of all companies, from the very largest, to the very smallest, are prepared on the assumption that the organisations in question are microeconomic entities and are, therefore, only of real concern to their shareholders and suppliers of capital.
Thus, though, is an unsustainable assumption in the modern world where large companies, often described as Public Interest Entities or PIEs, which description might cover everything from tech companies, to banks, to supermarkets and energy supply companies, are not just of concern to their shareholders, but are of concern to us all because they are deeply in bedded in the macroeconomy on which we all depend.
In this video I explain that this should give rise to a change in the basis of their accounting and the assumptions on which those accounts are prepared. If that was to happen there would be a minor revolution in accounting, for the benefit of everyone.
This video cross refers to this one.
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Hm, yes…
You make a very, very strong argument, I fully support your minor revolution!
Is there already a definition of what makes a Public Interest Entity? I’m assuming so from the way you talk about them – that the government already has categorised and named the type of entity?
It does seem obvious – they are part of the macroeconomy, and when you point it out what would be the arguments against it?
Again, I didn’t realise there was so little detail reported in large companies’ accounts – has this been purposeful or accidental? Much of the huge company phenomenon seems to come from privatisation of public services, I think – has government, in one way, used privatisation to get out of being accountable (a purely accidental pun) to the public, and so doesn’t want this type of detail to be known?
Sorry, that turned into a big pile of questions – no interesting* discussions from me on this subject, I know so little.
(*in my imagination. Other opinions are available 😉 )(nice touches in irony in the video Richard, and, as always, clearly explained, thanks. I gave up with your report, linked to after the last video, after the first incomprehensible paragraph, so I’ll stick to absorbing some of the more accessible information here! Dunno what I’d do without you explaining everything for the great unwashed, to tell the truth)
Thanks
A PIE is simply a large – likely quoted company – but things like the Big 4 are also PIEs
And company accounts really are exceptionally limited
what are the implications for “asset safety” of all of this?
I am trying to increase asset safety
Right now I rate it as very low
Relevant here is the very distinction between public and private actors. The transformation of the corporation from public to private is charted by legal scholars and political scientists. The conceit that large corporations and MNEs should enjoy the privacy of individuals or households is fiercely defended by entities that are inarguably fundamental to national and international society. An old story beginning in manufacturing, transport, energy, agriculture, and only latterly the giant digital platforms.
Also relevant, on the avoidance/concealment of social and environmental costs, is K.W. Kapp’s old (1950) book The Social Costs of Business Enterprise.
Very interesting but obviously the PIEs have already taken control in many small jurisdictions so it matters very little whether they call themselves MACRO economies or not if single PIEs can exceed them re assets or wealth or whatever else is measured in this crazy world. Besides which the same accountants and other “professionals” operate within or outside the PIEs and the governments of the small jurisdictions. So how any element of effective supervision can be applied I know not – but as usual I am writing about things that are well beyond my clothing allowance or knowledge – but maybe someone can clarify.
You are spot in Mike
Jersey is a perfect example of this
Why are certain points/facts left out. For 40 years so-called corporations have been ‘subsidized/given/free/welfare’ in massive amounts/grants/deferred-forever-loans/and-as-always/tax-cuts’. In my country alone, 685 billion taxpayer monies have been shoveled out to (now) obese corporations–with absolutely no public accounting. This now phony subsidy scam started with corporations begging for taxpayer-loans (remember Chrysler ). Presently a new source of ‘free taxpayer paid for welfare’ has come within global trade agreements–in the form of ISDS (investor-shareholder-dispute-settlements)…any corporations can sue claiming that a law or regulation affects their ‘profits’ and again—taxpayers are (none the wiser) to the payouts. Nice scheme to sidestep the rule of law and every countries Constitution.
Then there’s the 2008 corporate fraud game via derivatives that the IMF now claims will cost—taxpayers (not the corporations and banks that perpetrated the fraud) in excess of 235 trillion (last count-funny eh?). Taxpayers in this scam will see any bank can request ‘a bailout’ and depositors assets are ‘taken’. Most bank bailout clauses are inserted in the annual budget of countries.
Trump went further and passed a law that voided and FDIC involvement, so US banks can simply ask and receive all depositors assets–without paying a cent back.
These are the facts —as bilateral dot org and Wall Street on Parade newsletters have been researching and documenting in ‘financial hearings’ for several years—-and yet no public discussions or hearings on these power abuses have ever been made.
Instead we get generic references to old economic theories/centered on fairer tax times (1945), while real deadly austerity policies are continued ‘fleecing the last ‘free’ taxpayer money left to take’.
Bottom line, it’s always taxpayers who are financially set upon with ‘cleaning up’–corporate or now-our dummied elites asinine business losses/while most are /gambling in derivatives.
And with a certain global health crisis, we are watching as the last vestige of choice in how we use our currency is being taken away too (all digital and thus controllable). None of these ‘realities’ have/are being dealt with and by the mendacity of generalizing everything—they never will till their consequences are finally too obvious to lie about anymore.
Sorry – I could not cover everything
And I entirely agree that business is subsidised – which is one of the things I would want accounts to reveal
I will add it into my thinking
Thank you