I love the drivel that comes from some people when arguing about regulation. Take the introduction of international accounting standards to the US.

The US regulator has set a roadmap for introducing voluntary use of the standards which have been in force in Europe since 2005 and are being adopted by many other countries at quite an exceptional pace.

The US has been among the most the reluctant to get on board until the current SEC chief Christopher Cox came along and gave them his backing.

Cox believes enormous benefits will accrue to US business if they use the standards, not least that they compete much better for capital.

However, not everyone over there sees it the same way. Senator Jack Reed argued that investors could be put at risk by allowing standards to be regulated by a less aggressive regulator.

Let's unravel this. First, the IASB does not enforce IFRS. It writes the standards, but national regulators and legislators must adopt them and then enforce them. If the US decides to use them, the US will have to enforce them. Simple as that. The IASB is merely there to determine the best rules.

Secondly, this smacks of quite a persistent train of thought that somehow people outside the US cannot set decent rules and that somehow control must be handed over.

A little mistaken of course because Enron and WorldCom did not happen over here.

The introduction of IFRS is now open for consultation over the next 60 days. All manner of objections and views will be submitted. But expect this undercurrent: 'We can accept the logic of IFRS, but we must control the standard setter.'

Given its current independent status, and the very fact that independence is partly responsible for its success so far, that would be a pretty far reaching demand and one we should be rightly nervous about, especially if it gains any traction among US politicians and regulators. Yet another bit of pressure coming to bear on the IASB? We'll see.

August 29, 2008 | Permalink | Comments (4)

Last year's Accountancy Age Personality of the Year award winner Alex Horne is moving back to the Football Association, where he was once finance director, to become chief operating officer.

Currently the MD that turned around things at Wembley Stadium, Horne is a braver man than I for taking on a top job at the FA. The history of football's ruling body is littered with the battered and wounded careers of others who have tried to exert some authority in what is clearly one of the most high profile and challenging environments for an executive to work in.

Here's a potted history. Adam Crozier, a marketing guru, went after intense criticism of the out-of-control spending on Wembley Stadium. Mark Palios had to leave after becoming embroiled in a sex scadal with secretary Fair Alam, who had also had an affair with the then England manager Sven Goran Erikson. Brian Barwick, current CEO, is on notice after falling foul of chairman Lord Triesman and going through the controversy that followed his appointment of Steve McClaren as England manager.

From this we can discern some important advice for anyone taking on a senior role at the FA, especially as Horne is being touted as being among the most influential people now ensconced at Soho Square.

Firstly, consider carefully whether the people you are appointing are qualified for the job. Make sure you stay on budget. Lastly, keep you trousers on.

Actually, there is something else you have to do for a successful time at the FA. Win something. That might be a tournament, or it could be success at winning the bid for the 2018 World Cup.

My guess is that Horne is more than able to avoid the pitfalls of predecessors. The bigger question will be whether he is able to lead the team to a win. The new job is arguably more high profile than anything he has done so far, there will be more press attention than ever before. What will be crucial is keeping a single minded focus on the job.

Given the bear pit that is UK football administration, he will need to draw on all his experience and skill to keep things working. You've got to wish him luck.

August 22, 2008 | Permalink | Comments (0)

So the Deloittee annual report is out and we learn that chairman John Connolly earned a whopping £5.7m.

Despite running the second largest firm in the country he must be the highest paid accountant in the country in practice. I venture to suggest, and I do not have proof at my finger tips, that he must be the highest paid practice accountant ever.

It's astonishing. More impressive is that the average pay for more than 650 partners is £970,000. It's arguable that Deloitte might just be employing an historic number of millionaire partners.

Given that figure, and the fact that Deloitte turns over £2.01bn in the UK (beating this year's self imposed £2bn target), I bet there aren't too many within the firm that begrudge him that pay packet.

Still, it's interesting to note that if he were in a public company, there might well be taunts of fat cat pay. As it is Connolly only has to satisfy the other owners of the business. His partners. Wonder if they ever consider complaining about his remuneration?

Of course, there's another way to see this. Connolly needs a pay day commensurate with his belief that his firm has overhauled its rival in terms of reputation. His wage slip has certainly overtaken everyone else's.

August 15, 2008 | Permalink | Comments (2)

I am intrigued to read of research that concludes that US CFOs are not exactly smitten with Barack Obama as a presidential prospect.

Produced by the US Financial Executives Institute and Baruch College's Zicklin School of Business, the survey of a little more than 200 CFOs says that 70% of those polled believe an Obama regime would be damaging, while 71% backed John McCain as best serving their business interests.

I can only assume this really stems from Obama's redistributive talk on tax. The policy is this: overall burden falls, but some rates rise to push it onto better off voters.

CFOs tending to be better off than most, you can can understand the poll results.

Still, nice to see a certain section of the US not being seduced by Obamamania, and remaining a little level headed. Someone's got to.

August 15, 2008 | Permalink | Comments (1)