Financial Management (UK) articles from June 2002

Financial Management (UK) archives from June 2002

Editor's letter.
June 1, 2002... Protesters gathered outside a recent convention held by the Institute of Directors to call for justice. Their target was Henry Kissinger, one of the speakers, but many of their placards attacked a larger foe: globalisation. Soon afterwards,...

Preparatory course for IASs. (Technical Update).
June 1, 2002... The International Accounting Standards Committee Foundation (IASCF) is launching a programme to help accountants prepare financial statements under international accounting standards in the run-up to the 2005 implementation deadline (see...

Call for EU standard co-ordinator. (Technical Update).
June 1, 2002... The Federation des Experts Comptables Europeens (FEE) has asked EU member states to review their arrangements for the enforcement of accounting standards. In a discussion paper urging the effective enforcement of accounting standards across...

IFAC publishes e-guidance. (Technical Update).
June 1, 2002... The International Federation of Accountants has issued a practice statement to help auditors identify and assess the risks of the increasing amount of trade done over the internet when completing financial statements. "Electronic...

Dual listing in the US `adds to credibility': but experts warn of all the baggage that goes with it. (Capital Markets).
June 1, 2002... European companies with a dual listing on the US stock exchange have a strategic advantage over their competitors, according to a leading specialist in capital markets transactions. Speaking last month at a Nasdaq-sponsored seminar on the...

CIMA's annual conference to focus on risk management. (News Round-Up).
June 1, 2002... CIMA's annual conference is the leading forum for the exchange of information on both current financial issues and the future of the profession. This year the theme is "Risk strategies--preparing for an uncertain future". In the wake of Enron...

Could you be a CIMA Award winner? (News Round-Up).
June 1, 2002... The CIMA/Financial Management Awards 2002 dinner will be held on Tuesday 12 November. There is no charge for entries and the deadline for submissions is 13 September. The award categories are as follows: * Business leader of the year....

UK firms to reform practices: companies are keen to avoid criticism from stakeholders. (Financial Reporting).
June 1, 2002... Almost half of all British businesses are planning to change their financial reporting methods in the light of the Enron debacle, according to a survey by enterprise software company Hyperion. Respondents cited increased official scrutiny...

Which type of chief financial officer are you? (Financial Reporting).
June 1, 2002... Chief financial officers are moving away from an internal scorekeeping role and are becoming change agents, Jeff Rodek, CEO of enterprise software company Hyperion, told delegates at the firm's annual conference last month. Rodek...

FDs admit to corporate myopia. (Technical Update).
June 1, 2002... British businesses are taking a short-sighted approach to cost-cutting, including investment freezes, recruitment bans and lay-offs, according to a study by PricewaterhouseCoopers. Two-thirds of the FDs it surveyed admitted that the costs they...

EC levels VAT playing field. (Technical Update).
June 1, 2002... The European Commission has adjusted VAT legislation to standardise the taxation of e-commerce and internet services provided by businesses in the European Union and their non-EU counterparts. At present, non-EU businesses do not have to charge...

An offer you can't turn down. (Technical Update).
June 1, 2002... UK businesses and consumers use 52 billion [pounds sterling] worth of energy a year, but even the smallest firm could cut 20 per cent off its energy bills, according to Action Energy. The body, part of the Energy Efficiency Best Practice...

Increasing audit thresholds, practice consolidation and growing competition in the high street means that accountancy firms are gaining most of their income from value-adding services such as business advice, rather than from the nitty-gritty of bookkeeping, according to research by Iris Software. (Technology Update).
June 1, 2002... Increasing audit thresholds, practice consolidation and growing competition in the high street means that accountancy firms are gaining most of their income from value-adding services such as business advice, rather than from the nitty-gritty...

Microsoft's acquisition of Navision is bad news for Navision customers, according to Graham Steinsberg, chief executive of software group Coda. (News Round-Up).
June 1, 2002... Microsoft's acquisition of Navision is bad news for Navision customers, according to Graham Steinsberg, chief executive of software group Coda. "They will be in for a long period of uncertainty," he told Financial Management. "At a tricky...

Unilever defends world-view: `globalisation is good,' insists the group's chairman. (Globalisation).
June 1, 2002... Global brands do not lead to an undifferentiated mass of world citizens without local cultures; they simply provide better value for the customer, according to Richard Greenhalgh, chairman of consumer goods giant Unilever UK. Speaking at...

How to reward people effectively. (News Round-Up).
June 1, 2002... Good intentions can easily backfire when it comes to rewarding staff for their performance. Rewards or incentives can anger and frustrate people as much as they can help to motivate and retain them. Here are half a dozen ways in which a...

Role call. (Letters).
June 1, 2002... I was interested in Merrill Cassell's letter on the article "The ascent of woman" (letters, May). He neglects to mention that men are needed to create children, which means that HR policies must let them exercise their responsibilities as...

Pollution solution? (Letters).
June 1, 2002... I am writing in response to the article concerning the changes in UK taxation for company car provision based on C[O.sub.2] emissions ("Any colour as long as it's green", April). While I understand the move to encourage more environmentally...

Best of British. (Letters).
June 1, 2002... My wife and I have just returned from a trip to China which included a visit to the British Council offices in Chongqing--a city in the south-west of the country with a population of 13 million, including 15 UK citizens. The reception area...

Qualifying heat. (Letters).
June 1, 2002... B Ghosh advocates creating more restrictive entry requirements to the CIMA qualification (letters, April). He argues in favour of a graduate-only profession in the hope that this will prevent future Enron-type scandals. Surely (knowing the...

Paying the penalties. (Letters).
June 1, 2002... The first time I saw Sheffield United was in a game against Manchester United on Boxing Day 1964. Despite their one-nil defeat, I decided they were the team for me. It has been a roller coaster ride ever since. The present team cannot he...

Trade secrets: the Enron crash has hit the headlines, but many other firms have been legally concealing the true state of their finances. Ted Stone advises wary investors to vote with their chequebooks. (City).
June 1, 2002... If you had told me a year ago that the earnings of a high-flyer would spark a major scandal, the odds are I would have picked a high-tech company such as Cisco Systems. Instead it's Enron. The company transformed itself from a provider of...

Recovery position: the bad news is that economic growth in the first quarter of 2002 has been disappointing. The good news, argues David Ross, is that this means interest rates need not rise much this year. (Economics).
June 1, 2002... Growth of only 0.1 per cent in the first quarter of 2002, after stagnation in the fourth quarter of last year, is disappointing--City economists had been forecasting growth of 0.4 per cent. In the first quarter the output of the production...

False economy: if most people now accept that shares do not reflect the true value of a company, why does FRS17 reinforce the idea that they do? David Allen explains why the world of pensions is in turmoil. (Management).
June 1, 2002... There could be no clearer symptom of the shift from a stable and predictable environment to a volatile and uncertain one, or of the interaction of the spheres of influence on business, than the current pension situation. To understand what is...

Turn on, log in, take off: the cost of business travel can be reduced significantly by booking on-line, but that's not the only benefit the web has to offer. Cathy Hayward explains what's making firms click and go. (Travel And Entertainment).
June 1, 2002... Most of us are quite happy logging on to the likes of lastminute.com to find a late deal in the sun or a cheap city break. But if we need to go places on business we dutifully fill out the forms and put them in the internal post to the travel...

Stolen time: employees have a duty not to act in a way that competes with their employers' best interests, but what happens when they resign to start up or join a competitor? (Legal).
June 1, 2002... Employees who start competing with their employer's business while still employed are in breach of the implied term of trust and confidence. However, the rights of an employer to take steps to protect its business are less clear if there is no...

Let it be: the sheer hassle involved in supervising the rental of her own property drove Jacqui Mitchell to start a management service aimed at buy-to-let investors like herself. (Enterpreneur).
June 1, 2002... Unreliable tenants, late rent, constant maintenance problems--anyone who has ever let out a property will know the pitfalls of being a landlord only too well. It was the experience of letting her house in Glasgow while living in London that...

Immaculate conceptions: Britain's Design Council has discovered that the companies it has recognised for creating highly innovative products and services have comprehensively outperformed the stock market. Andrew Summers explains why design has become a crucial factor in the struggle for competitive advantage. (Cover Feature Design).
June 1, 2002... Now be honest. What comes to mind when you think of design? The latest office redecoration? Your business card? Perhaps it's the artwork on the last book or CD you bought. Or the last room you saw Laurence Llewelyn-Bowen changing. Well,...

Artificial intelligence: you can never be 100 per cent sure that your decision whether or not to pursue an investment opportunity will turn out to be right, but you can significantly improve your chances of success by using a model. John Tennent explains how to build a robust, spreadsheet-based simulation. (Finance Investment).
June 1, 2002... The effects of increasing competition, globalisation and economic turbulence make it ever harder for businesses to decide between the multitude of strategic and operational choices that face them. All business decisions, from the purchase of a...

Slim pickings: devotees of lean manufacturing equate its practices with the elimination of cost, but this belief is misguided and it can distract managers from seeing where process improvements really need to be made. John Darlington offers a series of real-life examples to illustrate the dilemma and explains where management accountants should fit into the lean equation. (Finance Management Accounting).
June 1, 2002... Lean manufacturing insists on viewing the benefits associated with its implementation in terms of cost reduction. The removal of "waste" is seen as synonymous with the removal of cost, but this is wrong and it leads to clashes between...

Justifying the means: if you're using the capital asset pricing model to assess an investment project and still applying your company's equity beta coefficient to a `standard' overall market equity risk premium of 7 to 8 per cent, this premium is likely to be too high to give you an accurate evaluation. (Finance Markets).
June 1, 2002... The equity risk premium is the extra rate of return that needs to be earned on shares over and above the rate on a safe investment such as a Treasury bill or a government stock. This benchmark premium for all companies, before it is adjusted...

Ship shape: a recent survey has revealed significant cultural changes in the Royal Navy. Philip Woodley explains why the implementation of the balanced scorecard must take much of the credit. (Business Balanced).
June 1, 2002... In 1997-98 the Royal Navy started to implement the balanced scorecard. It was rolled out separately in four areas, starting with the corporate headquarters, which is known as the Chief of Naval Staff (CNS). The project reorganised a large...

Foresight saga: is financial forecasting more of an art than a science? Adam Bailey argues that judging the quality of a forecast by merely comparing the predicted figures against the outcome is a fundamentally misguided approach. (How To Forecasting).
June 1, 2002... A financial forecast is an essential item of management information in any business and many people may contribute to its preparation, although it is normally the management accountant who co-ordinates the process--and bears the most...

Council membership: casual vacancies. (Institute News).
June 1, 2002... Area 4 Notice is given that John Perry, the council member in electoral area 4 (West Midlands), is retiring early and a new candidate is sought to represent area 4 on council. The casual vacancy will commence from Monday 1 July 2002 until...

Applications for membership. (Institute News).
June 1, 2002... If you are a passed finalist who completed the CIMA exams in May or November 1997 and has not yet applied for membership, time is running out. Passed finalists have five years in which to apply for membership. For those who completed in 1997,...

Institute diary.
June 1, 2002... CENTRAL LONDON AND NORTH THAMES 11 June Mentoring and coaching (Biz.Net event) Speaker: John Niland, Success 121 Time: 7.15 for 8pm (buffet on arrival) Venue: Watford Moat House, Watford Cost: 15 [pounds sterling] (inc...

Gulf Aluminium Rolling Mill Company (Garmco). (On the move).
June 1, 2002... Tony Keenan FCMA has been appointed resident director of the Gulf Aluminium Rolling Mill Company (Garmco) in Bahrain. In his new role Keenan will be responsible for the company's finance, administration, marketing and investments in China,...

Ferrari Owner's Club. (On the move).
June 1, 2002... John Warner FCMA, registered member in practice at Colworth Management, has been appointed finance director of Ferrari Owner's Club. The appointment adds to Warner's portfolio of directorships of small companies. Previous directorships include...

Ericsson Sri Lanka. (On the move).
June 1, 2002... Ruwan Silva ACMA (above) has been appointed chief financial officer of Ericsson Sri Lanka, where he will be responsible for the finance function, group reporting and the IT, MIS and HR functions. Silva was previously financial controller for...

BV Group. (On the move).
June 1, 2002... James Croser FCMA (above) has been appointed finance director of marketing communications company BV Group. Croser was previously finance director at Lexis-Nexis Europe, where he was instrumental in consolidating the company's European...

Zambia Institute of Chartered Accountants (ZICA). (On the move).
June 1, 2002... Christopher Siakakole ACMA has been appointed technical manager for the Zambia Institute of Chartered Accountants (ZICA). Reporting to ZICA's chief executive, Siakakole's responsibilities will include adoption of accounting and auditing...

Manchester Business School. (On the move).
June 1, 2002... Pauline Harmstone ACMA has been awarded an MBA with merit from Manchester Business School. Harmstone is finance director of a textiles company in Blackburn, Lancashire.

Experian International. (On the move).
June 1, 2002... Ian McGregor ACMA has been appointed finance director of Experian International. McGregor joins Experian from Worldcom International, where he was vice-president, finance, EMEA. In his roles with Worldcom and its internet divison, UUNet, he...

Federal Mogul Aftermarket Europe. (On the move).
June 1, 2002... Mike Broadhead FCMA has taken on European responsibilities for finance at Federal Mogul Aftermarket Europe. As finance director UK, Broadhead will now also provide support for Central Marketing.

DAS Legal Expenses Insurance. (On the move).
June 1, 2002... Patrick Veysey ACMA (above) has been appointed finance director of DAS Legal Expenses Insurance. Veysey was previously assistant general manager and replaces former managing director Tony Holdsworth on the board.

Tallyman International. (On the move).
June 1, 2002... Tallyman International has appointed Jon Hickman as account director. Hickman will be responsible for developing new business in the UK and Europe. Before joining the company, he was business development manager at Target.

Diary of events.
June 1, 2002... Networks Telecom Europe 2002 25-27 June, Birmingham For more information or to register, tel: 020 8987 7600, or visit: www.networkstelecom.cam Maximising the value of your paybill 27 June, London Tel: 020 7347 3500, or e-mail:...

Roll reversal: the payroll function has come a long, long way over the past decade. Cathy Hayward explains how specialists in the field have evolved from number-crunching administrators to sought-after strategists. (Payroll Management).
June 1, 2002... Ten years ago the payroll manager would sit alone in his office keying employee data into the system and preparing for the monthly grind of processing the payroll. His only contact with the rest of the organisation would occur when he handed...

Whose baby? Should the payroll function be finance's ultimate responsibility or personnel's? There are good arguments to support both viewpoints, writes Ruth Prickett, but it really shouldn't matter as long as the two departments can work together to ensure an error-free operation. (Payroll Personnel Or Finance?).
June 1, 2002... Payroll is where the distinction between finance and personnel blurs, so it is hardly surprising that there is an ongoing debate about which department should manage it. From finance's point of view, payroll is one of the most important areas...

Slipping out: on the face of it, outsourcing the payroll function makes a lot of sense, because it allows companies to focus on their core activities safe in the knowledge that expert providers are on the case. But can an employer ever truly abdicate its responsibility for paying staff properly? (Payroll Outsourcing).
June 1, 2002... The sight of the finance director wandering into the payroll department to make some last-minute P60 adjustments is becoming increasingly rare, now that more and more organisations are outsourcing at least part of the function. Payroll may...

Pay and display: the one thing that employees read every month is their payslip. Louisa Roberts explains how companies and advertisers are finding new ways to take advantage of this on paper and on-line. (Payroll Payslip Advertising).
June 1, 2002... What is the one piece of information that you can guarantee your employees will study carefully each month? Internal e-mails and the intranet? Notices on the walls of the staff canteen? Perhaps, but most people are overloaded with information...