Financial Director articles from September 2005

Financial Director archives from September 2005

Editor's letter - Truth and fairness.(principle based accounting standards)(Editorial)
September 30, 2005... Byline: Andrew Sawers, editor, editor@FinancialDirector.co.uk. It's been said many times that the difference between US and UK accounting standards is that the US standards are rule-based and the UK standards are principles-based. The old...

On the move - Scott's brilliant career ends in tragedy.(Tim Scott, Imperial Chemical Industries PLC)(Obituary)
September 30, 2005... Byline: Rachael Singh. Vehicle group Ford Retail Europe has promoted UK finance director Nigel Parker to European finance director. Parker, the former finance director of Daewoo Cars, joined Ford Retail Europe in 2004 to integrate the...

Hire and fire.(European employment legislation )
September 30, 2005... Byline: Anthony Harrington. European employment legislation is preventing companies from restructuring quickly enough to respond to changes in their markets. Europe is heading for third-world status according to a report commissioned...

Insight - Hold the stock.
September 30, 2005... Byline: Richard Willsher. Consolidation among the major stock markets is accelerating rapidly. But what does this mean for London and for businesses considering a listing? For the moment, attempts to take over the London Stock Exchange...

Insight - Yuan weak link.(China, currency revaluation)
September 30, 2005... Byline: Peter Bartram. Should FDs whose companies have business with China be worrying about the revaluation of the currency? On the face of it, the 2% revaluation of the Chinese renminbi (RMB), also known as the yuan, won't make much...

Insight - Jekyll or Hyde?
September 30, 2005... Byline: John Sterlicchi in Tampa Bay. After William Donaldson's disconcerting two-year chairmanship of the Securities and Exchange Commission, no one is sure which way new chairman Christopher Cox will lean. The question is which Cox...

Accounting - Auditing the auditors. Quiet words in ears nothwithstanding, the Audit Inspection Unit has made clear it is not going to stand for shoddy practices.
September 30, 2005... Byline: Peter Williams. Audit is all about judgement. And deciding whether an audit has been good enough is all about judgement too. Until now there has been no mechanism to find out what sort of job auditors are doing. The only system -...

More of the same.(accounting standards )(Brief Article)
September 30, 2005... The "true and fair view" will remain a cornerstone of financial reporting in this country, according to the Financial Reporting Council. Following an analysis of the impact the new accounting standards would have, the FRC outlined its...

Corporate governance - Striking postures. For directors to be truly independent, they need to move beyond an awkward squad mentality if they want to benefit their businesses.
September 30, 2005... Byline: Robert Bruce. Independence, corporate governance specialists often say, is a state of mind. A better definition would be very useful. Increasingly, independent directors on a corporate board assume that adopting an awkward stance...

Combined code call.
September 30, 2005... The Financial Reporting Council has issued a call for evidence as part of its review of progress in implementing the 2003 version of the combined code of corporate governance. The FRC has invited views from listed companies and directors on...

Sarbox's lost fees.
September 30, 2005... Research by mid-tier accounting firm BDO Stoy Hayward claims that Sarbanes-Oxley has cost the UK's Big Four audit firms [pounds sterling]318m over the last two years in lost consultancy fees. Governance rules that prohibit auditors from...

IT strategy - The sick man of IT. For an eye-wateringly painful example of everything to avoid in an IT project, the mammoth NHS programme takes some beating.(National Health Service, United Kingdom)
September 30, 2005... Byline: David Rae. Profiting from the mistakes of others is one of life's great lessons, so businesses involved in or planning a major IT project should certainly study the goings-on at the National Health Service right now. In 1998...

XBRL extended.(Securities and Exchange Commission)(Brief Article)
September 30, 2005... The Securities and Exchange Commission has extended its voluntary programme for accepting filings under the controversial XBRL format. The expansion to the scheme, which began in April and is an attempt to make it easier for investors to use...

Double bubble.
September 30, 2005... Using a single ERP system for finance while implementing consistent data and technology standards can cut the cost of finance operations by as much as 23%, according to Hackett Group research. But the group warns that companies that take up...

Dial-up dying out.(Broadband internet access)(Brief Article)
September 30, 2005... Broadband internet access overtook dial-up for the first time ever in May this year, according to the Office for National Statistics. Broadband accounted for 50.7% of all connections, up from 49.2% in April. In January 2001, when the index...

Economics - The first cut is the simplest. Lopping 0.25% off the base rate will not be enough to stimulate the investment and export growth that the UK economy needs.
September 30, 2005... Byline: Dennis Turner. It all seemed so predictable and justified. Predictable because the voting at the Bank of England's Monetary Policy Committee (MPC) had moved steadily in favour of a cut, from 8-1 (in favour of no change) in April to...

High street gloom grows.(Brief Article)
September 30, 2005... The retail sector saw confidence plummet in the second quarter, according to recently published research from the ICAEW and Orange. The study recorded a negative score among finance professionals across the UK economy for the first time since...

Oil pumps up inflation.
September 30, 2005... Further rises in the price of crude oil led to Consumer Prices Index (CPI) inflation rising to 2.3% in July, the highest rate since the start of the official series in 1997. The largest contributor to the trend came from transport, with price...

The Financial Director interview - Acquired taste. SAB Miller has sent one foreign brewery after another down the hatch. CFO Malcolm Wyman explains why the company won't get a hangover.
September 30, 2005... Byline: Andrew Sawers. The last time Malcolm Wyman bought the beers, the round cost him $7.8bn. The time before that, EUR162m. And in 2002, "Miller Time" set him back $5.6bn. As chief financial officer of the FTSE-100 group formerly...

Cover story - Almost perfect. The six sigma concept can be used to cut defect rates to near-zero in businesses as diverse as Scottish Power and Nasa. But getting the right mindset is more important than a slavish adherence to the laws of statistics.(Cover story)
September 30, 2005... Byline: David Rae. "The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before...

Forecasting - Sound the alarm. As the economy starts to teeter, what businesses need are forecasting systems that can give a clear warning of impending reversals.
September 30, 2005... Byline: Malcolm Wheatley. Most companies didn't need August's interest rate reduction to tell them that times are tough. The mood on Britain's high streets is the worst for a decade, with like-for-like sales 1.9% lower than in July 2004 -...

Hedge funds - Heads on a plate. In their determination to extract shareholder value, hedge funds have unleashed bloodbaths in the boardroom. Are they the unacceptable face of shareholder activism?
September 30, 2005... Byline: Richard Willsher. Fear and loathing have accompanied the rise of the hedge fund to corporate prominence. Rolf Breuer, who felt the clout of the hedge fund when he was ousted as chairman of Deutsche Borse, didn't mince his words...

Briefing - Listings rules - My travel pays for breach of rules.
September 30, 2005... Byline: Andrew Sawers. The Financial Services Authority has fined MyTravel Group plc [pounds sterling]240,000 for breaching the listing rules in 2002 by failing to make a prompt announcement on the company's financial position. ...

Vat and Tax - Debenhams' victory in VAT avoidance case overturned by appeal court.(department stores, value-added tax)
September 30, 2005... Byline: Sarah Perrin. High street retailers operating VAT avoidance schemes suffered a blow recently when the Court of Appeal overturned a High Court decision and ruled in favour of HM Revenue & Customs. The case, Debenhams Retail plc...

Vat and Tax - EU Loss relief tilts M&S way.
September 30, 2005... Byline: Sarah Perrin. This autumn the European Court of Justice will rule on a high-profile group loss relief case involving Marks & Spencer. If the court follows the opinion of the European Court's advocate general, the UK will almost...

Knowledge management - Corporates look for ways to tame the data monster.
September 30, 2005... Byline: Robert Jaques. Problems associated with information overload are reaching acute proportions for large enterprises, newly published research from the Economist Intelligence Unit (EIU) has warned. According to the report, the...

Financial directions - Foreign investors go on UK shopping spree. For the first time ever, the number of British companies ending up in the hands of foreign investors has exceeded the number of foreign enterprises taken over by British businesses, writes David Rae.
September 30, 2005... Even though the net investment import figure recorded for Q2 2005 is likely to be a one-off, it offers "strong evidence of more money being spent in the UK", according to David Brooks, head of mergers and acquisitions at Grant Thornton...

Financial directions - Britain narrows gap with US on closing time.
September 30, 2005... UK companies are closing the gap on US businesses in the time it takes to declare their financial results to the market. Research by IBM Business Consulting Services reveals that British businesses have continued to improve their close...

Financial directions - Financial services braces itself for transfer pricing challenges.(Transfer pricing affects financial services)(Bureaucracy a threat to business)(economic performance of United Kingdom, United States of America)
September 30, 2005... Tax challenge expected Transfer pricing is one of the biggest challenges for financial services companies, according to an Ernst & Young survey. Eight out of 10 of the 108 financial institutions across the world surveyed believe there...

Financial directions - Financial bites.
September 30, 2005... "I ask for leniency so I can go back to my family as soon as possible. My parents are here. My behaviour wasn't indicative of the son they raised." Former CFO of WorldCom Scott Sullivan pleads to a packed US courtroom before being...

Financial directions - Oil price fuels inflation and spending fears.
September 30, 2005... Terrorism and confidence concerns seem likely to contribute to a further slowing in consumer expenditure, with a knock-on impact on the housing market. But inflation pressures, largely caused by surging oil prices, present a worry, with, as...

Extraordinary items - Snow joke for posties.
September 30, 2005... Enjoying the August weather? Watching the cricket? Good. Just the sort of frame of mind you should be in. Unless you work for the Royal Mail, that is. A press release landed on our desk on a particularly warm morning, headlined "Royal Mail's...

Extraordinary items - Put a stamp on it, sir.
September 30, 2005... Still on the subject of the Royal Mail, a colleague sends us a delightful email. He was, for some reason, trying to find the email address for the Royal Mail's address management centre, so it seemed eminently sensible to try sending an...

Extraordinary items - Trivial pleasures.
September 30, 2005... Always suckers for another miscellany book, our favourite title this month comes from The Economist, which has added to the genre with its Business Miscellany. It makes a great Christmas present! Our favourite factoids: - Total number...

Extraordinary items - Technically speaking ...
September 30, 2005... From the businessballs.com website, an amusing little tale: A mechanical engineer, a systems engineer and a software engineer are in a car driving down a steep mountain road when the brakes fail. The driver desperately tries to control the...

Extraordinary items - Shush fund.
September 30, 2005... We've all had the so-called Nigerian 419 email scams, but this one is a classic. Supposedly from one Cynthia Wood, who claims to be the FD of Lloyds Bank, it offers the chance to split "$20,000,000 million dollars" - or around 10 times the...

Decisions - Talent management - Star of the show. Talent spotting and coaching your team for greater things will raise your profile and influence in the business and win respect for the finance department.
September 30, 2005... As if finance directors didn't have enough to worry about, talent management has emerged as another key issue the FD needs to address. But why is talent management so important for FDs? "There are two key reasons," says Simon Brittain, who...

Decisions - Special projects - I get by with a little help. A special project can be the straw that breaks the finance department's back. Temps, contractors and interim managers can all help you deliver the goods without crucifying your permanent staff.
September 30, 2005... Extra burdens on the finance team are nothing new. Adopting international financial reporting standards (IFRS) and complying with the Sarbanes-Oxley legislation are merely the most recent. But for many companies, the only way to get the extra...

Decisions - Professional development - Best in class. Clearing the first hurdle of professional qualification is only the start of a lifelong learning programme for finance staff. The most able need to master emotional intelligence as well as technical skills.
September 30, 2005... Thinking about which qualification to use for training junior finance staff is not something FDs spend much time on. Many who came up through a finance route may prefer to train their junior accountants in the same qualification. Alternatively,...

Decisions - Succession planning - Who's next? There's little sense in leaving the finance department in the lurch when you eventually move on. Grooming a successor is good for your company, your team and even you.
September 30, 2005... Finance directors overlook succession planning at their peril. "The key point to understand is that no one will let you move until you have got someone who can step into your shoes," says Marjorie Knight, a business psychologist at Kaisen...

Decisions - Recruitment - Perfect people. Recruiting the right team isn't just about identifying the skills required for each role, but also weighing up applicants' cultural fit and inner motivation.
September 30, 2005... Selecting people just like yourself is the biggest and probably easiest error you can make in recruitment. Phil Sheridan, UK district director at Robert Half International, gives the example of the finance director who goes to Cambridge, trains...