Several of my blog colleagues are asking why IFRS8 is under fire.
Prem Sikka leads the charge in The Guardian with a subtle and well researched questioning about why country by country reporting is being resisted. He quotes Microsoft figures:
Microsoft has relatively few employees in Ireland, but over $16bn of assets and $9bn of profits. How can that be?
Prem of course already knows the answer, as do many others. I’ve spoken extensively with Irish bloggers on this topic and while on the one hand they praise Microsoft for bringing employment to the Emerald Isle, they also know that in doing so in the way Microsoft has, they’re fueling house price inflation that benefits very few and which holds long term dangers. But what I find particularly illuminating is a comment to Prem’s piece by MaiLing who says:
I work for one of the Big Four firms and recently qualified as a chartered accountant. During my studies we were told just to learn accounting standards and ask no questions about standard setters or even their logic. We all know that accounting standards only do what big companies want. My firm always lobbies for standards that our clients want. Prem Sikka is right that “Accountancy rules affect public welfare and they should be made by a democratic organisation that is independent of big business and accounting firms”. The problem is that big companies will never allow that unless articles like this shape public opinion.
So now we know. the Big 4 are complicit to the point of ensuring their trainees are kept in the dark about the realities of the policies they pursue.
Richard Murphy weighs in – as you’d expect in comments where he says:
Risk is geographic. More than that though a company gets its licence to operate in any territory from the government that represents those people: it has a corporate duty to account in return. This is the essence of stewardship and accountability: concepts forgotten (deliberately) in IFRS.
It is interesting is to see Alex Hawkes of AccountancyAge aligning himself to Prem’s position. Journalists are supposed to be neutral and while Alex’s blog represents his opinion, it is fascinating to see a representative from the UK’s most important accounting journal taking such a strong position.
People like Prem, Richard and to a lesser extent myself are pilloried as representing the fringe of thinking. Or worse still, written off as representing outdated, lunatic or plain wrong business thought. You know what? I could care less. You don’t have to like what I/we say but at least have the decency to realise that ‘we’ represent an oft silent majority who don’t always have access to state their thoughts and so don’t get heard. Silence is not golden. It’s a set of shackles.
When you trawl through the thinking of the Big 4 and big business, then triangulate that to stuff coming out of government, you might get the feeling that business is a gnat’s whisker from running the country as a whole. The outrage at IFRS8 is just an example of how people of conscience view this trend.
Technorati Tags: ethics, Microsoft, tax avoidance, tax justice, tax research
