KPMG is humor challenged
February 29, 2008
My good friend Krupo regaled me with the latest twist in the KPMG Canadian overtime law suit. You can’t make this up:
If you were an administrative staff person supposed to work 40 hours a week, no more, no less, the letter will indicate some dollar figure, your share of the almost $10 million settlement.
Intriguingly, you’ll get that letter even if you weren’t an administrative person - that is, a young CA student or similar ‘overtime exempt’ professional employee.
And what will the letter will tell you?
It will say that your share of the settlement is zero dollars.
Wow.
Thanks for your service, this doesn’t apply to you, have a nice day.
Canadian labour laws prohibit the paying of overtime to ‘overtime exempt’ professionals - which includes audit staff. Yet from what Krupo tells me, it’s a standing joke that the investment banking community laughs at the 70-90 hours per week that accounting professionals regularly pull to satisfy their bosses.
In theory, Canada could easily be used as a professional sweat shop for routine work coming in from overseas. I doubt even KPMG has thought of that wheeze so I’d best stop before they get ideas.
Google Sites - a ball dropped
February 28, 2008
I spent a good amount of time playing about with Google Sites last night. I’m not over enamoured. In fact I’m decidedly underwhelmed. Usability in parts of the application is dreadful. I had hoped that in releasing this service, Google would validate the wiki market for the SMB. To the extent it is out there, the answer is yes, but with issues like this, credibility gets badly dented very quickly.
And contrary to what some people think:
Google’s Management Director of Enterprise Matthew Glotzbach called the combined products under Google Apps a “Microsoft Sharepoint killer” because it’s allowing businesses to collaborate without all that expensive Microsoft software.
- in its current shape it is not a Sharepoint killer. People will always pay for something that works. Free is optional.
My del.icio.us bookmarks for February 26th through February 28th
February 28, 2008
These are my del.icio.us bookmarks for February 26th through February 28th:
- Critics skewer SEC plan to formalize use of professional judgment - Financial Week - “a lot of people don’t have common sense." This is alarmist tripe. Of course there's plenty of experience available on this one.
- 17th XBRL International Conference & Expo to Be Held in Eindhoven, Netherlands (near Amsterdam, Brussels, Dusseldorf) on May 5-8, 2008 - An interesting event that might well be worth visiting
- Comment is free: Bringing banks to book - Prem goes after the financial institutions
- Toyota… do I look stupid??? - There is an expression for this kind of customer behaviour: dumb…. you work it out.
- The 2 % Business Turn-Off - It's a simplistic response but understandable. PayPal takes a sizable chunks of money - especially on international transfers
As Tesco squirms, the knives are out
February 28, 2008
If you knew your favourite supermarket had organized itself to ensure it avoids £1 billion in taxes, would you still shop there? If that money was used to lower prices pound for pound, the answer might conceivably be yes because on balance the common good would have been served. Not at Tesco.
According to Tesco’s executive director, corporate and legal affairs, Lucy Neville-Rolfe, quoted in the Guardian:
“While every company seeks to operate as tax-efficiently as possible, to do so is our duty to shareholders and customers alike - Tesco pays a great deal of tax.
“Tesco is one of the UK’s largest taxpayers. For the year to February 2007 we paid over £1bn in the UK in corporation tax, business rates, employer’s national insurance contributions and other taxes. Combined with the approximately £750m of PAYE tax, employee’s NIC and net VAT that we collected in that financial year, this means we are in the top 10 taxpayers in the UK.” She added that this was “a marked contrast to the significant number of FTSE-100 listed companies that pay little or no corporation tax at all”.
I want to be 100% clear so there is no misunderstanding about what I mean - this statement is misleading hogwash designed to blind people to the reality of what Tesco pays and what it means.
Tesco acts as tax collector on behalf of its employees PAYE. The £750 million it refers to is their tax not Tesco’s. Tesco paid £545 million in corporation tax in 2006-7 according to its press release. The timing differences it refers to which account for the difference between tax paid and accrued amounts to £535 million in deferred tax liabilities - a figure that is growing compared to the previous year.
Richard Murphy points out the inconsistencies between Tesco’s carefully worded PR statements, its CSR policy and the Companies Act 2006:
Tescos is using abusive structures to increase profits at the expense of the UK taxpayer who form the vast majority of their customers to enhance the well being of the senior management first of all and the wealthiest in society who own their shares second (pensioners included by the way: almost all with private pensions are by definition in that wealthiest grouping) at cost to the rest of society at large.
He is right. There can be no justification in its actions, which almost mirror the kind of words I’ve seen time and again from the likes of PWC, KPMG and others. Given the scale of Tesco’s profit shifting and the fact this is part of an already publicly acknowledged larger scheme (see statements in their financial press release,) I am surprised that the company appears relaxed about its position. It is however interesting to note the company refuses to divulge details of the ‘complex structures’ in use to effect the transactions which are triggering the avoidance.
