Categories
Web

Study shows how hard it is to cancel accounts

Tom Spring of PC World conducted an unscientific study into how difficult it is to cancel subscription services purchased over the internet, and the results are in. It’s not easily done.

To evaluate how difficult canceling an online service can be, I signed up for and then canceled 32 accounts, each at a different site. About a third of the services in my sample made the seemingly simple goal of canceling very hard to achieve.

I’ve always been wary of free trials and the like, because I had a sneaking suspicion that it wouldn’t be as easy to get out as they made it out to be. This study just confirms those suspicions.

Why do companies do this to their customers? How much damage are they doing to their brand with these shenanigans? Is it worth keeping someone on against their wishes?

Categories
Auditing

MADD situation shows charities have many stakeholders

Recently, the findings from an investigation by the Toronto Star into charities have been released in the paper and they are not good for many charities, primarily MADD (Mothers Against Drunk Driving) Canada.

The Star found that the charity spends only about 19 cents for every donor dollar on programs designed to help victims of drunk driving and educate the public. This contradicts the information provided to potential donors, which claims MADD spends nearly 84 cents of every dollar on those programs.

Not surprisingly, there has been a substantial uproar amongst donors in light of these revelations, and the situation illustrates clearly just how many stakeholders there are for non-profit, charitable organizations like MADD.

Public companies have many users of their financial statements – both current (finite in number) and potential (pretty much infinite) investors and creditors. They are subject to intense scrutiny and pressure to meet earnings expectations. High profile charities are subject to the same pressures, but naturally with a focus on charitable works performed, rather than net income.

This is relevant to me because next week I’m going to be planning and conducting an audit of a new charity client of ours, and it ratchets up the pressure on my ability to plan a thorough yet efficient set of procedures to gain adequate assurance on the financial statement areas.

It’s exciting at the same time though to be involved in some way with an organization that is doing good in the world.

Categories
Auditing

Shell and reporting sustainability

This piece in the Globe and Mail was interesting:

Shell was early with “sustainability reporting” (their first annual sustainability report was published in 1998). They currently have a goal to have their (self-reported) greenhouse gas emissions 5 per cent below 1990 levels by 2010, similar to the Kyoto Protocols.

The story was about Shell’s CEO lauding the Kyoto Protocol and expressing his wish that there was a strong worldwide framework within which the oil industry could work with governments to control carbon emissions. But I’m interested in the standards:

The company is using the Global Reporting Initiative guidelines, the best known international standard for reporting on GHG emissions. So Shell is also more transparent than some. Shell claims to have invested $1-billion (U.S.) in renewables since 2000, notably in a major offshore wind project in the North Sea.

Is anyone auditing this report? Or Shell’s claim of investing $1B USD in renewable energy? I took a look at 2005’s Sustainability Report and found no auditor’s report. There is an impressive External Review Committee, with representatives from Transparency International and the Danish Institute for Human Rights. They describe their procedures and identify three guiding principles: materiality, completeness, and responsiveness to stakeholders.

Sounds like a great opportunity for an audit of both non-financial and financial information.

Categories
Accounting Blogs

‘Tis the season for giving links

Dan Meyers of Tick Marks is caught up in the spirit of giving in his own way – he’s revisiting his special 12 Blogs of Christmas from last year around this time and giving us all a refresher on the more memorable posts from the accounting blogosphere from the year nearly ended.

Since my blog wasn’t around this time last year I wasn’t featured, so I’m going to help Dan out and highlight what I think are the best posts I’ve made in the 10 months or so I’ve been blogging about the accounting and audit professional industry:

  • Income trust tax loophole gaining popularity
    One of my most popular posts in terms of number of comments, I discussed the tax law and theory surrounding income trusts in Canada, which quickly became one of the most controversial aspects of the still relatively new Conservative government here.
  • Terrorist accounting
    I’m still pretty proud of this little nugget, even though as I was writing it I was a little worried it might offend more than it entertained. It’s a flight of fancy as I try to get inside the head of a terrorist organization’s bean counter. It was timely and creative, if nothing else!
  • UFE results dreams begin
    Surprisingly my most visited post, possibly due to its primo position in Google’s search results, it was short but sweet and captured the growing anxiety I was feeling as UFE results day approached. I think most people who click on the link in Google are hoping for a wilder dream than the one I described!
  • Global ethics and international accounting standards
    Probably my most ardent foray into accounting related activism, the post details the struggle the Publish What You Pay campaign has had in lobbying for an international standard mandating companies in certain industries report payments they make to governments, in an effort to put an end to the injustice of corruption in the third world.
  • The CA Advantage – marketing the profession
    The profession debuted a new ad campaign highlighting the skills a CA can bring to an organization, and I compared it to the successful marketing of a rival designation here in Canada, the Certified Management Accountants.
Categories
Accounting Standards

Global ethics and international accounting standards

The Publish What You Pay campaign is where international politics, financial reporting, and the developing world intersect. The campaign seeks to force companies in extractive industries (such as oil and gas) to make public their payments to governments in the developing world.

It began in 1999 with an “exposé of the apparent complicity of the oil and banking industries in the plundering of state assets during Angola ‘s 40-year civil war. It became clear that the refusal to release financial information by major multinational oil companies aided and abetted the mismanagement and embezzlement of oil revenues by the elite in the country.”

The campaign is supported by numerous charities and political organizations such as Oxfam Great Britain and Human Rights Watch. They lobby bodies like the World Bank and IMF, as well the IASB, the International Accounting Standards Board.

Publish What You Pay calls for an International Financial Reporting Standard for the extractive industries to include a requirement that extractive industry companies disclose in their accounts all payments that they make to the governments of countries in which they extract resources, and to agencies or representatives of those governments.

Sounds like a good idea to me. It’s actually surprising to me as a young idealist that this isn’t already part of international standards. But the most recent letter sent from PWYP to the IASB on the matter expresses the campaign’s consternation with the IASB’s actions to date, and I have to agree.

The IASB’s proposed standard leaves segmentation up to management’s discretion, rather than mandating country-by-country grouping. The standard is barely even that – it basically just codifies laissez-faire.

I’m dismayed to say the least by the lack of support this has received from the Board thus far. In a few years I will be working primarily with IFRS as Canadian GAAP converges. I’d like to see a greater sense of urgency on their part in matters of this importance.

The PWYP letter smartly points out “companies already need to generate [country-by-country segmenting] in order to complete tax returns in each country of operation, this should not prove an additional burden.” They also use the lingo: “The citizens of [poor yet resource-rich] countries are important, if non-traditional, users of financial information.”

This is one of those areas where the IASB could showcase those pervasive qualities in public accountancy like ethical conduct and protecting the public interest.