A Happy New Year of fairly presented accounts is wished for all our readers, although those who have presented or audited accounts without that quality might have to struggle hard to obtain such happiness since, as always, we advocate action which makes it clear that such action is not on. Dark clouds are looming on the economic horizon, many say, but the need not to cheat as happened in the last economic upheaval, is yet to be properly learned. We need to get on with it.
We hope you have had the opportunity to see a production of our stage play, Accounting Supremos, or at least had the opportunity to read it in our previous Edition. It is of course to mark the election of Mr John Hagen as a life member of the ICANZ (correction: NZICA) following his defending in the High Court of the despicable 1996 Ernst and Young report to the shareholders of Tui Milk Products Ltd.
Mr Muriwai's speech appeared to draw heavily on the Institute's May 2003 publication called Improving Corporate Transparency: A Shared Responsibility. This report was scheduled to have been released in 2002 when Mr Ralph Marshall was the Institute's president. Mr Marshall had floated the idea that the New Zealand accounting scene in the mid 1980s had been described as the wild west. But the idea seemed to dry up when it was pointed out that it was not too late to take action against such westerners. The document was completed when Mr Pat Waite, a Bank of New Zealand executive in 1990, was Institute president and it has some erroneous footnote references, due presumably to last minute changes.
Mr Muriwai said that the term "wild west" in respect of NZ accounting had been "bandied about" by commentators from time to time.
A theme was that nothing like Enron happened here although it is likely that something like it is likely to happen sometime in the future. In the Institute's vehicle of time apparently one can seem to see corruption away up ahead, but it proves to be a mirage as it nears, before anyone can be identified with it. And in the rear, possibly because of special high tech mirrors, nothing of that nature can be found at all.
In the mid 90s the Institute of Chartered Accountants of NZ was formed. The old NZ Society of Accountants carried on for a year or so to deal with happening before the time of the Institute. Then it was announced that the Society was closing down and that any complaint about Society members in that earlier time would have to be receives before a certain cut off date or there would be no redress. It is submitted that nothing could be more classic wild west than that. Imagine if a Ministry of Police was to take over from the Police department and all crime occurring in the department's time would cease to be investigated a year later.
Now we have this most peculiar changing around of the words in the Institutes name, ostensibly for branding reasons. Perhaps another curtailment of disciplinary provisions is wanted or it fears that it was left off some international forum because someone looked it up under N for New Zealand and could not find it. International recognition seems to be its life blood.
Which brings us on to the latest pronouncement concerning the Institute's adoption of the auditing standards and other miscellaneous standards of the International Federation of Accountants (IFAC). The IFAC does at least have a resemblance of democracy about it and possibly globalisation of standards has to be accepted. The question is why are the basic accounting standards of the IFAC not being adopted as well? Auditing standards are all about effectively enforcing accounting standards one would have thought. The two need to be made for each other like hand and glove. The country's accounting standards appear to vest with the privately owned International Accounting Standards Board. The only answer we can come up with is that Elizabeth Hickey has been given a lifetime mortgage over NZs accounting standards as thanks for her twice breaching those standards on Yield To Maturity application in 1990. It had become rather difficult for her to stay in control from inside the country so a scheme had to be hatched for her to do it externally. The latest pronouncement with respect to auditing mentioned the IASB once only.