Letters: Fantasy accounting

Financial crisis exposes today's fantasy accounting
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I qualified as an accountant over thirty years ago and for most of that time I have been proud of my profession. These days, however, I am ashamed. It gives me no pleasure to admit that David Williams (letter, 16 March) it quite right when he says that "I have seen that accountants have falsely signed off previous years as 'true and fair'. " Unfortunately, his solution – "not to invest any more in City of London-based investments" – would imply that the problem was in the UK, whereas it is worldwide.

Accounts these days have to be produced using International Financial Reporting Standards, and it is these very standards that have created fantasy accounting. Safeguards such as the prudence concept and the matching concept have been swept away and historical cost accounting that recorded actual transactions (and could therefore be audited) has been replaced by "fair value" accounting, where you can make it up as you go along.

Published accounts are five times thicker than they were five years ago, but most of what is printed now is either irrelevant or inaccurate. The corporate governance statement, duties of directors and auditors' report will be the same, practically word for word, in any set of accounts you read, while, in most cases, the income statement and balance sheet can be taken with one giant pinch of salt. These days, only the cash-flow statement (together with key notes) provides any worthwhile information.

Malcolm Howard FCMA FCCA

Banstead, Surrey

Hospital disaster: what went wrong?

One of the most noteworthy features of the mid-Staffordshire health catastrophe seems to have been the deafening silence from the body of NHS consultants.

They may well have been told to remain tight-lipped by their NHS management and their professional indemnity advisers, but nevertheless they must bear a significant share of responsibility for the situation, if only for continuing to work under circumstances which they must have known were potentially disastrous.

It is very easy for those of us who are no longer involved to look back and say that "it would never have happened in my day" but one has to wonder why the complete silence.

Quite apart from the reduction of their responsibility for "running the ship" that has followed inevitably in the wake of the new NHS management structure, another aspect must be considered. The increasing privatisation of the NHS, and the consequent blossoming of the numerous "private health providers", has seen a significant shift in the overall relationship between the hospital service and its consultants.

A generation ago most of them regarded the NHS as the main source of their status and their livelihood. Today with the spread of private practice and private hospitals, their dependence on, and emotional attachment to, the NHS has lessened, as has the tenacity with which they are prepared to defend its standards of service.

Frequently nowadays one feels that deficiencies and shortcomings are accepted as the inevitable norm and shrugged off as the "responsibilities of the management". Work must go on, turnover must continue, with targets achieved.

Perhaps the consultants of today, who are, after all, still the pivot around which most of the system revolves, should recall that when Dr John Snow (at some risk to his own welfare) disabled the Soho pump, the incidence of cholera fell significantly.

Dr Angus MacDonald

Mayfield, East Sussex

The appalling saga of the abuse and death of patients at Stafford Hospital should be laid firmly at the door of New Labour where it belongs. Their obsession with targets, balancing the books and achieving foundation status were clearly what drove the hospital trust, and not patient care.

Could they have got away with this neglect for years if there had been an alert community health council operating in their area. When I was a community health councillor we did regular inspections of all services and would spend hours sitting in accident and emergency departments and asking patients their experiences.

Unfortunately these highly successful bodies were abolished by that arch Blairite Alan Milburn in 2002 and the patient advocates system that was supposed to replace them has clearly failed. Perhaps it is time to reinvent the wheel and restore community health councils.

Hugh Kerr


Targets should be used with caution. In business, a sales target alone can lead to increased costs due to extra people on the road, while a costs target can lead to lower sales, due to poor service to customers. Similarly, a target on return on capital alone can lead to stock shortages, to reduce the capital tied up in the warehouse.

Targets should therefore be combinations of these three factors, as well as others according to each business. This is old hat to people in business, but not apparently to the politicians or to the managers of hospitals.

W R Haines


The real message of the Stafford Hospital debacle is the self-serving structures of NHS management. Driven by superfluous echelons of bureaucracy and a dysfunctional Department of Health, a kind of hundred-headed hydra, it strives mindlessly to serve the managerialist agenda of targets, of non-clinical directives, of organisational change for change's sake.

Best to abolish PCTs, Strategic Health Authorities, and the numerous ad hoc agencies that fester in the overgrown health jungle. All you need is frontline trusts and a robust quality inspectorate, only working at professional, clinical outcomes.

Dr Trevor Turner

South Hackney Community Mental Health Team

London E2

Yesterday I heard Alan Johnson, the secretary of State for Health, blame "all levels" for the disaster at the mid-Staffordshire hospitals, but no admission of guilt for imposing a wardrobe of emperor's-clothes targets on the NHS.

Now we know just how useful "foundation trust" status really is to patients, but his allegation that "all levels" caused this mayhem also shows us what he really thinks about the ordinary nurses, doctors, laboratory technicians and cleaners who clearly struggled to provide a service despite their incompetent management.

Ben Wyatt

Ripponden, West Yorkshire

Mistakes of EU mission to Chad

If the UN peace-keeping mission to Chad had not been sub-contracted to the EU for its first year (report, 16 March) fewer question marks would have been raised over its effectiveness and continuity.

The EU procured its UN mandate at what should have been the perfect time from the operational perspective – the end of the 2007 rainy season, when armed rebels were able to step up their activity. But it failed to deploy until five months later, in February 2008, and that deployment was then interrupted when the attempted coup in N'Djamena famously left the country "not peaceful enough for a peacekeeping mission".

An ad-hoc force, with Russia as the EU's sixth largest troop contributor, was preferred even to one of the much-vaunted "EU battlegroups". Russia also had to supply helicopters after no member state was willing to come forward.

There is an appalling humanitarian and security situation in Chad. The EU could have spent the common costs of military deployment – well in excess of £100m according to the latest figures – on expanding its programmes of humanitarian assistance and civil reconstruction, and left the task of ensuring timely dispatch of a peace-keeping force to the UN itself.

Geoffrey Van Orden MEP

Conservative Defence Spokesman in the european parliament, Chelmsford, Essex

Likely deals after a hung parliament

Steve Richards (17 March) fails to consider one crucial factor in his argument that a Labour-Lib Dem coalition is likely if the next election delivers a hung parliament. The electorate might regard any attempt to shore up a defeated Labour government as going against their wishes.

Attempts by Ted Heath in 1974 to stay in power by making a deal with Jeremy Thorpe foundered on warnings, from then Young Liberal Peter Hain, that mass resignations from the party would follow.

My own research into hung local councils during the 1990s found that opposition parties uniting against previous rulers was the most likely outcome. So don't rule out a Conservative-Lib Dem coalition, even if the Tories remain unenthusiastic about electoral reform. Thirteen years without power concentrates the mind wonderfully.

Mick Temple

Professor of Journalism & Politics, Staffordshire University

Train-spotters are welcome

We welcome train-spotters to all of our stations and will continue to do so (letter, 18 March); they will receive a platform pass free of charge from station staff, as will others wishing to go on to platforms to meet customers who are travelling. This is existing practice at many railway stations which already have gating.

Gating is a franchise commitment agreed with Government. It will help to prevent fraudulent ticketless travel and protect revenue, which will be channelled back into the rail industry.

Susan Goldsmith

Managing Director, National Express East Coast, York

Fans of the royal rally driver

You suggest the Queen has had little chance to indulge her enthusiasm for motor sport (leading article, 11 March).

After watching polo in Windsor Great Park in the 1960s, our family missed the correct exit, arriving on the gravelled descent to the arrow-straight Long Walk, a metalled road which leads to Windsor Castle. We got out of the car to marvel at the view but took cover, hearing an approaching car, high-revving and kicking up the gravel as if on a rally special stage.

Holding her Vauxhall estate car in a controlled drift, the Queen, driving alone, expertly corrected as she hit the Long Walk straight and then put her foot down. In a moment, she was gone. My stepfather, who drove Bugattis, was impressed.

David Wardrop

London SW6


Entering politics

You say that a politician who seeks to "play politics" with the matter of foreign workers in the UK should be judged harshly (editorial, 17 March). Do you not realise that the matter of who populates the country and, consequently, who works here and who votes here, is not "playing politics". Rather, it is the essence of democratic politics.

Alistair McConnachie


Roots of hatred

W Reid's assessment (letter, 16 March) is typical of the blinkered attitude that has plagued Scottish society for so long – that somehow religious schooling is to blame for sectarianism. I live in London now, and there are several Roman Catholic and Church of England schools near my house. Yet I hear no chants of "Fenian bastard!" when I walk along the road in a Celtic or Ireland top. Until the Irish community in Scotland is accepted, respected and embraced as part of a multicultural society, the hatred will continue. But don't blame the schools.


London E17

Godless analysis

Canon Warner's letter (18 March) suggests that if there is no God the post-modernists may be right and "there are no ultimate truths or values, only what the individual chooses to accept". This is a bizarre non sequitur. Scientific evidence can validate empirical truths and logical reasoning conceptual truths. Far from assisting this process the concept of God gets in the way of it.

Jim Cordell


Reward of honesty

Philip Hensher's item (16 March) about the people of Alresford who found £400 blowing in the wind reminded me of how in the mid-1940s two friends and I found a £1 note on our way to primary school. I will let others calculate its current equivalent value. The police station was on our way, so we handed it in. We were told that if it were not claimed within three months it would be ours. Imagine the delight of three small boys when we later collected 6s 8d each. This also happened in Hampshire.

Keith Tizzard

Ottery St Mary, Devon

Treatment for all

Dave Ridley suggests the NHS should charge for treating "self-inflicted wounds" arising from excessive drinking (letter, 17 March). We would be interested to know what he thinks about treatment for skin cancer sufferers who have used sunbeds or rugby players who suffer repeated head injuries. NHS treatment is free for everyone as it is impossible to objectively define what a "self-inflicted wound" is.

Lisa Thompson

Alexander Montague