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Ethics, Sir Bradley Wiggins and the accountancy profession

7th Mar 2018
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Tour of Britain Cycle Race 2016, Congleton, UK
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It was very sad to get confirmation of what had long seemed inevitable, the news that Team Sky and its knights, Sir Bradley Wiggins and Sir Dave Brailsford have been wearing rather tarnished armour.

While the story of drug-enhanced performance had been waiting to break for some time, using parliamentary privilege, a select committee from the Department of Digital, Culture, Media and Sport has pointed a very direct collective finger accusing the team of outright cheating, albeit within some rather unsophisticated regulations.

Lord Coe and Sir Mo Farah are also in the frame for taking liberties with the truth and sailing closer to various winds than the committee deemed appropriate.

The media and the country built up these heroes to almost god-like status as gold medals funded by the public purse have flooded in, cheering as our boys and girls vanquished Johnny Foreigner again and again.

Discovering that they only managed to do this by bending or breaking the rules is depressing and one can only imagine that there will be an outcry if Great Britain is banned from the next (summer) Olympic Games in the same way that Russia was from the recently concluded winter equivalent.

A personal view from this commentator is that the efforts of our sportsmen and the administrators behind the scenes, who seem willing to do almost anything to facilitate the winning of gold medals thereby gaining additional funding for their own sports and businesses merely reflects current attitudes across society.

The winner takes all, get-rich-quick culture that can be seen in everything from the National Lottery to bonuses for city bigwigs and competition in every facet of British life today is inevitably going to tempt people to maximise their opportunities. Indeed, the importance of success is reflected by the fact that all four of the individuals named by the committee (and referred to above) are Knights of the Realm recognised by the government and the Queen with ennobling prefixes.

Looking at our own industry, similar attitudes are becoming increasingly prevalent with competition leading to behaviour that may be within the law but is still regarded by the man in the street (and at number 11 Downing Street) as abusive and unethical.

Is there anything wrong in signing off a set of accounts for a company like Carillion without managing to spot that it was about to go out of business having ramped up debts that could never be repaid?

Looking a little closer to home for many of us, is it acceptable to help clients to save taxes? The answer is an irrefutable “yes”, provided that the methods that we use are within the law. The problem, in this case, is that the law is so badly and confusingly drafted that frequently experts cannot be certain as to what is and is not permissible. Then our political leaders step in to criticise behaviour that Sir Bradley Wiggins would certainly regard as valid but then he believes that taking asthma tablets when you don’t have asthma is fair game.

Going one step further, and really getting to the crux of the matter, frequently advisers will recommend steps that are clearly against the spirit of the law, arguably abusive and unethical, but just about within the letter of that law. If accountants and tax advisers continue to use methods that follow these principles, could we one day end up knighted, probably not; could we end up reviled by Parliamentary committees and the general public, far more likely.

Replies (20)

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By Caber Feidh
08th Mar 2018 02:29

It seems that the knights remained within the letter of the law but are now being pilloried for - perhaps - stretching only the spirit of the law. On the published evidence, they have not broken any laws, unlike Russians and East Germans. As Mr Fisher suggests we may need better written laws.

The current furore does seem another example of the press building people up and then, when that no longer sells papers, knocking them down again.

How can the World Anti-Doping Agency legislate for dual-use medicines? I do not suffer from malaria but I do, before physical activities, take quinine because it removes the symptoms of a muscle disorder. The quinine is on prescription for that specific purpose. It allows my muscles to work normally, but if I was thus able to pedal my bicycle so fast that I won a medal would that make me a drug cheat?

In case any of what I have said implies I am happy with what is alleged to have happened, I am not. I offends against my British sense of fair play, level playing fields, straight bats, etc. Alas that is not the way the world works.

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By chatman
09th Mar 2018 09:36

Fair play to Bradley Wiggins; when I was on drugs I couldn't even get on my bike, let alone win the Tour de France on it.

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By AndrewV12
09th Mar 2018 09:56

Extract above
'Looking at our own industry, similar attitudes are becoming increasingly prevalent with competition leading to behaviour that may be within the law but is still regarded by the man in the street (and at number 11 Downing Street) as abusive and unethical.'

Not much

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By AndrewV12
09th Mar 2018 10:02

It appears Sky were desperate to win the Tour de France, so much so they tried a bit of everything. I am no expert but i have heard there was no way he should have been given a 40mg doses of triamcinolone acetonide – (a corticosteroid permitted for the treatment of pollen allergies).
A 40mg dose is for those with server illnesses.

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By david kidger
09th Mar 2018 10:16

Ethics in the accountancy world are pretty much non-existent. I know of a CFO of an internationally listed global group that tells subordinates to look the other way when management fraud is discovered. I also know of numerous listed groups where the relevant organisation's corporate governance has failed that includes fraud and financial miss-reporting and the auditors have dismiss the issues due to materiality.

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Replying to david kidger:
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By chatman
09th Mar 2018 10:23

david kidger wrote:

Ethics in the accountancy world are pretty much non-existent. I know of a CFO of an internationally listed global group that tells subordinates to look the other way when management fraud is discovered. I also know of numerous listed groups where the relevant organisation's corporate governance has failed that includes fraud and financial miss-reporting and the auditors have dismiss the issues due to materiality.

And there is the case of HSBC laundering money for a Mexican drug cartel when Rhona Fairhead, subsequently made chair of the BBC Trust, was head of compliance at the bank.

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By RogerMT
09th Mar 2018 10:30

"...taking asthma tablets when you don’t have asthma is fair game." Careful! Wiggins has said in interviews in the past that he's suffered from asthma since the age of 15.

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By RogerMT
09th Mar 2018 10:36

Ethics in the accountancy industry are much like anywhere else. The higher up you go, the more fast and loose the attitudes. This is why a council chief exec sacked for incompetence, or a football manager sacked for being useless get their fat contracts paid off, whereas the humble average wage earning employee suffering the same fate gets nada.
This has been the way in UK plc since 1979, and I'd bet a large majority of accountants have voted for it at every election since. Keep on approving laissez-faire capitalism, this is the result.

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By JDBENJAMIN
09th Mar 2018 11:18

Yeah, it's all somehow caused by Margaret Thatcher, innit. Hello, Dave Spart!

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Replying to JDBENJAMIN:
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By chatman
09th Mar 2018 11:22

?????

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Replying to JDBENJAMIN:
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By RogerMT
09th Mar 2018 13:14

Yes, I am that odd contradiction, a left-wing accountant. I can play left back too. :)
And, actually, yes, all this deregulation can indeed be traced back to Mrs Thatch.

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By alltaxedout
09th Mar 2018 10:42

If the law is confusing then it needs redrafting.

If I am poor and I discovered that I overpaid tax of £10,000 8 years ago (when I was wealthier) because of a mistake by HMRC, then ethically that money should be repaid back to me. HMRC would ignore ethics and say I'm out of time to reclaim it. It's an extreme example but HMRC do argue the law in their favour even if it can produce a spurious result against the taxpayer.

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By David Winch
09th Mar 2018 11:46

If the "letter of the law" doesn't reflect the "spirit of the law" then surely the law needs to be re-drafted.

Whilst we obviously can't have split-testing of different wordings of statutes, should it not be easier to re-word laws in the light of experience?

If the law is a "donkey" [the only meaning of the original that had subsequently been redacted], the lawmakers should be blamed and tasked with improving it (there are many lawyers in Parliament I believe), and the citizen who keeps within its current format should not be blamed.

David Winch
Sales & Marketing Consultant, Cambridge

P.S. I've never had a minute's legal training in my life!

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By G Webber CTA
09th Mar 2018 10:56

Good article and in general I would agree.

I deal with contractors who have had, in my opinion, a pretty raw deal from all of those who were "advising" them. These included some rampantly commercial promoters who to be fair, were not affiliated with a recognised advisory body for accounting or tax and therefore caveat emptor should have been the watchword(s).
However, many advisers took commissions and payments from such firms for recommending their product and could (and should in my opinion) at least have warned about some of the risks. I have comprehensively researched the materials made available and can say that such warnings are as rare as rocking horse teeth.
To compound matters, some firms who advised clients to enter schemes that are now the wrong side of the ethical line and belatedly the legal line, are now charging fees to "solve" the problem.
I have observed here before that some of the practices we have uncovered in our research, do not reflect the accounting and tax profession as being on any moral high ground. And yes, I expect to be again criticised for this, but I am confident that I have proof to back this view.

I think however that what really sticks in my throat is how MPs can have the gall and brass neck to lecture that majority of our profession who do take considerable care and genuine concern for clients, on morals!
I suggest that they might want to examine their own behaviours first and decide for instance, that speaking in support of a policy, any policy, which your party has decided is correct, despite your personal reservations, and knowingly misleading by not reporting the whole truth or a "white lie", does not give them any platform.

I have in the past year or so had some close dealings with a number of MPs of all colours. I started that process in the hope that our cause was exactly the sort of injustice that MPs say they are there to help with. A year later, I am more cynical about the political process than I have ever been and have witnessed a washing of hands in the name of "strong and stable", that should leave our elected representatives red faced with shame.

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By PK Busness Services
09th Mar 2018 11:04

At the sharp end of the profession (I am a sole practitioner) If our accounts or returns are the slightest suspect we're investigated YET the BIG BOYS get away with MURDER
Tesco
Carillion
equitable Life
ENRON

the list goes on ...

DONT TARNISH the profession and the efforts and hardwork of the oppressed majority of the profession who abide my rules to the letter of the law

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Replying to PK Busness Services:
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By JDBENJAMIN
09th Mar 2018 11:28

Er...None of those companies got away with it. They all got found out and suffered heavily!

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Replying to JDBENJAMIN:
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By chatman
09th Mar 2018 11:36

I think PK Busness Services is talking about the people responsible, not the companies.

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By PMST
09th Mar 2018 12:28

Ethics and tax?
Does the government spend your money wisely? In many cases NOT. They probably try their best but politics now is characterised by mediocrity at best and incompetence at worst.
It is governments job to write appropriate legislation and make sure any loopholes are closed if it so wishes. It is not for us accountants and tax advisors to get involved in 'ethical' arguments about how much tax our clients should 'really' be paying.
It is our DUTY to ensure that our clients pay the least amount of tax LEGALLY possible. It is the goverments job to tell us where the legal line is.
Ethics do not come into it.
Obviously if accountants are shown to have streched the law too far they should be sanctioned.

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By crushedbyhmrc
09th Mar 2018 13:45

How about making accountants and advisers personally responsible for any issues with the tax they are saving the client? That would make them think more about the ethics of what they are doing.

I'd go one step further, why not make this a retrospective change back to 1999 so than any disputed tax liability is transferred to the accountant? That should clean up the industry and make the remaining few think more ethically, no?

I'll go one more step further, introduce an accelerated payment system where the accountant pays all the disputed liability to HMRC up front and then has to claim it back in a court. That should get any dodgy accountants out the way in quick time.

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By SJH-ADVDIPMA
09th Mar 2018 17:53

What this boils down to is everyone's desperation to be financially well off.

Get rich, or die trying is some rappers advice.

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