Not a patch on Business Link...
Has anyone had a nose around the Beta site yet? https://www.gov.uk/
At the moment it is not a patch on Business link as a source of information and advice! Hopefully the site will have MUCH more added to it if it is to be as useful.
I am all for streamlining and making simple, but some things in business require in depth guidance and information, which Business link seemed to perform very well. It is a useful and clear source of information to people with some knowledge of certain areas and just looking for clarification, but also great for those just starting out or thinking of starting a business. At the moment the Beta site section for business has 8 headings that don't appear to have any coherent theme, followed by a list of brainstormed topics, rather than sensibly categorizing areas that might be of interest to small businesses.
Room for improvement on first impressions. My advice to small businesses? Search every conceivable topic you might need help with on the business link website and save the guidance before it disappears next month!
Freehold values are actually very low, and not based on the value of the land as such. How would you seperate the value of the land from the value of the properties built on it? You couldn't use the value of the land before any properties were built either as the value at that time would have included a premium for development potential.
Freehold values are usually based on the future income that owning such a freehold would generate. The thread on the following discussion forum is quite a good example - http://www.landlordzone.co.uk/forums/showthread.php?6345-Buy-freehold-or-not-Auction-vs-enfranchisement
So if you wanted to value the freehold in the accounts, I would have thought a simple formula like the one in the thread would be sensible rather than incurring professional fees on such a low value asset. Someone who practices in this area may be able to offer a more experienced view, but values must be too low to get overly flustered.
I have not dealt with freeholds at all in a professional capacity, I merely looked in to it once as potentially somewhere to spread my savings (buying commercial freeholds at a property auction) but decided against it pretty promptly!
Surely the company (in whatever form) does not own the propery, merely the freehold?
Expectations Gap indeed
I do agree with a lot above that the auditors role is to check whether the accounts are materially misstated, and set that level of materiality based on a risk assessment of the client and the type of organisation.
The role of the auditor is not specifically to identify fraud (however clearly if fraud is identified in the course of an audit they should act accordingly).
There are however quite rightly questions to be asked surrounding the systems and controls that are in place. It would appear that there is a failure to segregate duties (who set up the new supplier from whom the invoices came, who authorised each invoice, who entered the invoices on to the accounts system, who set up and then approved the payment?). Either there was no segregation of duties and Mr Joyce carried out all these tasks (the auditors review of systems and controls should have identified this as a risk if there were no segregation of duties, and planned additional testing accordingly), or, there was a supposed system and segregation of duties, but in which the controls were perhaps poor. In the second scenario the auditors could quite easily have tested the system, and in their sample all controls were adhered to (invoices stamped, reviewed, signed, payment limits etc).
So they may have just missed these payments in their testing of controls in the second scenario. It would then just be chance as to whether they identified these payments in the rest of the audit. Partly because you are relying on the controls testing to ensure that the system is sound before you carry out the rest of the testing. In reality the on site team will be made up of some fresh faced uni grads, maybe some more experienced Semi-seniors(not yet qualified), an onsite supervisor/assistant manager who is one or two years outside of qualifying and an offsite manager (or maybe even less if a small client). Cash would probably be given to the newbie to do as it is an 'easy' section. All you do is match to bank statements for 3rd party evidence and then do a little testing around cut-off to make sure the figures aren't being massaged right? Oh, but what if the payments weren't genuine? Ah, then lets match them against an approved invoice and all is good again...right? None of which would have picked up this fraud unless the invoices were coming from 'Joyce Limited' and alarm bells should have been ringing! So again, I would have thought it all hinges on what assessment of the system and controls took place and whether it was correct that GT relied on these controls (if they did).
I guess we will find out eventually what happened and whether GT carried out their audits properly, but I think a determined fraudster could easily stay under the radar in an audit, especially if controls allowed them to create what look like genuine transactions.
The boards of these charities do however need to take a look at themselves and look closer to home for a portion of blame. An auditor simply cannot find in a couple of weeks what the directors may have missed every week of the year. Had this been another 'rogue trader' in a bank you can bet the papers would be calling for heads to roll in the board room. Will the same demands be made of the board of a charity that takes its eye off the ball?