Accusations of poor accounting practices fly

Industry news roundup: week ended 26 Dec 2013:

This week there’s been a raft of rows over accounting practices as not one but two companies stand accused of playing fast and loose with the rules.

First up comes telecoms provider BT being called on the carpet by its rival TalkTalk for engaging in the kind of underhanded accountancy tricks to foist almost  £120 million in costs to its broadband customers this year. Fellow rival BSkyB actually joined forces with TalkTalk to call for better consumer protection following BT’s move.

The revelation of the accounting acrobatics came after Ofcom, the regulatory body for the communications industry, asked BT for a detailed report on how use of the provider’s copper telecoms network was billed to the rest of the industry. Upon receiving the report, Ofcom was told that the costs were reallocated in such a manner that the industry has no choice but to recover BT’s costs – which set off the row with both TalkTalk and BSkyB.

While BT only has to face getting chewed out by its rivals for its accounting practices, other firms aren’t quite so lucky. One such company – tool rental group Speedy Hire – ended up losing its chief executive in the wake of a scandal that saw the firm’s international division being unable to properly account for anywhere between £4.5 million to £5 million in cash, and things aren’t looking very good for the Dubai-based division.

Honestly I don’t know who blew the whistle on this one, but I’m glad it happened. And while £5 million is dwarfed by the massive £120 million that BT is accused of gathering through methods that harm consumers, you don’t see the chief executive of BT stepping down, do you? Seems as if the telecoms giant still thinks its beyond the touch of regulation. I can only hope that Ofcom makes sure things are adjusted in favour of better consumer protections. It’s only fair, after all.

Speaking of fair, when are relatively smaller firms going to be targeted less when it comes to accounting issues? Every day I seem to hear more and more SMEs are falling prey to all sorts of accounting disasters, whether it be IR35 or tax evasion or something else. Can we please turn some of that focus on larger firms for once and leave the small business owners alone?

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