IFAs should make checks[QQ] I refer to Peter Smith's letter (page 17, 15 July) regarding the checking of net relevant earnings relating to self-employed personal pensions. As an accountant in practice one of the main reasons why I continued to give investment advice under category 'C' in the late 1980s was that clients overpaying contributions without best advice had led to my 'unravelling' several cases. Also agents had arranged to increase contributions without considering the long-term profits figures and without doing the relevant calculations. I feel that an investment adviser should be compelled to check the net relevant earnings and to identify seven years of unused earnings. Closer co-ordination between the investment and tax advisers is certainly required. Some clients have been sold policies shortly after commencing to trade as a 'prudent step' when the priority should have been to establish sufficient working capital. It is still easy to backdate a single pension premium subsequently. David Fearn FCA Matlock, Derbyshire Big stick for small traders I am constantly and pleasantly surprised at the effort that 99.99 % of small companies put in to behaving ethically in their relationship with customers, government bodies and other third parties. In fact the concept of the usefulness of the 'small' company audit is at best questionable, and at worst, constructive dishonesty on the part of its supporters. At one end of the scale £350,000 annual turnover is hardly more than a corner sub post office cum general store. At the other end for an IT consultancy or an architect £350,000 is a significant turnover. My core objection and why I refer to constructive dishonesty is as follows. Statutory audits follow as an addendum to company law. De facto, company 'law' as a protection for the overwhelming majority of companies and, probably, individuals does not exist. That is except as a stick for government agencies to beat private businesses with. A statutory audit requirement in these circumstances is a false comfort. Far better to have a defined voluntary system whereby third parties at risk can call for an audit to protect their interests. This should be coupled with clear and economically viable legal provisions for getting at directors who allow their companies to trade knowing them to be insolvent. The presumption is that any director of a non-audited private company has, both by tax and company law, to keep records of sufficient quality to show whether or not his company is insolvent. David Gordon FCCA, via email If the cheque's in the post, why all the palaver? Surely your article 'The cheque was in the post' (Taking Stock, 29 July) is a joke. The cheque from Simon McKie arrived at the English ICA on 1 April. (The date - get it - nudge, nudge, wink, wink, say no more). If it isn't a joke, and the English ICA mandarins can't bend the rules, ever so slightly, then such inflexibility is going to cost its members a lot of money. I do hope that John Cleese doesn't get to hear of it. I've spent years telling people that chartered accountants aren't boring. Now he'll add stupidity as well. Frank Wood FCA, Stockport, Cheshire All letters should be sent to: The Editor, Accountancy Age, VNU House, 32-34 Broadwick Street, London W1A 2HG Tel: 0171 316 9236 Fax: 0171 316 9250 Or email us on: [email protected] Accountancy Age reserves the right to edit letters for space or clarity. Please include your title, company name and a daytime telephone number.
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