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By Andrew Newton on 07 Sep, 2009 - 10:59 UTC

The headline in the Washington Post piece says "Lobbyists Feel the Pinch As Downturn Hits K Street".

 

If you read the article there is certainly evidence of a tail-off in the amount corporations spend trying to directly lobby congressional representatives.

 

But as the article points out, it may not be so much a reduction in spending as a redirection of spending to activities that are less public, less accountable and often frankly less honest:

 

Lobbying insiders say factors other than the economy are driving down the numbers. Trade groups and private corporations, for example, increasingly are pouring resources into television ads, grass-roots organizing and other advocacy efforts not counted under the narrow definition of lobbying required for House and Senate disclosure forms.

 

Whereas the article points to the defense industry as an example of one that is spending less because of the downturn, an unrelated New York Times article seems to suggest a different reason:

 

Despite a recession that knocked down global arms sales last year, the United States expanded its role as the world’s leading weapons supplier, increasing its share to more than two-thirds of all foreign armaments deals, according to a new Congressional study.

 

The United States signed weapons agreements valued at $37.8 billion in 2008, or 68.4 percent of all business in the global arms bazaar, up significantly from American sales of $25.4 billion the year before.

 

Not so much a downturn in lobbying expenditure, then, as a redirection to politically friendlier places elsewhere?

The Oakland, CA - based builder of prefabricated green homes, Michelle Kauffman Designs, will be closing as a result of the banking crisis in the United States. Difficulty with project financing is reportedly a major culprit in the company's inability to continue.

An investigative report by Francine McKenna at re:The Auditors raises conflict of interest questions about PwC's IT implementation business.

 

Auditor independence is essential to audit work, but some of the Big 4 audit firms - or at least some of their partners - are not happy with their cosy oligopoly and want a piece of the more lucrative consulting and big project (especially IT) implementation market. That might be fine if they were not offering consultancy to clients they were also auditing, or auditing clients that they hoped to get consultancy work from.

 

Satyam, the Indian IT outsourcing company, housed one of the biggest accounting frauds discovered over the last year, and PwC was the auditor. In the report Francine reviews what appears to have been a strategic relationship between PwC and Satyam for the delivery of IT implementation services to PwC's IT consultancy clients.

 

Time to clamp down again on auditor independence?

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The business school at Edinburgh University is launching a service to provide firms with like-for-like carbon emissions comparison data.

 

Carbon ENDS, as the service is called, is run by Craig Mackenzie, a senior lecturer at the school. They will be taking groups of companies by sector and producing company funded peer-group comparisons. The first report, due this month, compares companies in the UK supermarket sector.

 

The service builds on the university's work in running an MSc in climate change, and their work in developing an MSc in carbon finance. MBA students and undergraduates are also able to take an optional course in climate change.

Christian Aid is urging leaders of the Big Four accounting firms to come out in favor of country-by-country tax disclosure for multinationals.


The non-governmental organization believes that tax avoidance by multinational companies costs developing countries some $160 billion a year in lost revenue.


According to the Tax Research blog, Christian Aid is urging its 80,000 members to join in a mail-in campaign targeting the heads of the Big Four: John Griffith-Jones (KPMG), John Connolly (Deloitte), Jim S Turley ( Ernst & Young) and Ian Powell (PriceWaterhouse Coopers LLP).

The US Financial Accounting Standards Board has proposed a new staff position to tackle off balance sheet financing that helped aggravate the crisis.

 

The FASB is working closely with the International Accounting Standards Board to review the role of accounting rules in bringing about and aggravating the crisis.

 

The FASB Staff Position (FSP) covers valuation techniques for off-balance sheet items.

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It's only a first generation direct-impact sustainability report from a major consultancy that advises on sustainability reporting, but its a start.

A new proprietary standard for reporting corporate sustainability performance claims to make sustainability reports simpler and contextual.

 

The non-profit Center for Sustainable Innovation (CSI) has entered what has been a narrowing field of standard setting for corporate responsibility reporting with the launch of its True Sustainability Index(TM) (TSI).

 

Whereas there is much emphasis in other reporting standards on tracking trend data and internal efficiencies, the TSI claims to focus on a company's performance relative to the actual resources available. Performing better than last year or than peers is all very well, the rationale goes, unless the contextual information about resource availability suggests that resource use is clearly unsustainable.

 

CSI's Executive Director, Mark W. McElroy, argues that "Whereas GRI has long advocated for the inclusion of context in non-financial reporting, we have finally found a way to do it, and at the same time have reduced GRI-type reporting from 150 metrics to 15!"

Business Green looks at the role of stakeholder engagement, third party verification and standards in strengthening corporate responsibility reporting.

 

British American Tobacco, SAP, ITC, Skanska AB, AccountAbility, GRI and Tetra Pak all get mentioned.

The International Accounting Standards Board is under pressure from European banks regarding the treatment of collateralized debt obligations (CDOs).

 

The IASB, argues Leon Gettler, has not shown much ability to make decisions independent of political interference in the past, but needs to be made of stronger stuff to meet this new Can standardchallenge:

 

"Synthetic CDOs are hypothetical portfolios - the issuer need not hold the portfolio and there need not be an actual portfolio of loans. Rather than being based on real loans, they are built around credit default swaps with banks.

And therein lies the perversity, because investors are essentially placing bets on bets. The heat is on the IASB to change the rules - from European banks that don't want them to know their risk exposure. They are demanding the IASB relax international accounting rules that force issuers to account for derivatives at fair value and be more like the American banks that, under their standards, can keep investors in the dark about how much those notional assets are worth."

The International Federation of Accounting (IFAC) - the global professional association for accountants - has produced a sustainability framework.

 

According to Greenbiz, the framework "is a web-based tool that targets professional accountants working in all kinds of different organizations who the IFAC believes can "influence the way organizations integrate sustainability into their objectives, strategies, management and definitions of success."

...

IFAC borrows heavily from the decade-old SIGMA Project. This project developed guidelines to help provide clear, practical advice to organizations to help them make move down the path towards sustainability. It was the first effort to link management systems, risk management, business excellence frameworks, the three responsibilities, and continual improvement into a single framework."

 

GreenBiz observes that the tool helps accountants by cutting through the internet "noise" on sustainability and giving them a coherent framework for action, one which, they note, CSR and sustainability officers often lack.

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