This article was first published in the July 2018 UK edition of Accounting and Business magazine.

Q Impairment tests are a big deal for my client. Are they equally important for investors?

Management wasting shareholder money on overpriced piles of junk is definitely a big deal for investors, but that doesn’t mean there is universal support for the current impairment model. The Corporate Reporting Users’ Forum (CRUF) sent a letter recently to the European Financial Reporting Advisory Group saying: ‘We think the debate on the maths of impairment testing misses the point.’ The point, CRUF argues, is that it is now time to debate not how you go about impairing an asset but whether you should impair at all. ‘When a business is a true going concern, goodwill should be on the statement of financial position forever unless the associated business is closed or sold,’ it added. ‘This would make it easier to assess returns over time and reduce the incentive for incoming management to write off assets.’

Of course, it wouldn’t be a market if all investors thought the same way. Some see impairment charges as part of the governance of companies – an appropriate act of public humiliation for profligate management. But CRUF makes a very good point: once the capital invested in a business has been written off, it’s hard to keep tabs on it and the returns it generates, which sounds pretty fundamental to the governance of companies to me.

Q The investor in AB’s video series (see box) says he would like assurance to go beyond the back end of the annual report. What should it cover?

In my experience, most companies talk to their customers and then figure out if there is something they could do to make their products more helpful. Maybe its time for assurance profession to do the same.

To be fair, the audit opinion (quite apart from the scrutiny audit overall is receiving) is undergoing a shift in tone, and there has been some extensive engagement with investors about that. But maybe it’s time to talk about scope. For example, would investors like to see those metrics that move markets or those that underpin remuneration packages subject to some form of independent scrutiny?

I don’t know. But if we don’t ask the question, the profession runs the risk of becoming obsolete as others take the opportunity to step in to fill the void.

Q Most companies seem to encourage their staff to work from home for at least one day a week. Is this a further nail in the coffin of UK productivity?

As one who works primarily from home, I take exception to the suggestion that I’m contributing to today’s low productivity. Admittedly, my home has never been cleaner, and I’ve grown to love the smell of freshly baked bread in the morning, but I get far more done at home than I ever could amidst at the office. I agree a day at home for some might not be the most valuable use of time. But for others, it’s the four days in the office that’s the problem!

Q What are you packing for your holiday reading this year?

That’s a tough question. Should I go for books that help my professional development? Perhaps Alexandre Dumas’ The Accountant of Monte Cristo or Muriel Spark’s The Primaries of Miss Jean Brodie. Or maybe something that focuses on a current reporting controversy, such as Richard Dawkins’ The Goodwill Delusion. Of course, those rainy days by the seaside might be a good time to contemplate pressing issues such as the gender bias that seems endemic in corporate life. I believe Ernest Hemingway’s The Old Man and the C-Suite offers remarkable insight there. Then again, I may just leave behind all things professional and read one of my all-time favourites, Thomas Hardy’s Far from the Adding Crowd. Happy holidays to you all.

Alison Thomas, consultant