Springfords LLP blog

Some news, views and comments about everything and anything, relevant and irreverent.

Vatican Audit

03 August 2015

Life is a mystery. So said Madonna.  The singer.  If Madge or anyone else needs to unravel the mysteries of church finances, Springfords have chapter and verse.

LIke a Prayer went the song, but whether spiritual and secular, congregations or associations, even we might ask for a little help with the mission facing Cardinal George Pell.  The trained accountant has been handed down the formidable task of auditing the Vatican, where he’s already made some alarming discoveries.

Cardinal Pell is from Australia, and is turning the books upside down.  So far, he’s lifted the cassocks on a few cardinal sins of poor bookkeeping, and discovered over a billion euro in so-called hidden assets.  On the other side of the biblical balance sheet, the antipodean auditor has come up with previously unannounced liabilities of over two hundred million euro.

“Heavens above,” you may well exclaim, and you’d be right.  Those are the sort of oversights that could have HMRC swooping down on you like avenging angels.  It could be very hard indeed to persuade any tax inquisitor that not only was that sort of mistake just a genuine error, but that it was also an error you were putting right, and that you fully intended to meet your tax obligations, and meet them on time too.

On the plus side, a good audit can turn up unexpected benefits.  Maybe not an overlooked billion, but many traders and companies have benefitted from a professionally fresh look at how they’re doing business.  For example, an audit will help you identify any weaknesses in your accounting systems and add credibility to your accounts on a potential sale. So, before you find you have an original accounting sin to confess, maybe an audit would be good thing. 

Most of us shudder at the thought of a thorough rummage through our financial affairs, but finding your own skeletons is the best way forward.  Given that HMRC are often telling us that an investigative audit is only just around the corner - and the odds for getting chosen are far better than winning the lottery - the incentives for being in good shape are all there.

Which presumably makes Cardinal Pell’s job in Rome all the more imperative.  The Vatican’s various departments are notoriously jealous of their own jurisdictions, and are famously non-communicative.  They may answer to a higher authority than HMRC, but that’s not a luxury afforded to the rest of us. 

So, if like the material girl, you'd rather not open your heart to our friends from HMRC, it wouldn’t hurt to be more saintly in keeping your accounting and tax affairs firmly into the groove.

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Some news, views and comments about everything and anything, relevant and irreverent.

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