If only `torn books' repaired themselves `as they landed upon their shelves'
August, 31st 2006
The Ministry of Magic, as you might know, takes responsibility for the whole Wizarding community and prevents the non-magical population from getting wind of witches and wizards still living in secret all over the world. "A difficult job that encompassed everything from regulations on responsible use of broomsticks to keeping the dragon population under control," explains Fudge to Prime Minister, in the first chapter of Harry Potter and the Half-Blood Prince, by J. K. Rowling.
Often, accountants in the Muggles domain too have a similar responsibility: of keeping the non-accountant population from getting wind of the strange goings-on in the world of bookkeeping. A tough task, in fact, encompassing everything from regulations on `responsible' use of accounting policies as specious brooms for sweeping irksome transactions under the spacious carpet of well laid-out financial statements, to keeping the dragons of audit qualifications under control. Else, the skeletons would tumble out of cupboards.
Such as in St Ives, `the firm best known for printing the Harry Potter books,' as Simon Bowers writes in a story dated August 30, on http://business.guardian.co.uk. St Ives said on Tuesday that `a young member of its finance department had left the company' after accounting errors came to light when directors were tidying up the books ahead of an annual audit.
A press release dated August 29 on the St Ives' site www.st-ives.co.uk has a `trading statement' that informs: "Our normal year-end review and subsequent investigation has revealed serious accounting errors in the Point-of-Sale Division. These have resulted, principally, in costs not being properly expensed, an over-valuation of work-in-progress, and unrecoverable debtors."
Point-of-sale products and services account for about 40 per cent of commercial products revenue, says `about us' on the company's site. "Campaigns are mainly bespoke, store specific and produced to tight timetables to meet marketing needs." The division caters to Bacardi, Marks & Spencer, Boots and Jaguar for `in-store posters and cardboard cut-outs,' as www.thisismoney.co.uk explains, citing Evening Standard.
"The news sent shares in the company, which also prints Accountancy Age and magazines such as Vogue and The Economist, down by 10 per cent," notes a three-hour-old story on www.accountancyage.com. Apart from magazines, St Ives also prints annual reports and DVD inserts, as http://business.timesonline.co.uk states. It adds that problems wider than the accounting errors are that of overcapacity and steeply rising costs.
On this, www.findarticles.com has an April 15 story sourced from The Independent, which explains that much of the damage is being done by privately owned rivals that have drastically cut prices to win new business. "St Ives has announced a 24 per cent drop in pre-tax profits to pounds 15.6 million in its interim results. These figures were made worse after the group was forced to place work with rivals after it had to temporarily shut its US operations in Florida because of Hurricane Wilma."
In June too, there was an alert from the company. "Magazine and brochure printing, with print runs of more than 2 lakh copies, has been affected by two rival plants opening in the UK, while direct mail has been hit by a marketing cutback at credit card companies," said http://www.mediabistro.com.
St Ives operates in six markets books, direct response, financial, general commercial printing, magazines and multimedia. But for books, performance has been of concern in other segments. The latest annual report speaks of best sellers such as: "The Two of Us: My Life with John Thaw (Sheila Hancock) for Bloomsbury; Cloud Atlas (David Mitchell) and Farewell but not Goodbye - My Autobiography (Sir Bobby Robson) for Hodder; A Long Way Down (Nick Hornby) published by Penguin; The Family Way by Tony Parsons for Harper Collins; Small Island (Andrea Levy) and Lifeguard (James Patterson) for Headline; Trace (Patricia Cornwell) published by Time Warner Books; and Saturday by Ian McEwan for Random House."
The 2003 annual report spoke of Harry Potter and the Order of the Phoenix by J. K. Rowling for Bloomsbury. And, a year earlier, the company mentioned: "Artemis Fowl (Eoin Colfer), Learning to Fly (Victoria Beckham), About a Boy (Nick Hornby), True History of the Kelly Gang (Peter Carey), Billy (Pamela Stephenson), The Lord of the Rings (JRR Tolkien), One for my Baby (Tony Parsons), 1st To Die (James Patterson), White Teeth (Zadie Smith), Dave Pelzer's autobiographical trilogy, Dead Famous (Ben Elton), Memoirs of an Unfit Mother (Anne Robinson), Isle of Dogs (Patricia Cornwell) and further printings of the four `Harry Potter' titles."
While the accounting problems that have now surfaced are expected to wipe 2.8 million off St Ives' full-year profits, a silver lining is that the company is of the view that errors are due to `incompetence' rather than fraud. "We have not found any trace of fraudulent or deliberate manipulation for personal gain. There is no cash impact on the group," is a quote of Miles Emley, the chairman, cited by Susie Mesure on http://news.independent.co.uk.
Alas, the line between error and fraud is thin. Keeping aside that debate, therefore, let us take a dip into the Half-Blood Prince to see if there could be any support for the printer from the story. For, doesn't Dumbledore ask politely, "Would you like my assistance clearing up?"
A quick check shows that `check' appears 43 times, as in `boxes of quills, which came in Self-Inking, Spell-Checking, and Smart-Answer varieties,' and "We ought to check that there's nothing odd about it," as Hermione tells Harry.
`Books' appear in 34 places, including `a number of spellbooks' lying `higgledy-piggledy,' and `torn books' repairing themselves `as they landed upon their shelves', and `the most horrible books, where they tell you how to brew the most gruesome potions'. Audit finds no place, though `account' is present, beginning from gold that gets added to Harry's account, from the legacy Dumbledore would read out.
Many words from the accounting world don't find use in the book of wizardry. These include debtor and creditor, villain and finance, profit and cash. `Error' occurs once, gravely, and six other times it comes embedded in `terror'. Unnervingly, `a bit of a fraud,' has a place too.