fun

The author in me

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A Rostrum speech I prepared back in 2003 for the Arch Williams.  It didn’t win.

Have you settled down with a good book lately?  I mean, really settled down?  Settled down so that hours pass, your shoulder hurts and your neck is so stiff and sore.  When you promise your significant other that you will read “just one more chapter” before turning the light off and going to sleep – and then checked to be sure that the next chapter is not just a dozen or so pages long, because that would mean you’ve cheated yourself.
I have been there, done that, so many times.  When you have settled down with a good book, the world could explode into big clumpy bits of earth and rock, and you wouldn’t notice.  You would not care a fig.  The book, the author’s ideas and concepts, are all swirled up inside your head, stirring and mixing and educating you, giving you thoughts you couldn’t have come up with on your own.

I have spent a great deal of my life reading books.  All those authors are inside my head, forming one composite author whose influence on me has shaped me for the better.

In today’s fast-paced world of SMS, email, internet pages, and 10-second grabs on television, however, nobody reads properly any more!  People are so busy texting and emailing and surfing they just don’t read a properly constructed book, a book that takes you on a journey and introduces new concepts and ideas.

I believe that you will open up your mind, be better equipped to think, and be better for it, if only you will read!  Tonight, let me show you, through my own experience, why more people need to let an author get inside their head.  And hopefully you will be persuaded enough to let another author inside your head, and pick up a challenging book and read it.

Thinking back through my formative years, the first book that really grabbed my attention, believe it or not, was the Australian nostalgic classic, Cole’s Funny Picture Book.  I was probably about seven or eight.  Lots of pictures, lots of big words – I was hooked.  Today at 33 I can still quote sections from that book – and I haven’t seen it in twenty years.  “Eat live happy food, not dead, dreary food” was one message to make me eat broccoli; in another cartoon a newspaper reported sombrely that “in news just to hand, the world has blown up and everything in it has been killed – more information as it comes to hand”.  Professor Cole is an author right inside my head indeed.  I must have read that book cover to cover a hundred times. 
Later, as a rugged and wild youth of ten, my doting grandparents had me hooked on that classic of boys’ own adventures, “Biggles” – yes, I know, Biggles and his good chum Algy.  This was of course set in a time when there was nothing wrong with having a very good male friend with whom you knocked about for Queen and Country.  Now, Biggles fairly raced around the world in rather fanciful titles such as “Biggles and the Cruise of the Condor”, “Biggles of the Special Air Police”, “Biggles Sweeps the Desert”.  Biggles – he who was always forthright, smart, and cunning, and always won in the end without ever breaking that oh-so-English morality.  I once had an ambition to own all the books in the Biggles series, and was dismayed when I learnt that there were well in excess of a hundred of these books.  But Biggles certainly stimulated my reading, and although it’s quite dated now (fictional Biggles is 102 this year), the author, Captain W E Johns, did manage to teach me various facts about contemporary history, geography, and there was always a strong moral theme to the books.  And besides, Biggles nearly got a girlfriend in one book!

When I was seventeen, it was all Isaac Asimov – science fiction’s Hercules.  Take scientific theories, flesh them out with a bit of boys’ own action adventure (hmmm, a common theme with the books I read), and science looks pretty darn interesting.  “I, Robot”, “Foundation ” – Daneel R Olivaw was Asimov’s favourite character, and fans know that the R stands for Robot.  Asimov can take you floating over the pebbles of Saturn, warping across sub-space, to the depths of Jupiter’s gas clouds and frozen surface, or into the mind of an alien race.  Asimov could ask “The Last Question”, and force your mind to swim across aeons of time and space to contemplate what is indeed the only question of all.  Asimov – stimulated an interest in science for me that continues to this day. 

But then I was off to University, and university students don’t have time for such frivolity; I was bitterly disappointed when I discovered that in all of the University of Queensland’s fifteen libraries, the closest book to fiction was “Business Ethics” – it was the late eighties after all.  But here too, the authors I read have stimulated me, and provided me again with concepts and thoughts I could not have had.  Admittedly, I could do without “Cost Accounting”, but “Transaction Cost Economics” by Oliver E Williamson – now, when you read that, when you truly understand how economics drives the world you live in, you have pushed your mind across the barriers of the petty and small – something clicks inside your head and you are left awestruck by a single glimpse into the author’s mind.  Now, I could try to explain this theory, but you will have to pick up that book and follow the journey that the author set out to demonstrate his ideas and concepts – he does it far better than I.  Let that author into you.
Now, now it’s not all beer and skittles – some books I have read and not agreed with them at all.  But I have read them, considered their arguments, and thought of rational arguments against the author’s point of view.  And such mental exercise is good for the brain, good for the intellect, and good for you. 

Now, as you can probably tell by now, I’m enthusiastic about the books that authors write.  All books (with perhaps the exception of “Cost Accounting”) stimulate the mind and take you on a journey.  Captain W E Johns and Oliver Williamson could not be more different.  You won’t be transported to another world if you read a text message or email.  When you click on a link in a web page, you aren’t following a journey constructed by an author.  No.  As I have shown tonight by laying bare my reading history – Biggles and all – there are many authors inside my head, authors that form a composite whole.  By reading, I have opened up my mind, I am better equipped to think, and I am better for it.  I have read books from beginning to end, in a sitting or over weeks, as laid out by the author. 

So please, accept my challenge.  Build on that author in you, and stretch your mind, go on that journey.  Pick up a book, read it cover to cover.  Spend the precious time thinking through the author’s thoughts.  Let their ideas and concepts swirl and mix inside your head.  Float amongst the space dust, or dissect the economy as a contractual nexus.  You will then come to appreciate the author that is in you, just as I appreciate all the authors that are the author in me.

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2009 Speaking Year Starts – Pizza and a Speaking Competition!

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Hi y’all.  (sorry, thought that might sound fairly relaxed after the break!).

First Rostrum Speaking Club meeting of the year is next Wednesday (4th February 2009) at the Indooroopilly Library meeting rooms.  Jutta and I thought we would start the year with a fairly relaxed and simple, yet fun, activity of a Pizza Impromptu Speaking Competition.

Essentially – we’ll order in pizza and have an impromptu speaking competition (3 minutes preparation), with senior & junior divisions, winner takes all (there will be prizes).  Please RSVP and let us know whether you’re able to attend, whether you’re able to bring a friend, and what topping you’d like.  The club is paying for pizza – non-financial members can look guilty while they munch .

This year our speaking is going to run in a six-weekly cycle:

  1. Week 1:  Fun activity, little preparation involved.  These would be good nights to bring people along to introduce them to Rostrum a bit – although any night’s a good night for a guest.
  2. Week 2:  Themed Speech Topics
  3. Week 3:  Alphabet Soup topics (e.g. ‘Eggnog, Excellent, & Egalitarian’ – no that isn’t one of them).
  4. Week 4:  Themed Speech Topics
  5. Week 5:  Training Night!
  6. Week 6:  PDP Speeches for All

And then back to week 1.

Please RSVP.  Your  Speaking Year – and Pizza – awaits.  All guests welcome – see the flyer attached.

Thanks:  Micheal Axelsen

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The second of three types of ambiguity: actual ambiguity

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Actual ambiguity refers to ambiguity that occurs in the act of speaking.  It arises when a word or phrase, without variation either in itself or in the way the word is put forward, has different meanings.  The statement does not contain adequate information to resolve the ambiguity, resulting in a number of legitimate interpretations.  Two distinct types of ambiguity are categorised as actual ambiguity:  pragmatic and extraneous. 

Pragmatic Ambiguity

Pragmatic ambiguity arises when the statement is not specific, and the context does not provide the information needed to clarify the statement.  Information is missing, and must be inferred.  An example of pragmatic ambiguity is the story of King Croesus and the Oracle of Delphi (adapted from Copi and Cohen 1990):

"King Croesus consulted the Oracle of Delphi before warring with Cyrus of Persia.  The Oracle replied that, "If Croesus went to war with Cyrus, he would destroy a mighty kingdom".  Delighted, Croesus attacked Persia, and Croesus’ army and kingdom were crushed.  Croesus complained bitterly to the Oracle’s priests, who replied that the Oracle had been entirely right.  By going to war with Persia, Croesus had destroyed a mighty kingdom – his own."

Pragmatic ambiguity arises when the statement is not specific, and the context does not provide the information needed to clarify the statement (Walton 1996).  The information necessary to clearly understand the message is omitted.  Due to the need to infer the missing information, pragmatically ambiguous statements have multiple possible interpretations (Walton 1996).  Croesus interpreted the Oracle’s statement as indicating his success in battle – the response he desired.  As noted by Hamblin (1970), Croesus’ logical response to the oracular reply would have been to immediately ask the Oracle, "Which kingdom?"  Further information is needed to resolve pragmatic ambiguity. 

In the case of an information request, pragmatic ambiguity exists in the request for "A report of all the clients for a department."  The ambiguity is that the request does not refer to a specific department.  The end user could legitimately prepare a report for any department.  Further information is needed to resolve this actual ambiguity in this case.

Extraneous Ambiguity

In contrast to pragmatic ambiguity, in which information necessary to clearly understand the message is omitted, extraneous ambiguity arises from an excess of information.  Clearer communication arises where the minimally sufficient words needed to convey the message of the statement are used (Fowler and Aaron 1998).  Where more words are used than necessary, or where unnecessary detail is provided in the communication that is not part of the message, ambiguity arises.  The excess detail obscures the essential message and contributes to different emphases or interpretations.

The use of passive voice, vacuous words, or the repetition of phrases with the same meaning all contribute to lack of clarity (Fowler and Aaron 1998).  The use of clichés and the over-use of figures of speech add volume to the statement, but add little or no meaning.  Pretentious and indirect writing also adds to the bulk of the statement, but without adding meaning.  Fowler and Aaron (1998) provide the following comparative example:

  • Pretentious:    To perpetuate our endeavour of providing funds for our elderly citizens as we do at the present moment, we will face the exigency of enhanced contributions from all our citizens.
  • Revised:    We cannot continue to fund Social Security and Medicare for the elderly unless we raise taxes. 

The extra volume contributes to vagueness in the first statement, and adds to the multiplicity of legitimate interpretations of the statement.  The first statement exhibits extraneous ambiguity.  The second statement communicates forcefully and concisely. 

An example of extraneous ambiguity in an information request is "A report of all clients (and their names and addresses only) for the Tax and Business Services department.  Some of those clients are our biggest earners, you know".  The last sentence is extraneous, and contains detail that is redundant, uninformative, or misleading relative to the fundamental message.  In information theoretic terms, extraneous ambiguity is "noise" in the communication (Axley 1984; Eisenberg and Phillips 1991; Severin and Tankard 1997). 

Image from Flickr User tsmyther.  Some Rights Reserved.

The nature of ambiguity

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The following is an excerpt from my thesis, written in 2000. 

Ambiguity is an inherent property of all natural languages, including English (Jespersen 1922; Williamson 1994). Absolute precision of a language is pragmatically undesirable, because the language is unable to adapt to new concepts (Williamson 1994). The communication needed to ensure effective and efficient report production, however, requires complete clarity. Hence, a tension exists between the natural language’s need for flexibility in the long term and the need for precision in the short term. Natural language is at once both dysfunctional and poorly adapted to the functions language needs to perform, yet flexible and broad-based such that it is useable in practice (Chomsky 1990).

Interest in linguistic ambiguity has an extensive history, and has been recognised as a separate branch of study since at least Aristotle’s time (Kooij 1971). Aristotle noted that language must be ambiguous, as a language has limited words but an infinite number of things and concepts to which those words must apply (Kooij 1971).

Russell (1923) recognised that all natural languages are vague and ambiguous. Excluding the realm of mathematical symbolism, constructing completely unambiguous expressions is not possible with the syntax and vocabulary tools available within natural languages (Williamson 1994). To endure and survive, language requires the flexibility to communicate new concepts. Ambiguity necessarily derives from the flexibility of natural language.

Kooij (1971) states that ambiguity arises where a sentence can be interpreted in more than one way. Similarly, Walton (1996) considers a sentence or statement to be more ambiguous as the number of legitimate interpretations of the sentence (or paragraph) increase. Ambiguity implies multiplicity of meaning (Walton 1996).

In classical analysis, the multiplex (Latin for “multiple meaning”) categorisation of Alexander of Aphrodisius (Hamblin 1970) suggests a basis for the identification of categories of ambiguity. In classical literature, Alexander of Aphrodisius identified three categories of ambiguity: potential, actual, and imaginary. Walton (1996) adapts this classical multiplex categorisation to his identified types of ambiguity.

Walton (1996) identifies six classical types of ambiguity in natural language: lexical, syntactical, inflective, pragmatic, emphatic, and suggestive. In addition to Walton’s (1996) taxonomy, extraneous information and noise in the communication can also be a source of ambiguity. Extraneous ambiguity arises where the communication is not parsimonious, or the communication includes information that is not directly relevant to the message being communicated (Fowler and Aaron 1998). Extraneous ambiguity is an actual ambiguity within the Walton (1996) taxonomy.

Each ambiguity type can be independently present within the communication. Walton’s (1996) modified taxonomy and model of ambiguity is presented in Figure 1.

Figure 1
Types of Ambiguity (adapted from Walton 1996)

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An introduction to the Carbon Emissions Reporting regime in Australia

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This is a blog post from a CPA Australia Carbon Emissions Reporting Discussion Group meeting – the inaugural meeting – that I attended on 18th November 2008.  Danny Power from PwC is the convenor. 

There will be an election of office-bearers at the end of the next meeting.  The topics under discussion are going to be quite broad-ranging.  Danny is linking it to the sustainability reporting issues, and Danny seems to think the label might change later.  However, Carbon Emissions Reporting is the current label for the group – thinks we might need to break into several discussion groups at some point (I’m not sure about that – see how popular it is).  There were about 40 people in attendance at this first meeting, though, which is always a good sign. 

Why did Danny set up the discussion group?

  • Compliance issues
  • The accountant’s role as a business advisor and in managing the reporting systems
  • Impacts for all organisations whether direct or indirect
  • “The Science” – still seems controversial, and if you’re going to report on it you need a working knowledge of what the processes are and how it works. 
  • Possibly the most important – to create a support and peer group for each other.

Schemes, coverage, compliance and impacts

This section of the presentation was given by Mick Zeljko of the Climate Change Team of PricewaterhouseCoopers. 

The finance function of most companies will be generally involved it seems in managing the reporting process, which is a substantial – very substantial – part of the new CPRS. 
Emissions Schemes

Current programs:

  • Mandatory Renewable Energy Target (MRET)
  • NSW Greenhouse Gas Abatement Scheme (GGAS)
  • Qld Gas Electricity Scheme (GECS)
  • Greenhouse Challenge Plus
  • Energy Efficiency Opportunities

The scope of these current programs is fairly limited and tend to be industry-specific.  There is a general feeling that perhaps people have been a little bit lax about the current programs, and it’s been pretty relaxed with the result that there has not been a lot of accuracy in the numbers that are currently being reported.  Probably a lot of companies don’t really have a lot of confidence in their reporting schemes. 

New Schemes:

  • National Greenhouse and Energy Reporting System (NGERS)
  • Carbon Pollution Reduction Scheme (CPRS)

NGERS will cover a lot less companies than those that are affected by ETS.  Types of gasses – six Kyoto gasses – CO2 and Methane and so on.  All measured in terms of CO2 equivalency – for example, methane is 20 times stronger than CO2, so 1 tonne of emitted methane is 20 CO2 Tonne Equivalents.

The NGERS does get down to 200 terajoules and 50 kilotonnes in 2010.  ETS will require only 25KT in 2010 so it is a little disconnected from NGERS – you can probably expect that the two programs will come into alignment. 

The Emission Trading Scheme (ETS) is now officially called CPRS – Carbon Pollution Reduction Scheme.  The feeling is that it sounds better to be reducing carbon pollution than trading the rights to emit pollution.  The scheme generally caps Australia’s emissions, and then identifies industries subject to the cap.  These industries are then allocated permits and at the end of the year have to have permits to cover what they emitted or pay a substantive fine.  If you don’t have the permits, you have to go buy them from someone who does.  This is the essence of the ‘cap and trade’ system.  

Under the scheme:

  • Government allocates or auctions permits up to the cap annually.
  • Companies compete on the market to acquire required permits.
  • Permits can be traded at market prices between firms and third parties.
  • Scheme requires robust monitoring, reporting and assurance of data.
  • Transitional assistance measures are included
  • A number of elements are yet to be finalised
    • Including emissions target trajectories, penalties for non-compliance and complementary measures for non-covered sectors. 

A green paper was released in July.  Everyone affected is throwing a submission at the government.  The government is aiming to have draft legislation ready by the end of the year.  There remains a whole bunch of stuff that is yet to be finalised, particularly emissions trajectories.  We don’t know what the limits will be yet though – what the targets will be. 

Covered sectors:

  • Stationary energy
  • Industrial processes
  • Fugitive emissions (e.g. mining and landfill)
  • Waste
  • Transport
  • Reforestation (opt-in – gets you credits)
  • Agriculture may come in later, around 2015.

Liability generally relies upon the emitter.  Generally it is upstream supply liability.

Emissions covered include:  Scope 1 (i.e. direct for example emissions from a generator) emissions only.  Contrast with NGERS which includes Scope 2 (e.g. indirect such as a factory’s use of electricity) across all 6 Kyoto Greenhouses. 

Threshold

  • Direct emissions of 25,000 tonnes of CO2e (Carbon Equivalents). 

The affected businesses will need to be collecting up systems, processes and governance to get NGERS into place. 

I wonder what the definition of an entity (i.e. a ‘business’ will be in the covered industry?). 

The first NGERS reporting period has commenced, those these systems etc will need to be in place from the point of view of affected NGERS entities.  CPRS Green Paper submissions are now closed.  The draft legislation is due out in early September, and they seem to want to have the legislation in place by the end of the year.  The Government wants to set medium-term national trajectories soon, and are aiming for a 1 July 2010 start.  These trajectories will affect how many permits are available – they will not determine who is affected by CPRS. 
We in Australia will have two full reporting periods and  given thethen full trading will commence under CPRS.  Unless it doesn’t  current financial crisis. 

Under NGERS – compliance is about registering and reporting.  Penalties apply for corporations and CEOs.

Project Definition

There are a a whole lot of rules and legislation around wh`o effectively owns the emissions.  A big mining site will have a lot of issues just working out what are we reporting on.

Systems Implementation

  • Collect greenhouse and energy data
  • Calculate greenhouse and energy data – there is a measurement determination that tells you how you work out how much CO2 you emit.  There are proxy things in place. 
  • Got to have good storage of records for any audit down the track.

Maybe I have a large IT bent, but I can see that this is going to be a problem for anybody seeking to implement Greenhouse Gas Reporting Systems and implement it through the accounting information system.  Or even if they don’t. 

Clearly it will have an impact upon reporting processes, and who does it – and I suspect this job will often fall to the finance function. 

Reporting

  • Register with GEDO
  • Prepare and submit data using OSCAR.  (See Greenhouse Challenge Plus).
  • There will be a lot of internal reporting as well particularly for companies that are CPRS-liable. 

Governance

  • Need a whole lot of things covering all of this to make sure it keeps ticking along. 

Companies will have to be NGERS compliance at a minimum. 

Assurance – large emitters (>125KT CO2) will require third party assurance of the information prior to submission.  Beyond these core issues we don’t know much around how it is taxed and so on.  The draft legislation hasn’t come out yet.  There are thousands of submissions being put in place.

If you are liable there are serious financial implications and also some compliance costs.  Indirect impacts will result in price increases it seems – which will be the main issue for SME’s. 
Indirect impacts are going to be increasing on just about everyone.  Transport and logistics – may see a complete change in the competitive position between transport for example.  For instance you will need to reconsider where you get your services from e.g. road vs rail.

Need to do a risk assessment now.  Carbon due diligence.  Green paper submissions were a big thing a little while ago.

Strategic Response – can do a lot of stuff now.  There are opportunities for new services and products – carbon market planning and financial advice.

CPRS Accounting Issues:

  • Permits acquired to satisfy obligation = intangibles
  • Permits acquired for trading = inventory
  • Measurement choices available
  • Impact of CPRS on impairment calculations
  • Accounting disclosures which may be required.
  • How to account for forward purchase agreements of carbon pollution permits
  • Broadly – what impact will the acquisition, trading, hedging and surrender of carbon plollution permits on reporting.
  • Tax treatment?  Still yet to be decided. 

We also noted in the presentation that cashflow issues exist potentially for people that have to buy permits up front. 

There will be another meeting in February, probably, of the Discussion Group.  It was a very interesting discussion and it will be interesting to see where these compliance issues around the Carbon Emission Emissions Reporting processes take us.  And as we can see above – there are assurance implications (although supposedly only for >125KT emitters?).

More notices as events warrant.