From The Same Crop

Yes, auditors are human. What other answers are there?

The trainees are currently at college studying for exams. We can wear what we wish and take leisurely one hour lunches in the park. At first glance, we just look like a group of unemployed students. The bulk comes from regular universities: Manchester, Nottingham, Bristol, Warwick and Durham. We support the same football teams, listen to the same music and talk about the same things. Our mundane aim is to lead secure, quiet lives with a stable income – all the same as everyone else.

A Breed Apart

But look more carefully at the unemployed students you will notice some differences: the designer sunglasses (Ray Bans inevitably), the insatiable appetite and ability to pay for daily Starbucks Lattes, the intellectual conversations about the merits of taking two calculators to exams. It is not the same.

So, auditors are human, but of a distinct kind. To explain, all dogs are dogs, but only some are Border Collies (who incidentally rank number 1 in Coren’s Intelligence of Dogs).

These characteristics set apart auditors:

1) Devastating Scrabble Players
Auditors are clever. I said earlier that they came from ordinary universities. But the true meaning of that is they come from good families, came the top of good schools, scored a 2:1 degree from a good university, passed the psychometric testing and beat other good graduates. How can this not be scrabble playing elite?

2) Tidy Bedrooms
Auditors are organised. This gives them the foresight to apply for a graduate job before actually graduating. It also gives them the ability to manage work, exams, social lives and lip reading classes without the need of a time machine.

3) Keen Runners
Auditors are hard working. The industry has a reputation for long hours. This attracts auditors to the discipline, grind, pain and sheer satisfaction of running. On the basis of the regular emails requesting sponsorship for some run, each auditor runs 3.7 marathons per year.

4) Safe With Your PIN Number
Auditors are reliable and accountable. In the face of all adversity and danger, the audit work will always be complete.

The Change

I have described the model of professionalism, but I am not close to that. Everyone still makes mistakes and still learns, even the partners. However, that process of change from student to professional is most stark among the trainees. I’ve gained a lot of knowledge and experience in my two years so far. My expectations have changed – Pizza Express has turned from a treat to a chore. Yet, a lot of trainees still hold their student-dreams of travelling, pursuing their real passions and making a difference to society. Change is natural with or without a job, but working for a professional services firm makes it much faster.

So in just one article I say that auditors are like everyone else, but are an elite, and the trainees are transitioning from studenthood to the elite. It’s a flaky, unsatisfying conclusion. But (in a pretentious and noble-sounding way), that is life.

There are 286,000 qualified accountants and 169,000 accountancy students in the UK (source: FRC). That means you can’t avoid them for your whole life. This blog post will explain where accountants come from and what motivates them.

The Defensive Play

It was once believed that accountants were delivered by storks while sucking their thumb and clutching a calculator. Modern biology proved that accountancy is not a natural career choice. Show me a child who aspires to be an accountant and I will show you the telephone number of a good therapist.

Accountants are actually produced from the “Big 4” accountancy factory (the four largest firms who dominate the industry). Fresh university graduates are the raw materials and they take three years to process. They are lured through the gates because the training contract offers:

• Stable employment
• A free chartered accountancy qualification (the “ACA”). Qualification means a large pay rise and near-guaranteed job security for life.
• Good work experience with exposure to many different aspects of a business

For these reasons, accountancy is a defensive play for 90% of trainees. It is a safe option for the graduate who is unsure about their long terms career goals. By simply doing as you are told for three years you will end up with valuable work experience and qualifications. No thought is required and the long-term serious career decisions are deferred.

It is a safe and pragmatic career choice. But that’s the way accountants should be.

The Machiavellian View

The cynical view is that trainees are entirely self-serving and leave as soon as the training contract ends, having conned the ACA from their employers.

However, this Machiavellian view is acceptable to the Big 4 because they easily extract enough value from their trainees. They perform a great bulk of the fieldwork at the client.  Even though the ACA is a great expense the cost is recovered many times over. A trainee is charged out at over £100 for every hour that he works at the client. A trainees will earn around £350,000 in profit for the firm during their contract period.

A lot of trainees do leave after qualification but the business model is not designed for all of them to stay. Otherwise, there would be too many assistant managers.

However, the three years are not just a relationship of convenience. The firms do want you to stay after qualification even if it is not as an accountant. They will make efforts to find placements elsewhere. Possible destinations include other business areas of the firm, such as advisory, placements at the client and placements abroad.

Trainees are not solely treated as a resource but as valued members. This is why the Big 4 do well in employee satisfaction surveys.

The Meaning of Audit

Accountancy is a good career – but why do any work at all? Accountants do have dreams of lying on a beach for half the year and skiing for the other half. But that would be a waste of immense talent. Also, modern civilisation would collapse if there was no-one to audit the accounts.

We agree that work is necessary. On the basic level, we need to earn money for food and shelter from bandits. However, should we expect fulfilment and satisfaction from our work, or is it just a means to an end?

Inevitably, accountancy is just a 9 to 5 job for a lot of people. I have joined in the bitching and moaning sessions while at work. But I have also met those who do enjoy auditing. It is more satisfying to work with them. They get the unpopular label of being “keen”, but it is the geeks who do well at school, not the jocks.

My Story

I wanted to become a chartered accountant after doing some work experience while I was in school. I did the usual amount of photocopying and filing. But I spent the bulk of the summer making over 100 archive boxes to store old files. This proved to be valuable experience because I won the first year trainee box making challenge. I was impressed by the importance of my bosses work and the respect that he got from his clients.

During university, I did some summer work in a chemical factory. I spent many 8 hour shifts lining up plastic bottles and stacking them on pallets. I vowed never to do any more menial work and to go for a challenging career. That’s why I am an accountant.

I didn’t know about the dire days I would have counting things on pallets and sifting through endless invoices. But I like the people and the work can be interesting. It’s pleasing to understand and apply a complicated accounting standard while at work. So like most people, I fall between the pragmatists and idealists on the purpose of work. Like most trainees, I’m still deferring the decision on what I will do after I qualify. But I will enjoy the time in between.

Work isn’t meant to fulfil your Ultimate Life Purpose™. It isn’t your whole identity. But it is OK to have fun auditing.

I am going to give an insight into what the trainee auditor’s life tastes like.

The Main Doughnut Sections

Busy Season
Half of the year’s audit work will be concentrated into these three months. Annoyingly, it is also the darkest and wettest time of the year.

College and Exams
Exams are a horrid burden and will ruin a lot of weekends for three years. However, college is a nice break from work. It’s a good chance to catch up with the other trainees who you otherwise wouldn’t see.

Holiday
25 days is the standard number of holiday time. You don’t have to take it during the summer and Christmas, but you can’t take any during busy season and college time is immovable.

The most interesting doughnut finding is that trainees don’t actually work that much when you add college and holiday time. For that reason trainee auditors don’t get paid as much as bankers or lawyers, but the trade-off is fair.

The September Milestone

Accountancy firms are the largest recruiters of graduates, therefore, the audit year follows the academic year because most join in September. The new first years do bring a feeling of renewal. The new joiners’ event celebrates their entry by subjecting them to the ritual humiliation of karaoke. They made me remember when I joined just 12 months previously. I realised how far I had come in that time (and how much stationery I had wasted).

September is also promotion and pay rise season. This is celebrated by the awarding of medals and the consumption of doughnuts.

Social Events

Large social committee budgets and mandatory contributions means that there are lots of social events throughout the year.

Alcohol
The highlight is the Christmas party, which is ridiculously messy but will give you lots to talk about until next year. There are regular pub meetings, which are mainly caused by a high turnover of staff leading to lots of leaving drinks.

Strangely, there are no regular pre-weekend Friday drinks because auditors are scattered throughout different client sites and are not based in a common location. The other (implausible) explanation is that I’m not being invited.

Corporate Social Responsibility Day
This is where the department take a day out of work to help the community. In my first year, we painted an old persons home. Other departments have gardened, cleared rubbish and done volunteer auditing for the needy.

Department Away Day
The department stops auditing and does something fun for a day. This may include sailing, horse racing and hunting bandits

Inter-Department Sports Events
The rivalries cover football, pub quizzes and netball. Accountants are competitive. The sight of partners dressed in fairy wings and pink leggings is pretty scary.

Looking Forward

Trainee auditors enjoy a varied (and tasty) life. If you are are having a bad week then there is always an event or a change in activity to look forward to. Fifteen exams is daunting when you start but time does pass crazily quickly. Busy season is hard but there are lots of fun times too. I look forward to qualification and the lifting of the exam burden. But the audit doughnut does become somewhat less interesting:

For this reason, audits take place after the end of the financial year. Transactions and events after the year end give information about conditions during the year. These are called post balance sheet events.

What I did afterwards

I needed a haircut two weeks ago. However, I avoided the immediate cost by waiting until after Lent and using a comb more often. I’ve just done a large online Tesco shop and replenished vital supplies of washing powder, cleaning products, peanut butter and pheasant. Adjusting for post balance sheet events, I should have a deficit of around £103.20+ (unaudited figure).

This week I most looked forward indulging my Starbucks coffee habit at will. I drunk many caffè lattes and re-identified myself with accounting trainee-literati. But I never used to buy coffee so regularly before Lent, so why should I change now?

I believe in corporate coffee. Photo by rudolf_schuba.

Final Thoughts

If I’m honest, the last six weeks have not been that challenging. The problem with Benefits in Lent was that it was always temporary. The fact that it was only 6 weeks made it easier because I could pre-buy and then defer purchases. If it was permanent, I would find it impossible.

I’ve learnt the importance of using what resources we have wisely, whether it is money, time or bandit-avoidance skills. Most of all I will remember Benefits in Lent for the awesome spreadsheets.

Credit

Most Britons have access to cheap credit. It’s useful for unexpected emergencies, such as car repairs or a broken economy. I used “notional credit” to cover my spending overruns but this was unrealistic because I wasn’t charged any interest.

In real life, the poor only have access to the most expensive forms of credit. For example, I found a website that offered a one-day £50 loan for a finance charge of £14.75 – giving an APR of 2222.46%. Crazy – but what alternative is there when things break and food runs out?

Savings

Low income means that there is no slack. Building wealth and safety buffers is not possible. In Britain, the top 10% of the population owns 53% of the wealth and the bottom 50% own 7%. The point is, nobody ever escaped poverty without saving.

Budgeting

The natural argument is that those on benefits should not live beyond their means. No-one disputes this, but that doesn’t explain why budgeting is often absent. I venture two reasons:

1) Poor financial education – Financial education in schools is currently not compulsory and its delivery is varying (source: FSA study). Financial habits are learnt at the home. However, what message do you learn when you see everything going on a credit card, or a quick loan company being used. Unfortunately, there’s evidence that the under-40s are less financially capable than their elders (source: FSA study). The bankers have highlighted the dangers of a lack of financial nous.

2) Societal expectations – Eating out used to be a rare treat. Now I’ve memorised the Pizza Express menu and eating out is one of my bigger expenses. Mobile phone are everywhere. Computers are considered essential. Everyone has a high definition TV (except me). It’s easy to say that the poor should do without these things. But we can’t live our expensive lifestyles and wonder why others don’t want the same.

Now we have a difference between income and expectations. Debt is the only way to fill the gap. Most of society is in debt – I’m in a negative wealth position if you count my student loan. However, the poor suffer more intensely from debt because of much higher interest rates.

Financial Services

Financial services, such as credit, have made our lives better by making it possible to withstand unexpected events. This is why I welcome the government’s decision to make bank accounts universal for all.

However, the poor are still disadvantaged. They live on the edge of a cliff with loan sharks waiting if they fail.

I have talked about how my existing possessions and working full-time makes living on benefits easier. However, I have not been able to substitute money for free time. I’m used to regularly eating out, convenience food, home delivery for groceries and a cleaner. None of that is possible without money.

Organising for Victory

Without money or time you have to organise beyond German efficiency levels to make things work. My life is run by my diary, to-do lists, revision plans, meal plans and New Year’s resolutions. However, being 100% efficient is not possible and leads to unhealthy psychological conditions. The need to buy time is one reason that I’m £7 over budget this week. I didn’t need to spend money on dishwasher tablets and a cleaner, but it saved me about 4 hours of time.

Everyone suffers time poverty and I don’t expect any sympathy. I have been questioning how I spend my resources. I can either:

• wring out every last useful second and use up every single pound to maximise enjoyment and achievement. Economists call this “utility-maximising behaviour”.
• leave gaps

Gaps such as the one where a pertinent conclusion to a blog post should go.

1. Cheating – by pre-buying lots of food. This was worth about £25 over three weeks.
2. Pre-existing assets – I already had a lot of food in my cupboard and freezer. However, I also already own a guitar, piano, books, TV and a laptop. I can enjoy my free time without needing to spend any more money.
3. Work – The benefits of work go beyond the monthly paycheque. Work saves money. That’s what I want to discuss in this blog post.

Benefits of Work

1) Time consuming – You spend money when you are bored. If you are at work for 10+ hours a day, you don’t spend much money at all. There is an exception if you internet shop or buy houses during your lunch break.

2) Free heat, light and shelter – Your office protects you from the threat of bandits.

3) Training – It’s in your employers interest to train you. However, you are the ultimate beneficiary of training. I’m currently training for the Chartered Accountancy qualification, the ACA. My employers pay for the training but I will enjoy the benefits for the rest of my career.

The training also extends to soft skills, such as teamwork and communication. Perhaps the most important one I have learnt is the art of small talk, especially how to feign interest in Desperate Housewives.

4) Future prospects – Work gives the idea that you have value. You have an incentive to invest in your C.V. There is the chance of doing different kinds of work throughout your lifetime that gives you satisfaction and income. I believe that is called a career.

5) Self esteem – Work gives you a sense of purpose and worth. But unemployment eats away at your self esteem and dignity. We can’t help but be defined by our work.

It’s easy for me to judge the long-term unemployed but I’ve never been in that situation. I heard a story about some long-term unemployed trying to get back into work but didn’t believe that they didn’t deserve a job.

I have been too religious about sticking to the £64.30 limit. It is a symptom of having an accountant’s mindset. It’s not just about the numbers, it’s about remembering the good things that I do have.

For the record, I am 2p under budget in week 3.

Essentially, I am still living a middle class lifestyle that is far beyond someone on benefits. A fair way to take account of it is the use of accruals accounting. In short, goods and services are accounted for as they are used instead of when they are paid for. For example, I bought three boxes of cereal before the challenge started. Under cash accounting, I can ignore this. Under accruals accounting, I have to account for the one box of cereal I ate during the week.

More information on accruals accounting can be found in paragraph 22 of the IFRS manual.

I’m going to adjust week 2’s budget under accruals accounting.

List of Adjustments

1. To account for the consumption of the existing food in my fridge and freezer. Including free food given by my parents
2. Benefits in Lents does not take account of Oyster card costs because they are assumed necessary for work, however, there’s no adjustment for non-work travel.
3. To account for use of existing household products, such as my bed, sofa and toothpaste.
4. Existing use of laptop and TV, assuming an estimated useful life of 3 years.
5. To account for free beer and sandwiches consumed at a work event.
6. To account for clothes worn, assuming a useful life of 2.5 years.
7. Existing use of guitar, piano and the reading of 3 chapters of book. Estimated useful life of 10 years. The book cost £2 and has a total of 14 chapters.

Notwithstanding the disturbing fact that this looks like a spreadsheet at work, I am now over budget by £22.77. This shows that I already have good wealth and income doesn’t matter so much. Those on benefits don’t have such wealth, and need to borrow at extortionate rates to fund a basic lifestyle.

No kimchi for me tonight.

1) Blue, black, red and green pens – The most standard of audit tools, since the staple work involves marking up of schedules, invoices and other paper-based evidence. A red tick against a particular number says clearly that:

• it agrees to the same number somewhere else in the accounts
• it agrees to some other firm evidence
• all is well in the accounting world

Auditors can demonstrate their creative side by using different coloured pens for different tick marks. The height of the auditors art is a multi-ticked and multi-coloured A3 Excel spreadsheet. However, the art is dying with the introduction of paper-less audit.

Before then, the debate rages between owners of single four-coloured pens and owners of four pens of different colour. The four-coloured pen is more useful, but it is more expensive and the auditor becomes impotent if it’s lost.

2) Second screen – Immensely useful. Second screens can be used to compare two documents, transfer information, or display different windows – like having email on one side and the internet on the other.

Unfortunately, carrying around a second screen on your back, in the tube on the way to a client is not practical. However, a second screen has other fringe benefits. Colleagues will wonder how you can use both eyes to focus on two separate screens (like a fighter pilot). It will make you appear 10% more intelligent and advanced.

3) Numpad – On average, an auditor will type out 1,456 numbers a day. Using the numbers at the top of the keyboard takes 0.4 seconds longer than using a numpad. That’s a potential saving of 9.7 minutes a day.

Auditors probably shouldn’t make up facts and numbers.

4) iPod – Music helps you audit, especially Taylor Swift.

5) Jedi powers – Fancy equipment makes not an auditor. It is his experience and knowledge that add the value. Good auditors work out where the adding error occurred without use of a calculator. They manipulate Excel spreadsheets by the keyboard alone. They instantly recall the most obscure of numbers from one page out of a thousand in a five year old audit file. They bring calm to the audit room. They are the Audit Jedi Masters.

Actually, someone on benefits should not be able to afford a £44 return train ticket. Yet, I’ve not spent a single penny on food. What is going on?

Pre-Paid Food

Yes, I cheated. I went on a large shopping trip on the Saturday before the start. I filled my freezer and bought three boxes of cereal:

Existing Food Stocks

I will take advantage of special offers. This means that I had built up a considerable stock of food – probably enough for a month. Benefits in Lent is a welcome opportunity for me to run down these stocks.

Work Lunch Allowance

I do get a lunch allowance from work. This does saves me spending money and time making sandwiches in the morning. At a conservative estimate, it gives me a £5 advantage.

The Spirit of Benefits in Lent

Benefits in Lent is not meant to be a perfect simulation. It does affect my behaviour enough to remember why I am doing this. My income is constrained and I can’t do whatever I want. Every time I pass Starbucks and want a coffee, I realise that I can’t afford it. It may seem petty that the only change in my daily life is not having coffee. But there will be harder choices to make. Because the three boxes of cereal won’t last forever.

The pastor at my church (crazy) Dan proposed something more radical – living on benefits for 6 weeks. In effect, giving up money. That means living on job seekers allowance, which for me is £63.40 a week. I’ll be starting on Sunday 21 February for 6 weeks, ending on Easter Sunday!

Why?

• Money for the poor in Greenwich – the money saved from living on benefits will go towards a poor council estate in Greenwich.
• Reflect on how fortunate we are – we are in the top 1% income bracket of the the world. We should feel like we have enough
• Deep religious reasons  – which I don’t know about – yet.

Ground rules

• Rent and council tax are excluded - because that would be paid for if you are on benefits. It would also wipe out my budget many times over.
• Travelcards for work is excluded – because you wouldn’t have need for a travelcard if you weren’t working.
• All other expenses are fair game – water, electricity, television, food, beer and widgets. All of them have to be covered by £63.40 a week.

Are we being annoying goody two-shoe Christians?

Absolutely not. However, I realise that there are criticisms and issues which I be discussing in future blog posts.

Track my progress

As an accountant, I’ll be maintaining an online spreadsheet of my budget and actual spending. Benefits in Lent Link.

I’ve estimated that I have to slash my weekly spend in half. I’ll be blogging about my experience. It’s going to be a struggle. But I will enjoy producing the spreadsheet, doing variance analysis and fancy pie charts.

Check in was smooth; Both flights arrived on time; The cabin was clean; I had decent enough legroom; And the plane didn’t suffer any loss of structural components. Rumours about a £1 charge to use the toilet were not true. Although there are plans to have passengers bring their own jet fuel.

Punctuality makes for good holidays but boring blog posts. Publishing bad news is preferable to good. But is it not better to celebrate the good rather than pull things down?

Complaints about Denmark

Amusingly, the Little Mermaid Statue in Copenhagen had been moved to Shanghai for the World Exhibition. However, I was convinced to go against the propaganda that it was worth seeing. I did not miss it.

In the end, the biggest disappointment was the terrible exchange rate, enough to turn Wagamamas from a cheap meal to a premium experience. Yes, I did travel hundreds of miles to a foreign culture to eat the same food. At least I refrained from my default choice of Chicken Katsu Curry. However, every other aspect was the same: the wooden benches, the menu, the chopsticks. The head waitress even sounded British. I might as well have been in London, except I was surrounded by a few Danes rather than hundreds of Canary Wharf yuppies. 

Ryanair, and Wagamamas, are actually quite good.

Picture the scene: You are at a party and meet someone new. You ask for their name, which is pointless because you forget it instantly. You move onto the next question: “Where do you work?”. Fortunately for you, the person is not unemployed but does say that they are an auditor.

Suddenly, you have no intelligent follow up questions, and are struggling not to make a joke about calculators. You force yourself a polite smile and comment that it is a “nice” job. However, you actually end up communicating that you think the other person is as interesting as beige. Talking stops and you both separate and get on with the rest of your lives.

This is where you need “insider questions”. Every profession has its own vocabulary, key concepts and idiosyncrasies. Learning a few key questions will make you sound intelligent and have great conversation. However, use insider questions sparingly before you are discovered to be a fraud. Do move the conversation on to mutually interesting topics, such as the weather.

The insider questions for auditors

1) Busy season – Auditors will do a great deal of their work from January to April, often without holiday. This is because audits are conducted after the end of the financial year. This is 31 December for most companies. Mentioning these two words to an auditor will either get them talking enthusiastically or crying endlessly – be prepared.

2) Exams – This is a classic question. Every auditor has gone / is going through exam trauma. Myriad questions can be asked: Which institute?; How many exams they have passed so far?; How many exams left?; How many attempts before getting fired?; Which calculator they use in an exam?

Be sure to mention that you couldn’t work and study full time and that they are making the noblest of sacrifices.

3) Longest hours worked – Every auditor will have their personal story of the nightmare client with the 100 hour week in a tiny conference room that smelled a bit. These are the scars of audit and are worn as badges of honour. Do ask an auditor about their worst job.

4) Funny audit room moments – Cramped conference rooms, long hours, stress and green pens have a strange effect on the auditor’s brain.

5) Cool clients – Not all clients are widget manufacturers. There are interesting audit clients. Just think, for every chocolate factory and theme park there is an auditor having fun.

Pens – the key to audit. Photo taken by atomicShed

Questions to be avoided

Certain questions will annoy the auditor. Use these with care:

1) Jokes about counting beans – This instantly shows your ignorance of what auditors actually do. Bean counters are actually “mere” bookkeepers. Audit is more interesting than that. We check that the annual bean report is correct in terms of number, size, type and weight. And only the larger beans are checked, the small beans are ignored.

2) Asking for confidential information – This is illegal. However, if the auditor acquiesces to you “well-intentioned” joke then immediately phone the Metropolitan Police on 0300 123 1212. Make sure you take a photograph and then run to the nearest safe house until the danger has passed.  

3) Mentioning the tax year – There is merit in knowing that the personal tax year runs until 05 April. However, this date is irrelevant to auditors because they are only concerned with companies. If you try to work this date into a conversation the auditor will start a long and uninteresting ramble on the meaninglessness of 05 April.

4) Posing maths questions – Friends have yelled a series of numbers at me and expected rapid mental arithmetic/calculus. This is a no-win situation for the auditor. Either we’ll get it correct and it is nothing special or get it wrong and look incompetent. Reality is that these days, auditors rely calculators and Excel spreadsheets, even mental calculations are double-checked using a calculator. 

5) Why audit? – Auditing is not a traditional childhood aspiration. This question might expose a graduate’s lack of imagination in choosing a career or a personal desire for a stable income. However, numbers are the great desire for some, but would that be admitted in public?

Do insider questions work?

Insider questions are useful. Last week, I tested out some over dinner with 11 junior doctors and a dentist. I asked questions about the hours and interesting/dangerous patients. After a while, I did try to move the conversation beyond work by asking about non-work activities.

This is important to avoid being exposed as a fraud. But more importantly, no-one really wants to talk so much about work. It’s a Western cultural quirk that the second question we ask is: “where do you work?”. We define ourselves by our work but it is not where our passions lie.

Sadly, the reply to the question was: “I don’t have any spare time”.

The insider questions idea is taken from “How to Talk to Anyone” by Leil Lowndes.

Lack of underground trains – The only part of the network which reaches the South East is the DLR. One solitary line is poor in comparison to North London. Although it is balanced out by the overland trains operated by South Eastern. However the second grievance is:

The inability to use pay-as-you-go Oyster Cards on said trains – The Oyster card is a great boon for Londoners. It allows for cheap and convenient travel on all forms of transport – except for trains in the South East. You either have to queue for a ticket or get a Travelcard (for unlimited use during the day / week / month). This is fine if you made a lot of journeys, but annoying for one-off trips.

The situation is more confusing for visitors and tourists. There are already enough lines, ticket types and zones without the added confusion of not being able to use your Oyster card on certain parts of the network. It an unnecessary hindrance and disincentive to those wanting to visit.

Oyster Redemption

However, on 04 January 2009 the Oyster Card situation was remedied. Pay-as-you-go is now available on South Eastern trains! The people would have rejoiced in the streets – except most had to return to work after Christmas and they would have slipped on the ice anyway.

A New Dilemma

There is a dilemma for those travellers who don’t commute every day. It is the choice between a using a pay-as-you-go Oyster or a Travelcard (£25.70 a week). If you want to save money by not buying a Travelcard, you have to spend less than £3.67 a day. However, there are situations where this may not be the case:

• Unplanned and unexpected journeys – making a few unplanned journeys in a week will wipe out the savings from using pay-as-you-go.
• Forgetting to touch out the Oyster Card – will cost you £4 straight away. You could phone up TfL to get a refund, but they are unsympathetic and assume that you were out to cheat the system.

All Londoners face the dilemma of capping their transport costs but forgoing a potential (but risky) gain. Interestingly, the very same kind of choice has been studied extensively in Economics, look up “risk premium” and “certainty equivalence”. In short, most people are risk adverse and will pay a premium to get rid of risk. In this case, that means getting a Travelcard.

Unintended Consequences

The station I use most for getting into central London is New Cross. It takes just 15 minutes and there are many trains per hour. An entirely un-noteworthy station, but to me it means that I’m not too far from home.

If you arrive late in the evening, you will see one of two men who stand outside the station who offer £1 to buy back your day Travelcard. The trade benefits all parties, except for TfL. However, the introduction of Oyster pay-as-you-go has removed any incentive to buy a one-day Travelcard.

Two men have been deprived of their livelihood. Is there not a moral duty for TfL / the government / society to compensate these men?

Photo of New Cross Station taken by chrisphin

Gone are the greens and pinks of the old site. They were from a different era. The new colour scheme of grey-on-grey reflects the recessionary days that we live in. A lot of the content has been updated:

• Articles – The longer writings
• Photos – I have a new camera, so expect some better photos in the future
• Activities – What I do with my time
• About – Who I am and where my background

What will I write about? I want to tap the under-represented market of London accountants.