Silencing the Noise by Moerman - Essay Example

The paper "Silencing the Noise by Moerman" is a delightful example of an essay on finance and accounting. The failure to have internationally standardized accounting standards has allowed many organizations to exploit the accounting malleability loopholes, to avoid their legal and financial obligations related to asbestos manufacturing (Moerman and van der Laan, 2). Accounting inadequacies for the long-tail liabilities arising from the toxic asbestos operations have been found to have been noted in the USA, the UK and now in Australia, sending a message that there is still an increased danger of toxic exposure that needs to be addressed. The fact that asbestos gradually causes intoxication in the human body and can thus take several decades before the intoxication finally resurfaces has given the multinational organizations an opportunity to engage in manufacturing opportunities that uses asbestos, and then avoid the legal liability that comes with it (Moerman and van der Laan, 7). Inter-jurisdictional transfers of corporate entities has made it possible for such corporate entities to avoid their responsibilities in the past asbestos exposure claims, while at the same time allowing for tax inefficiencies through the repatriation of profits made in one jurisdiction to another jurisdiction where the corporate entity is newly re-established (Moerman and van der Laan, 3). It is this practice that has made accounting for the asbestos long-tail liability claims very complex.

Viewpoint
Accounting for asbestos legal claims is complex, owing to the fact that the resurfacing of the asbestos side effects takes long, for example, a few decades, making it very hard for the organizations responsible to pay for such liability claims. This is because, the organizations are reorganizing and changing jurisdictions of their initial incorporation, such that the future claims that resurface will not be associated with such organizations. In this respect, there is a need to harmonize the inter-jurisdictional taxation and incorporation systems for organizations, so that such organizations cannot be able to change their jurisdictions of incorporation easily. This will make it difficult for such organizations to avoid their long-tail liabilities.