Recently, I had a discussion with a well-known writer on geopolitics. In my reply to his article, I compared (European) Brexit with (American) Calexit. He sent me a detailed lengthy response on the (many) differences in the various constitutions, laws and regulations. I sent a short reply that – being an auditor – I believe in “substance over form”.
Many governments claim that they have a separation in powers (ie, the trias politica concept). This separation of powers is, however, meaningless when (i) the national parliament is a mere rubber stamp, and (ii) the legal system has government approved appointees. Formally, there might be a separation of powers but in practice it does not exist.
My belief in substance over form stems from the audit profession. Wiki: “Substance over form is an accounting principle used “to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events”. Note LO: italic markings in quote are mine.
Certain companies, like certain governments, have a habit of not presenting a “true and fair view” about their affairs. Basically, there are 2 common ways to do that: (1) by omitting relevant information (incomplete or late), and (2) by falsifying information (incorrect). The first method is usually the smart one; the second is usually the dumb one.
Classic examples within companies of “form over substance” are:
- off balance sheet treatment of leases which economically qualify as on-balance;
- no consolidated financial statements despite share capital participation(s) of >20%.
Classic examples within governments of “form over substance” are:
- parliaments that gather once a year;
- firing of independent judges and replacing them with government approved judges.
Despite the many formal differences between Brexit and Calexit, there are substantial similarities: (i) an entity that aims to leave a group, (ii) a similar foreign entity sowing chaos in both groups for its own beneficial purposes, (iii) bypassing elected parliament through a people’s vote, and (iv) irregularities in the process governing the people’s vote.
There is a forensic phrase that aligns with the “substance over form” approach: follow the money. By definition, money equals substance and transcends forms.
My Truly, Truly Fair (1951) by Guy Mitchell
artist, lyrics, video, Wiki-1, Wiki-2
Note: all markings (bold, italic, underlining) by LO unless stated otherwise
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