Credit Crisis Archives - Page 4 of 10 - Emile Woolf writes

Perplexing times for economists and accountants

The world of economics and business is riddled with anomalies. For example, the UK is enjoying buoyant GDP growth and low unemployment, yet the excess of government spending over income (the “deficit”) continues to grow. Despite so-called “cuts”, 46% of GDP still goes on public expenditure, of which 60% doggedly adheres to welfare, health and […]

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Big Audits: are they fit for purpose?

Over the past 30 years the 12 largest firms, through various consolidating moves, became the Big-8, then the Big-5 and, following the Enron/Andersen debacle 14 years ago, settled down as the “Big-4” who alone possess the reach, technical capability and manpower to conduct audits of the worlds largest enterprises. Although second-tier contenders like BDO and […]

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Banks: prudence and sanity return?

Banks’ auditors have had to deal with the absurdity of accounts failing the ‘true & fair’ test for the very reason that they comply with a flawed standard. Auditors accused of rubber-stamping defective accounts of banks should now feel some relief. The International Accounting Standards Board appears at last to acknowledge the folly of its […]

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Auditing the auditors: some improvement. But what of the economy?

The audit failures I have been highlighting so regularly are given full exposure in the Financial Reporting Council’s latest report on big-firm audit quality in the UK. Adverse findings relate to the usual suspects: goodwill impairment, revenue recognition, IT controls and loan loss provisions. Although quality (or lack of it) varies between the four top […]

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You can print money, but not direct its course

Legal claims against top Wall Street banks arising out of the financial crisis have, so far, settled at over $100 billion, and no doubt there will be more. Claims against audit firms for their involvement will surely follow, and it will be interesting to see how far IFRS-compliance will serve as the defence of choice.  […]

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Sloppy auditing has its consequences – just look around you

My repeated warnings to auditors that compliance with IFRS does not guarantee accounting truth and fairness appear to have struck a resounding chord in high places: the House of Lords, to be precise, where the Parliamentary Commission on Banking Standards debated the Bill on banking reform, now enacted by Royal Assent. In Hansard for 23 […]

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Correspondence with Patrick Baron on the role of money & wealth transfers

From Pat Baron: “Emile, Even Germany is not immune to the predations of the euro.  I keep pointing out that German exporters benefit from euro credit expansion, but at the expense of all other Germans.  This is one reason that Germany is reluctant to put an end to the euro mess…the exporters and their constituents, workers, […]

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Auditors, wasted loans, currency wars… and gold

I noted last month that the record of auditors’ ability to assess the worth of banks’ loan portfolios is singularly uninspiring. In the US the Securities and Exchange Commission is actively pursuing auditors who issued clean opinions after accepting management’s assurances of worth, followed by massive bailouts. Yet any meaningful audit is impossible when supposed […]

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Emile replies to his daughter, Gabi Maddocks

On 20 Dec 2013, at 08:52, Gabi Maddocks wrote: Hi dad – I think you might be interested in this.Xx Check out this video on YouTube. Sent from my iPhone: “The facts are not surprising. The US Government has been printing money out of thin air at the rate of $85 Billion per month for […]

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Auditing banks’ toxic debts

AUDITING BANKS’ TOXIC DEBTS Ever since the financial markets registered their massive tumble in 2008, when Lehman Brothers was left to drown in its swamp of toxic debts, banks’ managements, regulators, rating agencies and auditors have been muttering that banks must rebuild their balance sheets in line with successive Basel capital adequacy criteria. Their auditors, […]

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