Negligence & Liability Archives - Page 3 of 5 - Emile Woolf writes

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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Time to call the European Commission to Account

The subject of Europe polarises any otherwise rational debate. Obsessional prejudice, whether pro or con, induces deafness and drives out reason. More inflammatory even than party politics (where spin and expediency have blunted the ideals), passions over Europe (the Union, not the continent) have taken on the trappings of a belief system, susceptible to neither […]

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Enhancing banks’ accounting regulation: and about time!

Regulation of the UK financial services industry is now entrusted to a new body with a new name and a new boss. Andrew Bailey, whose signature appears on your banknotes, takes over this month as chief executive of the Prudential Regulation Authority, successor to the FSA. Initial impressions augur well. In his first post-appointment interview […]

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Audit quality: is lack of competition the problem?

Twelve years ago, when their audit of Enron’s last accounts heralded the demise of Arthur Andersen, the largest end of the audit market shrank to four firms. The Competition Commission (CC) has now provisionally concluded that the audit market is restricted: companies are inhibited from switching auditors and there is a tendency for auditors to […]

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Accountancy’s role in maintaining the cycle of deception

“If it ain’t broke, don’t fix it”, the old cliché tells us. But what if it  really is broke? You can alleviate the symptoms but you can’t cure the disease while the root-cause remains. On the economic front, cries for stimulus and growth will remain forlorn while the dearth of credit persists, and monetary systems […]

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Audit Scope: common sense beats rules, every time

The argument about auditors’ contribution to the 2008 debt crisis is still unresolved, and it will remain so until the central question of audit scope is addressed. The traditional perception that auditing has an historic focus merely entrenches its uselessness in the face of a radically altered commercial environment and risk levels that demand a […]

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Inflated asset values, suppressed liabilities – it comes to the same thing

I see from April’s Accountancy that Goldman Sachs and Morgan Stanley have decided to switch from mark-to-market to historic cost accounting for their loan portfolios. Goldman’s stated purpose is to protect its loan book from swings in value. From memory, they didn’t seem to mind when the swing was upward – even though the market […]

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Clear? Coherent? Transparent? Intelligible? How would you describe our reporting standards?

UK accounting standards are celebrating their 40th birthday: Statement of Standard Accounting Practice No.1 on associated companies was issued in 1971. The initiative was given a boost in 1973 following exposure of Robert Maxwell’s deceits at Pergamon Press. In a hotly contested takeover battle Pergamon’s share price was supported by accounts that included a wildly […]

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