Is this the start of UK Auditors getting caught?

The top bods in the top four UK Accountancy Practices appeared in front of the Lord's this week to answer questions about the role that Auditors had to play in the reporting on banks financial stability.....

Accountancy Age, November 23, 2010: Debate focused on the use of “going concern” guidance, issued by auditors if they believe a company will survive the next year. Auditors said they did not change their going concern guidance because they were told the government would bail out the banks.

“Going concern [means] that a business can pay its debts as they fall due. You meant something thing quite different, you meant that the government would dip into its pockets and give the company money and then it can pay it debts and you gave an unqualified report on that basis,” Lipsey said.

Lord Lawson said there was a “threat to solvency” for UK banks which was not reflected in the auditors’ reports.

“I find that absolutely astonishing, absolutely astonishing. It seems to me that you are saying that you noticed they were on very thin ice but you were completely relaxed about it because you knew there would be support, in other words, the taxpayer would support them,” he said.

 

I am astonished as well that they appear to be so relaxed about the whole thing. The ONLY reason that auditors exist is to ensure that the directors of a business have behaved responsibly, in line with the wishes and good will of shareholders and that the accounts reflect a true and fair result. Why Auditing firms have not gone down I have no idea. We may all want to chase the devil bankers who have been paid so many bonus' but they will argue that they earned those bonus' good and proper in accordance with the rules that the banks set. The role of the Auditors is surely to then check that this is right? 

In fact the bankers were paid massive bonus', based on short term profits from long term debt ridden liabilities that the tax payer has had to pick up. The Auditors missed this - I mean MISSED THIS. How can that be? What on earth are they auditing or is it just that they spend too long ensuring that the numbers have been transactionally added up, without standing back and wondering what the number mean.

As for 'Going Concern' - it's ludicrous. The whole financial sector, including responsibilities of audit firms needs a massive overhaul. Stop paying the big bonus' and get them all back to work properly.

 

Posted via email from steve rushton