According to a report in the FT, the FSA is holding talks with top auditors to "try to ensure banks are not destabilised by accountants making a qualified judgement in annual accounts on their capacity to continue as a going concern".
So what is an honest accountant to do if he spots a big hole in a bank’s accounts? Pretend that it’s not there and be sued 2 months later by the bank’s shareholders when it goes to the wall?
It looks as though the FSA, having failed to supervise the banks, is trying to get the auditors to ignore the problems that the FSA has already overlooked.
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