FRC will ask E&Y about Lehman transactions

by Mario Christodoulou

More from this author

15 Mar 2010

  • Comments

The UK's reporting regulator said it will investigate the accounting treatment of Repo transactions which were at the centre of professional negligence claims directed at Big Four firm Ernst & Young and their audit of collapsed bank Lehman Brothers.

The Financial Reporting Council said it would ascertain the facts "on how the 'Repo' transactions were accounted for and audited in the UK in order to determine any implications".

The board said it would speak with Ernst & Young, who last Thursday were accused of professional negligence, and failing to challenge Lehman Brothers' use of repo transactions in the years before its collapse.

The firm said at the time it stood by its audit decision. Yesterday it said it would "cooperate fully with all relevant parties on this matter".

Repo transactions are used by banks to swap assets for short term cash. Lehman Brothers was accused of using the transactions and the accounting treatment to artificially distort their balance sheet.

FRC Statement on issues raised in report on Lehman Brothers

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Financial Planning and Performance AnalystCabinet Office-Greater London-Competitive

 
 
 
 
 
 
 
 

 

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.