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28 Apr 2010
The European Union’s finance chief has raised the possibility of a pan-Europe audit watchdog, promising to issue a paper on the subject by Autumn.
Michel Barnier, EU internal market commissioner, said it was the "right time " to launch a debate in Europe on audit, following the financial crisis, Reuters reports.
He also cited the damaging Valukas report into the collapse of Lehman Brothers, which accused the US bank’s auditors Ernst & Young of being “professionally negligent”.
E&Y refutes the claims and had defended its audit.
Barnier referred to "questions recently raised in the context of the audit of the accounts of the American bank Lehman Brothers."
Barnier said global audit firms had global structures but not global regulation.
"While the large audit firms have centralised their management and decision-making structures at European level, their supervision continues to be done on a national basis," Barnier said.
"It is time to launch the debate and work towards the reinforcement of the supervision of audit firms at European level."
Read the full story:EU executive says auditors need wider scrutiny
Further reading: Europe's IASB concerns voiced at global meeting
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Audit Reglation
The EU Finance Chief should concentrate on ensuring that the EU accounts pass muster with the auditors
Posted by: W L L Lambeth, 28 Apr 2010 | 00:00
Don't look at auditors in retrospect
Hey all,
I work in the industry and think it?s important to note that the auditors operated under existing rules and GAAP (Generally Accepted Accounting Principles).
According to Compliance Week, ?companies were still following Financial Accounting Standard No. 140, Accounting for Transfers and Servicing of Financial Assets, to decide when an asset transfer qualified as a sale (that could be kept off the balance sheet) or when it had to be treated as a financing (that remained on)?.That rule has since been codified into the Accounting Standards Codification under ASC 860-10.?
Posted by: Jack, 04 May 2010 | 00:00