Auditors highlighted 'significant deficiencies' at Refco
Propsectus to US Refco float shows auditor warned that finance function was not large anough, and that the company had no formal procedures for closing the books
Auditors warned investors in Refco of ‘significant deficiencies’ in the
company’s internal controls over its financial reporting, documents show.
The prospectus to the company’s stock exchange flotation two months ago
includes a warning from accountants Grant Thornton of two significant
deficiencies, ‘defined as a deficiency that results in more than a remote
likelihood that a mis-statement of the financial statements that is more than
inconsequential will not be prevented or detected,’ it says.
The first related to the size of Refco’s finance function, which was not
large enough to meet the demands of reporting to the SEC. The second related to
a lack of formal procedures for closing the books.