Speaking on the first day of a High Court trial in which KPMG is seeking to prove that Barings’ auditors were to blame for the bank’s collapse, Charles Aldous QC said: ‘If these basic audit failings had not happened Barings would still be here.’
Former auditors, Coopers & Lybrand, Coopers Singapore (both now part of PricewaterhouseCoopers) and Deloitte Singapore, maintain Barings’ collapse was due to management failure.
‘Not once between 1992 and 1994 did the auditors report anything,’ Aldous said. ‘Coopers were well aware of the importance attached to the reports. The failings of the auditors were elementary.’
Singapore auditors did not escape criticism. ‘By the time of Barings’ collapse its accounts had been audited on four occasions, unconditionally, as true and fair.’
The trial is expected to last 30 weeks, but a settlement between PwC and Barings’ creditors has not been ruled out. A High Court ruling means creditors must put up Pounds 19.5m in security costs by Christmas or the trial will be halted.
Coopers was auditor to the Barings group until the bank’s collapse and in 1994 audited subsidiary BFS. Deloittes audited Barings Futures Singapore between 1992 and 1993 and is resisting anything but a nominal settlement.
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