No need for EU regulators’ guidance on subprime turmoil

The EC’s Internal Markets Commissioner, Charlie McCreevy, said today that
there is no need for regulators in Europe to give new guidance on auditing
companies affected by the turmoil in the US subprime market.

McCreevy told journalists at a conference in Brussels that top auditing firms
are already in talks over how to address issues such as verifying the accuracy
of a company’s exposure to certain financial products.

He was responding to earlier comments at an audit regulation conference,
during which Public Company Accounting Oversight Board chairman Mark Olson said
that the crisis stemming from home mortgage defaults by the less creditworthy
has created complex accounting issues and may need guidance,

Olson and McCreevy had earlier delivered speeches at the Federation of
European Accountants conference on Audit Regulation.

Olson said the board is looking at how fair value of an asset, such as
complex repackaged bonds linked to subprime mortgages, could be calculated when
trading in those products had seized up.

‘It has not been decided for certain that we will be providing the guidance,
but it would be similar to what we did for options dating. It’s an effort to
clarify some of the key areas auditors should focus on,’ Olson said.

Further reading:

Mutual oversight of audit to be discussed at FEE

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