Auditors pore over sub-prime accounts as year end nears
More writedowns expected as audits of bank balance loom after year end
Banks could face further writedowns to sub-prime assets as they prepare to
open their books to their auditors ahead of releasing final results.
According to reports from Dow Jones, auditors are likely to be far
stricter about accounting for sub-prime assets than the banks themselves.
The Centre for Audit Quality, an organisation set up by the four big
accounting firms, has issued accountants with a series of guidelines urging
auditors to stick by the letter of the law when auditing sub-prime assets.
The accounting for sub-prime assets is hellishly complicated, especially when
the market for these has assets is frozen and complicated valuation models have
to be used, as has happened since the credit crunch.