PKF warns of continued lack of controls

Forensic accountants at
accountants & business advisers have warned the ?3.7bn loss at French bank
Société Générale highlights
the continuing lack of controls at some major financial institutions.

‘The lessons of the Nick Leeson and Barings case in 1995 appear to have been
forgotten by some. The scale of this clearly surpasses that fraud and is truly
shocking,’ David Dearman, PKF partner, said.

He said the biggest risk was complacency. ‘It is highly important that once
procedures are in place, they are strictly adhered to, monitored and regularly
reviewed – staff must understand and be trained in identifying risk and, where
breaches occur, effective disciplinary action should be taken so that the
seriousness is brought home,’ Dearman said.

’I can only trust that the procedures adopted in the City a decade ago are
working and being regularly reviewed but there will undoubtedly be some very
nervous senior people in the industry today. Confidence requires that there are
effective checks and balances in place and that they’re being audited and
lessons learned.’

Further reading:

Société Générale announces massive write-down – and fraud

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