PracticeAuditTreasury committee accuses auditors of “tunnel vision”

Treasury committee accuses auditors of "tunnel vision"

Auditors becoming bogged down in disclosures

A treasury committee has accused auditors of having “tunnel vision” and
failing to deliver relevant information to shareholders.

The committee, which examined the factors which contributed to the banking
crisis, accused auditors of failing to offer “clear and impartial” information
and becoming bogged down in detail and disclosures.

“The big picture that shareholders want to see is lost in a sea of detail and
regulatory disclosures,” the committee said.

It referred to recent accusations that collapsed US bank Lehman Brothers
manipulated their balance sheet by removing toxic assets and liabilities from
their balance books during sensitive reporting periods.

“The recent revelations about Lehman’s use of Repo 105 illustrates the extent
to which audit reports can seemingly omit crucial information,” the committee
said.

“We call for progress on our earlier recommendations, to ensure that audit
reports are an effective tool for investors.”

It follows October 2009 comments from the Association Of British Insurers
which said it wanted to see “shareholders given the information they need in
order to act as responsible owners of companies”.

Read the full report
here

Further reading:
Audit
reports targeted for reform

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