BANKS should produce an additional set of accounts for regulators, according to Accountancy Age readers.
Of the 50 polled, 94% agreed audited accounts conspicuously failed to accurately inform their users about the financial condition of banks, and as such warranted the additional accounts. The remaining 6% said the existing principles in international accounting standards are all perfectly applicable to banks.
The Parliamentary Commission on Banking Standards (PCBS) last month said auditors failed in their duty to expose the risks accumulating banks’ balance sheets and acted as “cheerleaders” for questionable reporting practices.
The group was set up by the government in the wake of a string of scandals involving the industry. It found bankers, regulators, investors and auditors all failed to understand the risks building up in the banking system.
According to evidence collected by the PCBS, the overly close relationships between banks and their auditors meant that “at best, auditors did not act as the last line of defence against banks’ questionable reporting on their own businesses and, at worst, they were cheerleaders for it.”
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