Oh! what a lovely crisis
The credit crisis rumbles on, markets continue to fall and the ‘contagion’ spreads through countries that had so far felt immune
But in the midst of all the horror, one regulator delivered some good news.
Despite all the mud slinging that has come from politicians and columnists,
The Financial Reporting Council’s chief executive Paul Boyle went out of his way
to deliver an early view of auditors in a speech at Mansion House. ‘So far, at
least, auditing has had a good crisis.’
This is by no means a clean bill of health but, given that Boyle is in
regular contact with the government and the Financial services Authority, it is
a significant indication that no one with real influence believes, at this time,
that auditors will be asked to be the fall guy for the credit crunch.
Auditors over the past week have been quick to point out that they have
ensured that the financial reports have carried the warnings of difficulties, if
people had bothered to look. But, Boyle referred to one other thing: ‘One of the
challenges which critics of auditors need to meet is to be precise about their
complaints.’
He is, indeed, correct. The accusations that have so far come the way of
auditors have been vague, amorphous and opaque. They deliver no detail, offer no
particulars and appear to rest simply on the assumption that a financial crisis
must have something to do with the auditors.
This really isn’t good enough.
Since disaster fell on Northern Rock unsubstantiated accusations have been
made about auditors, yet no one who makes them appears to have any way of
standing them up.
The profession should not be complacent. The attacks will continue and
auditors should ensure they are ready to respond.