Accounting-geeks (like us) might remember that at the start of last year there was much discussion as to whether Britain’s big four auditing firms — PwC, Deloitte, Ernst & Young, and KPMG — would be able to sign off the 2008 end-of-year accounts of the country’s beleaguered banks.
At the time banks’ assets were difficult or impossible to value, their shares were volatile, and no one really knew what was to become of the financial institutions.
Paul Boyle, then-CEO of Britain’s Financial Reporting Council, said at in January 2009:
“Directors and auditors are going to have to deal with [this issue] with great care. I doubt that there is anyone in the country who can say with certainty that the banks will be trading in 12 months’ time.”
So much for care.
From the UK’s audit watchdog’s just-published annual report for 2009/2010:
We’re being facetious of course.
There’s no indication that the financial statements involved were those of a bank. But if ever there was temptation — or pressure — to hurry up and sign-off we imagine it would have come in the dark winter months of 2009. And would most likely have involved a bank.
And for reference — the Audit Inspection Unit is part of the Financial Reporting Council. Its 2009/2010 report reviews audits with financial years ending between June 2008 and August 2009 — the majority of which were either 31 December 2008 or 31 March 2009 year ends.
Related links:
Auditors signing off before finishing work – FT
Watch banks pull rabbits out of hats… – Re: The Auditors
Ten easy lessons in cooking the books – FT Alphaville
FSA lays ground for shake-up of auditing – FT