The Bank of England issued a statement yesterday saying that the UK’s major banks and building societies are currently underestimating their losses by £50 billion.
I think that’s true.
But why didn’t they say as a result that the accounts of the banks in question are not true and fair?
Or that they cannot have been properly audited as a result?
And that this crisis is in no small part the fault of the Big 4 auditors who signed those accounts off and who in very large part helped set the rules under which those accounts were prepared that were written by the International Accounting Standards Board, of which they are major funders?
Why is it that when auditors have so very obviously failed completely and utterly in their duty we just turn a blind eye?
Because the law says that auditors should audit banks in this manner. It\’s what the law actually says they must do.
But accounts were and should be prepared on an anticipated loss basis as happened to 2005
Yes, the law was changed in 2005.