Err, yes?

The business select committee said it had identified “inadequate” accountability within Mr Gupta’s GFG Alliance following an investigation into the impact of the collapse of Greensill Capital, GFG’s main lender.

In a damning report, the committee said it has seen “no tangible evidence” that GFG was improving its corporate governance, and warned that delays to its accounts meant it was hard to understand the true finances of the company’s UK steel division Liberty Steel.

Be honest here. Why do you think he uses a boutique firm as his auditors? Does he want folks to be able to understand?

I will say this though. Whether it’s just plate spinning or he’s actually managing to keep the show on the road he’s done this for much longer than I thought he was going to be able to.

4 thoughts on “Err, yes?”

  1. “he’s done this for much longer than I thought he was going to be able to”

    Maybe because the world has been a little distracted lately?

  2. Bloke in North Korea (Germany province)

    Why boutique? Haven’t one or two not-boutique firms vanished off the face of the planet because of their auditing practices? Who signed off on wirecard? A boutique?

  3. I came across a very interesting piece of research on this once. It turns out there is quite a strong link between how ‘marginal’ an auditor is and the risk of fraud.

    Obviously we all know about dodgy Chinese companies with no-name auditors with an office behind the takeaway, for example.

    But the interesting part was, when they looked at the Big 4-audited frauds, it turns out there was a (proportionately) much higher risk if led from regional offices. Not just foreign offices either – Lots of the U.K. frauds were audited by e.g. ‘Big 4 Leeds’ rather than the London HQ.

    The theory was that these offices struggle to justify their existence and profile more than London, and so end up bending the rules or using inadequate resources more.

  4. One thing I learned from my decades on the racecourse is that punters (and bookmakers) who you think are winging it or are lying about their success can go on way longer than you expected them to. Unless you’re in their position, you don’t appreciate all the ways there are out there of obtaining credit.

    They do always get found out in the end, and they do always leave a trail of naive and greedy creditors behind them; but it always takes months or years longer than you thought it would, and long after you’ve been forced to admit (incorrectly as it turned out) that you’d got them wrong.

    It’s a variation on the theme of the market being able to stay irrational longer than you can stay solvent.

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