Vir Cantium

I'm right, you know …

Move Along EU Lot, Nothing To See Here

Michel Barnier

Michel Barnier: If it wasn't for those pesky auditors....

I know, it’s hard to believe that a story about auditing didn’t lead the news last Thursday, but in case you missed it:

LONDON, Feb 10 (Reuters) – Auditing firms in the European Union face more competition and curbs on their activities to restore their “tarnished” image, the bloc’s financial services chief said on Thursday.

“One can no longer say ‘move on, there is nothing to see’ on audit issues,” EU Internal Market Commissioner Michel Barnier told a webstreamed hearing on auditing in Brussels.

Policymakers also ask why auditors gave banks a clean bill of health when many of them had to be rescued by taxpayers as the financial crisis unfolded.

Ernst & Young is being probed in Britain and pursued in the U.S. courts over its role in signing off on the accounts of Lehman Brothers, the U.S. bank that collapsed in September 2008, sparking a near meltdown in the global financial system.

Of course, we do expect auditors to report where they have concerns. Equally important is doing something about those concerns. So what should people have done if the auditors of the failed and struggling banks had blown the whistle? Perhaps they could have been led by the EU’s own example, highlighted by George Osborne this week.

The British Government has put the Commission “on notice” that the accounts, which have not been signed off by auditors for 16 years because of apparent inconsistencies, are unacceptable.

16 years of qualified/unsigned accounts? As M. Barnier might put it, “move on, nothing to see”.

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