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Wednesday, October 27, 2010

The Dog That Didn't Bark

The House of Lords is conducting an enquiry into the audit profession, and has been told that accounting rules were a significant contributing factor to the banking crisis.

Tim Bush, a member of the Accounting Standards Board's (ASB) Urgent Issues Task Force, told the Lords that international accounting standards forced auditors to abandon the principle of prudence in their audits.

Lord Lawson accused the profession as being "one of the dogs that didn't bark."

He quite rightly uses the phrase "one of".

As noted many times before on this site, the tripartite regulatory system set up by Gordon Brown failed primarily because no one body that belonged to it (ie Bank of England, Treasury and FSA) was deemed to actually be in charge of it.

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