The UK accounting watchdog, the Financial Reporting Council, is all set to review the bookkeeping of the big banks following the crisis of 2007 - 2009.
Last year I had a meeting with a very senior person in the Bank of England. I said that as an accountant who qualified with Coopers & Lybrand, now PWC, I was puzzled that no-one had yet sued the Big 4 accountants after they had signed off all the bank accounts with no qualifications - a totally clean bill of health. I suggested that the only sensible reason was that they were, like the banks, too big to fail.
This review will start in a few months and it's conclusions will be interesting, to say the least.
At our end it's no doubt a lot easier, nevertheless we still follow the cardinal principle of being able to understand and validate everything in the Balance Sheet. I do wonder how many auditors or indeed banks really did understand what the numbers represented?
Anthony Pilkington, Managing Director, BookCheck Ltd