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Auditors Escape Crunch Criticism So Far

Global Glimpses | November 26, 2008

The auditing profession has come out of the credit crunch relatively unscathed, with few observers blaming firms for failing to spot the problems that got banks into difficulty, according to Paul Boyle, chief executive of Britain’s Financial Reporting Council. “So far, at least, auditing has had a good crisis,” Boyle said in a speech on early lessons to learn from the financial turmoil.

“I have heard some criticism of the work of auditors, but they have been a mix of the ‘too lax’ and ‘too strict’ varieties of criticism,” Boyle said. He called for critics of auditors to be more precise about their complaints.

He gave the example of critics who say auditors should have intervened earlier to encourage their financial services clients to constrain the proliferation of exotic financial instruments. Such complaints, he said, “seem to me to be based on a fundamental misunderstanding of the...

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