Very Important News Today?

By: Ian Campbell | Tue, Jun 19, 2012
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Why Read: Because if you understand how auditors and their clients function together, reporting delays seldom mean 'good news'.

Featured Article: A brief article this morning reports that:

The big four accounting firms - Deloitte, Ernst & Young, KPMG and PwC - are the ones reported as working on this mandate.

Commentary: I commented on the appointment of auditors, the timing of their reporting, and the problems they were likely to encounter when Spain's bank audits were announced in mid-May, suggesting then that readers consider that:

The last point is something that not all persons opining on property or business value necessarily focus on or input into their value conclusions. This last point is also something that may have influenced the decisions made in Europe and America in 2008 - 2009 when mark-to-market accounting rules where changed. Consider carefully that changes in reporting do not impact market reality at a point in time.

The two audit firms that have been appointed to opine on the Spanish bank property values have a very difficult job. Potential arm's length lenders or equity investors likewise will have very difficult decisions to make.

(see: Spain and Spanish Bank Dilemma, May 14, 2012)

In the best of economic times:

In uncertain and volatile economic times:

It can be argued that the Spanish banking problems today represent an even greater risk to the Eurozone and its continuity than does Greece.

That said:

On the balance of probabilities, this reported delay in auditor reporting tips the Spanish teeter-totter in the direction of 'not auguring well'.

Spain May Delay Bank Audit Deadline
Source: Fox Business, from Dow Jones Newswires, June 19, 2012
Reading time: 1 minute

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
* Canadian Institute of Chartered Business Valuators
** through The Ian R. Campbell Research Initiative

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