|
|
Various French banks and insurers – plus rivals from other countries – posted 21 per cent losses on “available for sale” Greek government bonds in results for the first half of 2011. They argued that trading in the securities was too thin to be meaningful, allowing them to escape the 50 per cent or so write-down implied by market prices. Other financial institutions took the full hit.
The French banks’ stance has been challenged by Hans Hoogervorst, chairman of the IASB, the rule-setter. By echoing Mr Hoogervorst’s concerns, Stephen Haddrill, chief executive of the FRC, was taking particular aim at radical audit market reform proposals leaked out of the European Commission last month. The draft regulations envisaged forcing bigger companies to use more than one auditor, as well as banning audit firms from doing some consulting work for audit clients.
These measures are already in force in France. However, Mr Haddrill argued that the contentious treatment of Greek debt suggested French auditing was not of a higher quality as a result.
The FRC, which also sets UK corporate governance rules, favours a much less radical approach to audit regulation than Brussels. Its edgiest proposal would oblige companies to tender their audit contract at least once every decade, or at least explain why they had not done so.