Monday 23 October 2017

Auditors need to keep an eye on their own backyard

WHAT happened to Bloxham is a cataclysm. One thing that has been missed amid all the commentary is just how many decent people worked there.

Bloxham may not have been the biggest kid on the block but its employees were among the nicest.

This is often the case with small organisations that have to battle against bigger rivals and Bloxham had an esprit de corps which was admirable but also led to well-informed commentary from the broker's economists and analysts.

Equity analysts such as Joe Gill and Kevin McConnell or veteran economist Alan McQuaid often had original insights into the markets. There were many more behind the scenes.

It is too early to draw many conclusions from the implosion of our oldest stockbroker but one obvious lesson from this debacle is that auditors can miss things.

It seems that auditors, like nappies, need to be changed regularly.

Just like the rating agencies, the world's large auditing firms have managed to avoid the full portion of blame which they deserve for their role in this crisis.

We still use them and still rely on them despite the mounting evidence that many of them are worse than useless because they give us a false sense of security.

The crisis at Bloxham is a reminder that it really is time for the Government to re-think the rules surrounding auditors and insist on some sort of term limits so that a fresh set of eyes look at accounts from time to time.

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