03-08-2009, 11:19 PM
Interesting discussion here CFANerd, Goodman, Kamran.
CFANerd, your comment about AA is well documented and recent history. Re Coopers and Lybrand, can you provide a link or any further details, I was working for this firm when the worldwide merger took place with Pricewaterhouse, today's PwC and do not remember any such allegations, moreover the merger came about due to a mutual desire by CL and PW and had nothing to do with a regulatory or market driven need. Care to please expand.
Goodman, re audit firms clean reports and current market conditions,. well just my cent here, I guess some of these risks were beginning to trickle through the Director's/Chariman's report under the Operational matters and prospective reporting. I think the single most factor in this whole liquidity/credit induced recession is the popularity of Complex (yet lightly regulated) Structured finance products (CDOs, ABS, MBS etc.), the pretext being you minimize risk if you spread it across the industry, across geographical locations. The first line of blame or responsibility should be at Banks that issued underlying mortgages (primarily in the US to the subprime market quite a few including Indymac, Freddie mac, Fannie mae), followed by Investment banks who packaged these and sold it all over the world (the likes of Lehman), the credit rating agancies (Moodys, S&P)who were too slow to react, the Investors (our high street banks, hedge funds, pretty much any one with some cash in hand) relying way too much on credit rating agencies, the regulator (FSA, SEC in the US etc.) for not doing much about it anyways and the last but not least the auditors for having accepted this as a good business model having run its course for some 20+ years.
CFANerd, your comment about AA is well documented and recent history. Re Coopers and Lybrand, can you provide a link or any further details, I was working for this firm when the worldwide merger took place with Pricewaterhouse, today's PwC and do not remember any such allegations, moreover the merger came about due to a mutual desire by CL and PW and had nothing to do with a regulatory or market driven need. Care to please expand.
Goodman, re audit firms clean reports and current market conditions,. well just my cent here, I guess some of these risks were beginning to trickle through the Director's/Chariman's report under the Operational matters and prospective reporting. I think the single most factor in this whole liquidity/credit induced recession is the popularity of Complex (yet lightly regulated) Structured finance products (CDOs, ABS, MBS etc.), the pretext being you minimize risk if you spread it across the industry, across geographical locations. The first line of blame or responsibility should be at Banks that issued underlying mortgages (primarily in the US to the subprime market quite a few including Indymac, Freddie mac, Fannie mae), followed by Investment banks who packaged these and sold it all over the world (the likes of Lehman), the credit rating agancies (Moodys, S&P)who were too slow to react, the Investors (our high street banks, hedge funds, pretty much any one with some cash in hand) relying way too much on credit rating agencies, the regulator (FSA, SEC in the US etc.) for not doing much about it anyways and the last but not least the auditors for having accepted this as a good business model having run its course for some 20+ years.
