Audited financial statements are supposed to provide a solid foundation for financial markets. Yet, they increasingly appear incapable of delivering what is needed—a reliable assessment of an organization’s financial position. Is there any hope for change?
The recent history of professional accountancy and audit firms has been far from glorious. Audited financial statements are supposed to provide shareholders, investors and creditors with an independent and objective assessment of an organization’s health. The financial crisis of 2008, the aftershocks of which are still being felt all over the world, made audited financial statements look like they were not worth the paper they were written on. Continue reading
Posted in Banking, Business
Tagged accounting firms, Audit, auditor, Big 4, Enron, Financial Crisis, financial markets, financial statements, investors, JP Morgan, Shareholders, Values
The past few weeks have witnessed several instances where shareholders have rejected executive compensation packages proposed by bank boards. Is this the dawn of a new era in corporate governance?
Many years ago when I was Business Manager to the Global Head of Treasury at ABN AMRO, the unit submitted its bonus request for that year to the director responsible for the investment banking unit. When he saw the size of the request his acerbic response was; “so what about the shareholders”.
It would appear that shareholders around the world are now beginning to ask the same question. From one bank to the next shareholders are venting their displeasure at the size of executive compensation plans—forcing management to revise their payouts.
Posted in Banking, People
Tagged ABN AMRO, Bank of America, Banks, Barclays, Bonus, Business, Citigroup, Dodd Frank, Executive, Financial, Government, Management, Pay, Shareholders, Subprime Crisis, UBS