Likely to be bailed-out? Then it’s a ‘going concern’

I’m not quite sure why this story isn’t topping every news bulletin, but the US-based Auditor’s Blog has an account of the big four auditing firms’ appearance before the UK’s House of Lords Economic Affairs Committee to answer questions on competition and their role in the financial crisis.

Do read the whole thing if you have time, but this line leaps out:

The leadership of the Big 4 audit firms in the UK has admitted that they did not issue “going concern” opinions because they were told, confidentially, by government officials the banks would be bailed out.

As Lord Lawson puts it:

“I find that absolutely astonishing, absolutely astonishing. It seems to me that you are saying that you noticed they were on very thin ice but you were completely relaxed about it because you knew there would be support, in other words, the taxpayer would support them,”

(hat-tip: Alberto Nardelli)