The recent LIBOR scandal raises concerns about whether independent auditors failed to appreciate the significance or risks attendant to client banks' LIBOR-quoting activities, and if so, whether this could be cited as yet another example of auditor malpractice. This article examines whether there are lessons to be learned that will possibly improve the practice of auditing in the future.
It has yet to be demonstrated that the alleged misrepresentation of LIBOR rates had a material impact on any entity’s borrowing costs or investment returns. Neither can it yet be confidently asserted that the banks’ auditors failed in conducting their audits even if these practices did serve to cause some economic harm to their counter-parties or third parties relying on LIBOR to price various assets. However, it is clear that auditors should see this episode as yet another teachable moment.
Read the full article for more detail.
International accounting expert Dr. Barry Jay Epstein, CPA, CFF, is available to discuss the potential for allegations of accountants’ malpractice or auditor liability in regard to the LIBOR scandal. He can be reached at 312-222-1400 or BEpstein@SSandG.com.
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