Business & Finance

British Accounting Firms Face New Setback as FRC Opens Probe

5 months ago Amanda T. Noriega

(Bloomberg) — Britain’s audit industry faces another dent to its reputation as the nation’s accounting watchdog ordered a probe into PricewaterhouseCoopers LLP, Ernst & Young and Oliver Clive & Co.’s work for defunct London Capital & Finance Plc.

The Financial Reporting Council said in a statement on Wednesday that its enforcement unit will look at the audits of now defunct mini-bond lender London Capital & Finance for the periods ending April 30, 2015, the year ending April 30, 2016 and for the year ending April 30, 2017.

London Capital & Finance issued mini-bonds, taking funds from about 14,000 customers that the company said it used to make loans to corporations for investment. It went into administration after the U.K. Financial Conduct Authority and Serious Fraud Office opened investigations.

The announcement comes at a difficult time for the accounting firms. The so-called Big Four, including PwC and Ernst & Young, have

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EY and PwC face investigation over London Capital & Finance audits

5 months ago Amanda T. Noriega
PwC
PwC

Three auditors which signed off the books of collapsed savings firm London Capital & Finance (LCF) are being investigated by the accounting watchdog.

Big Four accountants EY and PwC and smaller rival Oliver Clive & Co will face questions from the Financial Reporting Council (FRC) over why no warning dachshund puppies for sale near me signs were spotted before LCF went bust last year, leaving 11,600 investors facing losses of up to £237m.

Administrators later found that customers’ money had been spent on a riding stables, a helicopter and what they termed “highly suspicious” property developments in the Cape Verde islands.

The three auditors signed off LCF’s accounts between 2015 and 2017.  EY and PwC oversaw a set of annual results in 2016 and 2017 respectively, while London-based Oliver Clive audited the company for a month in April 2015.

The investigations will be conducted by the FRC’s enforcement division,

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Germany to overhaul accounting regulation after Wirecard scandal

5 months ago Amanda T. Noriega
Markus Braun, former chief executive of Wirecard - Michael Daider /Reuters
Markus Braun, former chief executive of Wirecard – Michael Daider /Reuters

Germany’s accounting watchdog is set to be stripped of its powers in the wake of the Wirecard scandal. 

The government will end its contract with the Financial Reporting Enforcement Panel (FREP) as soon as Monday, according to reports.

The job of overseeing company accounts will be taken on by Bafin, Germany’s financial regulator. 

“We have reached an agreement with the Finance Ministry to terminate the contract,” a Justice Ministry official told the Bild am Sonntag newspaper

Germany has been rocked by the collapse of payments company Wirecard, which filed for insolvency last week after admitting that €1.9bn (£1.7bn)  of cash on its balance sheet probably didn’t exist. 

Markus Braun, chief executive of the Dax-listed company, resigned on June 19 and was then arrested on suspicion of accounting fraud and market manipulation. 

German authorities are facing questions over

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Should Value Investors Choose WhiteHorse Finance (WHF) Stock?

5 months ago Amanda T. Noriega

Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?

One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put WhiteHorse Finance, Inc. WHF stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:

PE Ratio

A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in

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Wirecard Exposes Big 4 Accounting Lapses Endure Post-Enron

5 months ago Amanda T. Noriega

(Bloomberg) — Two decades of financial disasters from Enron Inc.’s collapse in 2001 to Wirecard AG’s meltdown have left the Big Four accounting firms facing a major cultural problem that regulators may struggle to resolve.

The 1.9 billion euros ($2.1 billion) missing from Wirecard’s balance sheet brought the chief executive officer’s arrest, the German payments firm’s insolvency filing and a lot of finger-pointing. Some have blamed German regulator BaFin for its oversight failures. Wirecard’s auditor, Ernst & Young, called it an “elaborate” fraud that even a very rigorous probe may not have discovered.

But EY is also on the hot seat. It was added to a class-action style lawsuit against Wirecard on Tuesday, and stands accused of failing in its most fundamental duty. It’s a systemic problem facing not just EY, but also the other members of the Big Four: KPMG, Deloitte and PriceWaterhouseCoopers, according to Atul Shah, an accounting

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After $9 Billion Credit Hit, Banks Seek Trade Finance Revamp

5 months ago Amanda T. Noriega

(Bloomberg) — When Credit Agricole SA and HSBC Holdings Plc issued a payment guarantee for a $76.5 million fuel purchase from a Singapore trader in March, they unwittingly became the latest victims in a series of trade finance scandals that have led to more than $9 billion in potential losses for global lenders.

At the same time that Hin Leong Trading Pte. was pledging the fuel to back the loan, it allegedly agreed to sell the same cargo to another trader, who sought letters of credit from three banks including Credit Agricole.

This line of credit merry-go-round was among many allegedly fraudulent tools used by Hin Leong, one of Singapore’s biggest oil traders before its spectacular collapse in April that left 23 banks on the hook for $3.5 billion, according to a report from court-appointed managers.

For banks financing the opaque world of commodities trading in Singapore, Hin Leong isn’t

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