Commenting on the Global Public Policy Committee’s (GPPC*) paper on Valuation of Financial Instruments under IFRS, Peter Montagnon, the ABI’s Director of Investment Affairs, urged audit committees to pay close attention to it. He said:

“Our Investment Committee has discussed current market problems on several occasions and drawn a firm conclusion that greater clarity is needed.  Members have been concerned over the lack of transparency with regard to SIVs and off balance sheet business and we look to audit committees, especially in the current situation, to ensure that relevant information is properly reported.  This includes all facts needed for shareholders to have a proper understanding of the substance.

The auditors have produced a clear statement of what the current standards require. Our members are strongly supportive of this effort to ensure that the forthcoming reporting round achieves clarity and urge regulators also to throw their weight behind this objective. Audit committees can meanwhile help by explaining clearly the procedures they have undertaken to ensure the preparation of accounts is based on sound and considered judgement.  Auditors can help by working closely with audit committees to this end.”

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