US Credit Crisis Could Affect Accounting Companies

Fri, 05 Oct 2007

US analysts have reported that public company auditors could face challenges over maket uncertainty following the recent credit crisis.

The US-based Centre for Audit Quality and the American institute for Certified Public Accountants issued three white papers addressing concerns raised by the liquidity crises in the credit markets, including worries over troubled sub-prime mortgage loans .

Also included in the papers are warnings that investors may be sidelined and auditors more challenged by the impact this could have on public companies, adding it is not unreasonable to expect that current conditions could persist for an extended period of time (until the uncertainty has been reduced).

The white papers were prepared with input from the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board and cover fair value, consolidation of commercial paper conduits, and accounting for underwriting and loan commitments.

Additionally, the reports further outline existing US accounting rules in the respective areas and explain their application in situations of "illiquid market conditions".
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