02
Oct
How ironic that the government attempts to protect consumers with more and more regulation on lenders, yet the basic purpose of the regulation is not being met.
Accounting firms are supposed to issue 'going concern' opinions, warnings that must be attached to  annual reports when there is a risk a company may not survive.  Auditors failed to warn of troubles of many large banks and other companies that  collapsed in the credit crisis. The Financial Accounting Standards Board has been  considering a proposal that would put more pressure on companies themselves to   issue going-concern warnings; the Public Company Accounting Oversight Board, meanwhile, is reviewing the standards for auditors.

Below is a list of some of the largest U.S. companies that filed for bankruptcy during the credit crisis and a listing as to whether they received a going-concern warning from their auditors.
COMPANY
BANKRUPTCY YEAR
ASSETS ($BILLIONS)
GOING CONCERN WARNING
Lehman Brothers
2008
691.0
No
Washington Mutual
2008
327.9
No
General Motors
2009
91.0
Yes
CIT Group
2009
80.4
No
Thornburg Mortgage
2009
36.5
Yes
IndyMac Bancorp
2008
32.7
No
General Growth
2009
29.6
Yes
Lyondell Chemical
2009
27.4
No
New Century
2007
26.1
No
Source: Audit Analytics and Bankruptcydata.com
  

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