NBS nationwide building society.

my position on the key issues, page-6

  1. 9,544 Posts.
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    Good job Ousia, you have saved me some significant coin with your posts. Shame I didn't listen to you earlier.

    RE:

    "(9) I don't think NBS's auditor contravened standard auditing protocol in any way. However, I do think the auditor could have drawn some attention in the Statutory Report to (i) the ownership structure of CITP, and (ii) the proximity between the date of the report and the date that the China receivables would have become past due."

    I wouldn't expect PKF (NBS's auditor) to have commented on the ownership structure of CITP as it is not in the auditor's scope to do that. Suffice to say that I would find it highly unusual for an auditor to comment on the ownership structure of a receivable.

    The scope of the auditor is to comment on the truth and fairness of the financial statements and related disclosures. The auditor would need to make their own judgement about whether the receivable was correctly stated and was in fact recoverable as at 30 June 2009. Frequently this is achieved by matching the receivable to subsequent receipts, but in the absence of that, Dykes may have led PKF to believe that the receivable is sovereign (i.e. government debt) and therefore improbable to default. If that is the case, PKF can claim that they were misled about the true nature of the debtor and give the standard spill about how they are not responsible for detecting fraud and error.

 
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