Manglende krav om revision af finansielle virksomheders rapportering til Finanstilsynet

Anne Lynggaard Jørgensen

Student thesis: Master thesis

Abstract

Trust in the financial sector is vital. Vital relative to share’s market value, vital relative to risk costs and vital relative to keeping customers engaged in the specific bank since barriers to change supplier of money is close to non-existing. As a result of the financial crises trust ceased to exist in the financial sector. Values and securities were measured in non-existing markets, as a result of implemented IFRS rules. Added to the fact that external reporting was given with flawless endorsement by audit, trust in society’s representative (auditor) decreased. Also the board’s supplementary role played a part en the crisis. The understanding of the banks complexity in the engaged products was not at a desirable level, and risks were by management increasing to a level not previous seen. The enormous impact on society that the unstable and unsound sector caused made society demand control with the sector. Hence the new role for Finanstilsynet, which handles the financial supervision including Baselreporting. This reporting is not required validity from the auditor although auditor is the independent part, who can validate information in an agent-principal perspective. The supervision is performed simultaneous with the role of ruling and the role of legislature. This causes a legal problem as far as independence and segregation of duties is concerned. The ruling might also be in conflict with existing law, which leaves other legal problems to arise. For instance, the neutrality concept, which conflicts with Basel and OIV (objective indications of less value) and leaves the recognition criteria to be non transparent to both sector and users of accounting reports. This papers target is to discover why Basel reporting is not validated by auditor. The paper leaves no other response than probably auditors have made mistakes but most likely they were forces to accept zero values due to recognition criteria and neutrality shortly after given the assets high value, since auditor must reflect the value in accordance with market value. This shows that market value works but also its difficulties in non-existing markets. But the recognition criteria are hardly to blame for the crises. However this is the reason that Finanstilsynet apparently needs to certify auditor, if he is to audit in the financial sector. Also competences and certifying of the boards members is part of the new role for Finanstilsynet. Finanstilsynet can legislate, exercise and judge, which leaves the conclusion, that the new control environment in some areas is not all legal.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages74