Case 8.11 Societe Generale Grade 40/40

Topics: International Financial Reporting Standards, Audit, Auditor's report Pages: 4 (1460 words) Published: December 4, 2011
Case 8.11 Societe Generale

1) This was the hardest question I delt with in this case, so I went to the basics: Accounting and Auditing in France. I came across the Supreme Council of the Institute of Chartered Accountants(7) and the National Society of Auditors (CNCC). (8) After researching this I simply did a search on the individual websites for “recent developments”, and nothing major came up in regards to the individual organizations. However, on expert-comptables.fr, I came across a press release that was released in regards to the IASB and FASB giving an update to the Memorandum of Understanding. This press release shows how the IASB and the FASB have plans to commit to a common set of high quality standards. It also laid out several projects over the next few years to reach this common goal of a higher quality, better consistency, and more comparability of financial information to investors worldwide. 2) I do not agree with this reasoning. Although the illegal trading did begin in “late” 2007, the losses did not occur till January of 2008. In the Accounting profession, we realize earnings when they take place. Let’s say this would have happened legally and not as big of amounts, say $640,000 instead of $6.4 billion. That loss for the bank would not have been realized in 2007. Not to mention, according to the reading, “During the first few weeks of January 2008, Kerviel made several huge trades… that European stock market … turn sharply higher by late January. Instead, those markets declined.” (1)That statement shows that the loss of the one billion euros occurred on separate trades made in January, not late 2007. The trades that caused the loss of $6.4 billion occurred after these trades, therefore the trades occurred in mid-January and not in 2007 at any time. 3) To start fwith IFRS “True and Fair Override” is when a company can depart from international accounting standards under extremely rare circumstances. This means that when following...
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