Middle East Focus-Arabia Deserta: Gulf Financial Accounting Shenanigans, Lehman-Style………….

Arabia Deserta

Gulf Financial Accounting Shenanigans, Lehman-Style………….

“Accounting practices similar to those used by Lehman Brothers to mask bad assets before its collapse are also being adopted by Gulf companies, auditors say. Now regional governments are being urged to clamp down on companies that are misleading investors by keeping assets that could be responsible for losses off their balance sheets. At the same time, local auditors are facing increased scrutiny after a series of corporate scandals that have hurt investor confidence from Damman to Dubai. Auditors accuse some Gulf companies of flouting book-keeping rules to avoid disclosing transactions involving shares and sukuk, or Islamic bonds, to shareholders…….. After the financial crisis, concern is building about the accounting standards used by Gulf companies. “In this part of the world, there are many types of arrangements where the derecognition rules come into play,” said a GCC accountant who asked to remain anonymous……….”

Why am I not surprised to read this report?
Cheers
mhg

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