Finance company auditors have become lap dogs, BT poll respondents say
View(s):While there was wide support for the Government’s proposal to reduce the number of finance companies operating as subsidiaries of larger companies, a Business Times poll shows respondents were mixed on whether the risk element would be reduced.Here are comments received in the poll which is published on Page 1:
- Consolidated financial strength through these mergers will enhance solvency and sustainability. However the fundamental issues of operational risks, financial risks integrity, fit and proper tests and prudent efficient and effective management requirements have not been satisfied.
- The risk would be reduced if a bank or parent company is well managed and financially sound.
- The risk won’t go away 100 per cent. However it is good idea to protect the depositors as most of the holding companies misuse depositors money which come from a financial subsidiary company. To minimize that, this suggestion is good but should come with better monitoring.
- Holding companies themselves know that the depositors’ money is being mismanaged by their subsidiaries.
- My view is that the main component of risk is mainly in the case of non-affiliated or standalone finance companies.
- Stability of finance companies is an indicator of stable economy. If the economy is vulnerable, will this plaster solution bring any substantial stability?
- Isn’t this a self- admission of the government that re-investment in Sri Lanka is not viable for finance companies owing to a veiled economic crisis?
- Isn’t it an attempt by the Central Bank to wash their hands off and spread a potential crisis even beyond financial domain?
- In my opinion, auditing these companies is an utter waste of time. Auditors start off as watch dogs and when they are well looked after, become lap dogs. If the directors are fraudulent they will find ways to rob with or without auditors.