Securities and Futures Commission has spun out of control in the Moody’s Red Flags case; China was selected for the first market in which this system would be employed and the results showed a forest of red flags

http://www.scmp.com/print/comment/insight-opinion/article/1673481/securities-and-futures-commission-has-spun-out-control

Securities and Futures Commission has spun out of control

Sunday, 04 January, 2015, 6:53am

Jake van der Kamp

A markets tribunal has overturned a request by Moody’s Investors Services for privacy in its appeal against a Securities and Futures Commission’s decision to fine the ratings agency HK$23 million.

SCMP Business, January 2

I just don’t understand these people at Moody’s. Here they were four years ago still facing awkward questions about whether they foresaw the 2008 financial crisis or were any better than the market itself in rating risk and they decided to come up with a new ratings tool.

They called it the “Red Flags” framework, a way of assessing fixed income risk in emerging markets. Red flags would be posted according to set rules for five critical areas in which corporate affairs could go wrong. Count the number of flags and you get a workable debt rating. Continue reading

Directors are still not properly policing corporate dangers; Study of audit committees shows slow progress on monitoring accounts and risks; Tesco’s accounting issues have highlighted the role of directors in spotting problems

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11304016/Directors-are-still-not-properly-policing-corporate-dangers.html

Directors are still not properly policing corporate dangers, study finds

Study of audit committees shows slow progress on monitoring accounts and risks

Tesco’s accounting issues have highlighted the role of directors in spotting problems Photo: Bloomberg News

By Marion Dakers, Financial Services Editor

8:15PM GMT 03 Jan 2015

Many company directors have struggled to get to grips with new rules that are supposed to help identify risks that firms could face, though some progress is being made, according to new research.

Despite high-profile examples of boards missing dangers, including accounting holes at the Co-operative and Tesco in the past two years, some companies’ audit committees are still producing “disappointingly sparse and generic” reports, the accounting firm BDO said. Continue reading