Auditor's boilerplate starts to buckle

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With an economic downturn a distinct possibility, Britains biggest auditors are being careful to protect themselves when it comes to their clients financial statements.

Credit insurer Euler Hermes predicted insolvencies will rise 8.3% to 13,492 in 2008, the highest for five years, and auditors dont want to be caught out for failing to highlight likely trouble. On the other hand, there is the small matter of jeopardising client relations if companies arent given the all clear. So instead of issuing a qualified opinion that dreaded phrase which has long been the most damning criticism in the audit vocabulary audit firms have taken to adding a series of extra paragraphs and notes instead.

Increasingly popular phrases include added emphasis or emphasis of matter, whereby the auditors can discl...

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