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Banks Valuing Subprime Assets Have To Pass Auditors' Muster

money.cnn.com

Financial firms heavily exposed to subprime are under pressure from auditors to take bigger write-downs.
American International Group AIG on Feb. 11 said the value of its credit-default swaps fell by $4.88 billion in October and November, more than four times its prior forecast.AIG's independent auditor, PricewaterhouseCoopers, said the insurance giant had a "material weakness" in its internal controls.Last week, a chastened AIG reported an unexpected $5.29 billion fourth-quarter loss while writing down $11.1 billion for the three-month period. Banks and other financials have marked down more than $150 billion in assets since the subprime debacle unfolded. But auditors may want even more, depending on how aggressively they apply post-Enron accounting rules.

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