Wednesday, November 25, 2015

Huge Accounting Error

Here’s an accounting failure large enough to startle, but with little consequence in the end. Citic, one of the largest brokers in China, claimed more than 1 trillion yuan in over-the-counter derivatives it didn’t actually hold, in monthly financial reports this year. A regulatory body found the error, and Citic is in the process of filing amended reports. The story at Reuters:

The accounting error does not affect Citic’s financial results. Contracts were apparently double-counted after a technical change in a database. The timing of the error suggests that it could have been related to the stock market rout, though few details are available.

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