11 Sep 2013

Stockbroker proposes rule overhaul

9:06 am on 11 September 2013

Kapiti-based stockbroker Chris Lee is calling for accounting rules to be overhauled, saying they allowed finance firms to appear more financially sound than they actually were.

Some 67 finance firms have collapsed since 2006, which interest.co.nz estimates lost investors $3.1 billion.

Chris Lee was criticised for putting clients into finance firms that subsequently failed, and says the accounting standards encouraged these firms to mislead investors.

He says everyone - the public, regulators, trustees and auditors - was being fed information that reflected companies that were not in anything like the condition they presented themselves as being in.

A lot of that had to do with the accounting standards and what auditors were prepared to accept was income earned when it had not been paid, and accounting standards that assessed bad debts and liabilities.