Global investment bank and financial services company Credit Suisse has reportedly identified ‘material weaknesses’ in its annual report 2022. Days after the Silicon Valley Bank (SVB) crisis unfolded, Credit Suisse too, has reportedly come forward and revealed a plan to address this fallacy.
According to a Reuters report, Credit Suisse has flagged these ‘material weaknesses’ in its internal controls primarily over financial reporting. The review and acknowledgment reportedly comes after concerns were raised by the US regulators and a delay in the release of Credit Suisse’s annual report, especially after some questions were raised on some cash-flow statements of the bank.
“As of December 31, 2022, the Group’s internal control over financial reporting was not effective, and for the same reasons, management has reassessed and has reached the same conclusion regarding December 31, 2021,” Reuters quoted the bank’s statement as per a regulatory filing.
According to media reports, Credit Suisse’s ‘material weaknesses’ mainly related to the failure to design and maintain effective risk assessments; and this problem has been vastly seen in its financial statements. In addition to this, the bank’s assessment becomes important as it comes after an “adverse opinion” issued by auditor PricewaterhouseCoopers (PwC). It reportedly said on the “effectiveness of the bank’s internal controls over its reporting but its statements present fairly, in all material respects” the position of Credit Suisse in 2020 and throughout 2022.
Meanwhile, Credit Suisse in a statement said, “Credit Suisse would like to reiterate, as announced this morning, our financial results for 2022 and preceding years are accurate and reliable, as supported by a clean audit opinion by our external auditor, PwC. Disclosures regarding the financial reporting control environment in the 2022 Annual Report have no impact on the full-year financial results that were announced on February 9, 2023, and none of the key metrics are affected.”
Credit Suisse has come under the scanner just days after the Silicon Valley Bank collapsed, posing a threat to the US banking system. The global investment bank also flagged concerns over the Gautam Adani-led Adani Group after Hindenburg Research report accused the Indian conglomerate of fraud.