Scribd Logo
Upload

Welcome to Scribd!

  • 23 views

    Individual Reflection On Adler Bonds' Recent Plummet in The Market

    Uploaded by

    Janella Bianca Siruno
    Investors of German company Adler Group SA evaluated KPMG's audit in detail after Adler Group's bonds dropped to historic lows of 73 cents per euro. KPMG's 125-page audit exposed several financial irregularities and questionable consulting fees at Adler Group SA. In response to the audit findings, Adler Group's bonds continued to lose value and the cost of insuring the company's debt grew, suggesting a nearly 60% possibility of default within 5 years. The lack of transparency from Adler Group increases the likelihood that regulatory agencies will perform more investigations. Investors will always need audits to properly evaluate companies and their investments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Individual Reflection On Adler Bonds' Recent Plummet in The Market

    Uploaded by

    Janella Bianca Siruno
    23 views2 pages
    Investors of German company Adler Group SA evaluated KPMG's audit in detail after Adler Group's bonds dropped to historic lows of 73 cents per euro. KPMG's 125-page audit exposed several financial irregularities and questionable consulting fees at Adler Group SA. In response to the audit findings, Adler Group's bonds continued to lose value and the cost of insuring the company's debt grew, suggesting a nearly 60% possibility of default within 5 years. The lack of transparency from Adler Group increases the likelihood that regulatory agencies will perform more investigations. Investors will always need audits to properly evaluate companies and their investments.

    Original Title

    Reflection

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Investors of German company Adler Group SA evaluated KPMG's audit in detail after Adler Group's bonds dropped to historic lows of 73 cents per euro. KPMG's 125-page audit exposed several financial irregularities and questionable consulting fees at Adler Group SA. In response to the audit findings, Adler Group's bonds continued to lose value and the cost of insuring the company's debt grew, suggesting a nearly 60% possibility of default within 5 years. The lack of transparency from Adler Group increases the likelihood that regulatory agencies will perform more investigations. Investors will always need audits to properly evaluate companies and their investments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    23 views2 pages

    Individual Reflection On Adler Bonds' Recent Plummet in The Market

    Uploaded by

    Janella Bianca Siruno
    Investors of German company Adler Group SA evaluated KPMG's audit in detail after Adler Group's bonds dropped to historic lows of 73 cents per euro. KPMG's 125-page audit exposed several financial irregularities and questionable consulting fees at Adler Group SA. In response to the audit findings, Adler Group's bonds continued to lose value and the cost of insuring the company's debt grew, suggesting a nearly 60% possibility of default within 5 years. The lack of transparency from Adler Group increases the likelihood that regulatory agencies will perform more investigations. Investors will always need audits to properly evaluate companies and their investments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Individual Reflection

    ON ADLER BONDS’ RECENT PLUMMET IN THE MARKET

    Without dispute, auditing has become an essential business practice. The audit must always be a
    part of a company's overall management to promote a progressive work environment anchored in
    integrity and accountability. Even if an audit task includes thorough tests, every action in this
    engagement exists to improve the firm. As such, all audit procedures are equally relevant. One of
    these procedures is an audit of investments, particularly for companies that acquire and adopt
    progressive business practices that truly work in a real-world setting.

    Investors of the German company Adler Group SA recently evaluated the company's audit in
    detail. They know there may have been a 60 percent default when bonds dropped to historic
    levels. The bonds of the struggling Adler Group SA plunged to record lows as investors
    continued to assess KPMG's audit, which exposed several financial irregularities and
    questionable consulting fees. Adler Group's 4.5 billion Euros in bonds continued to lose value
    after the audit was disclosed, with some notes trading as low as 73 cents per euro. The cost of
    insuring the debt of the real estate company grew and now suggests a nearly 60% possibility that
    it would decline in 5 years, up from a 50% likelihood, according to ICE estimates. Consequently,
    these investors eagerly awaited the findings of the audit engagement that Adler had asked for in
    response to Fraser Perring's, a short seller, last year's claims of fraud. KPMG's 125-page study
    made several adverse claims, including a value discrepancy of 411.8 million euros for sure of
    Adler's development projects, even though it made no accusations of fraud.

    According to David Schnaps, a senior analyst from CreditSights, the lack of transparency
    increases the likelihood that regulatory agencies will perform more fact-finding. Adler's 700-
    million-euro bonds with a January 2026 maturity date had a price fall of more than 7 cents,
    reaching their lowest level because of being issued a year earlier. Investors evaluated KPMG's
    findings on Friday, and the firm's bonds gave up an earlier gain to close lower. The management
    of Adler asserted that the findings backed their claims.
    Investors have looked into the potentially problematic assets on Adler's balance sheet in great
    detail. Aggregate Holdings SA, a significant shareholder in Adler, has reportedly accelerated the
    sale of non-core businesses recently to reduce debt and offset growing financing costs, according
    to the KPMG study. Based on this occurrence, it is safe to say that audit will always be necessary
    for a corporation, primarily because a business requires a system of control. No matter how small
    or large the business, it is crucial to understand the fundamentals of such an audit to justify the
    investor's judgment call.

    To save money and time, investors must know when to remove their money from a position or at
    the very least know when to question their investment decisions. A business is a risk unto itself,
    so knowing when to seek professional help with data analysis of the firm's disclosed data is
    crucial. It is relatively uncommon for a company to operate in a way that is advantageous in all
    respects. However, it is the duty of shareholders, investors, and management to understand their
    company and assume control over it to achieve the most basic goal that essentially drives it all:
    making a profit — this can be possible through the religious practice of an honest audit.

    Reference

    Benitez, L. (2022, April 25). Adler Bonds Plummet as Investors Dig Through KPMG Audit.
    Bloomberg.com. https://www.bloomberg.com/news/articles/2022-04-25/adler-bonds-
    plummet-as-investors-dig-through-forensic-kpmg-audit

    You might also like