Uncooking the books from toxic paper sub-prime mortgages CDS and CSOs material misstatements of the financial services industry: crisis challenges and counterparty surveillance of collateralised debt obligations

Abstract

This paper studies the sub-prime mortgages, credit default swaps (CDS) and collateralised synthetic obligations (CSOs) cooking the books of the financial services industries at a global level. The paper uses the case of the Bank of Barclays to develop a methodology of uncooking the books from material misstatements of the financial industry. This research is about the current sub-prime markets crisis and shows how sub-prime mortgages, CDS and CSOs overstated the revenues of the financial services industries leading to the stock markets meltdown of October 2008. The paper attempts to develop regression models and software that detect fraud involved in the mortgages crisis and a method for fraud 'finger print' definition. This paper provides the readers with fundamental information about firms and auditors' misconduct. While this study researches primarily in the area of international economics and accounting, it also deals with computer information systems automation and specifically forensic accounting, expert witness testimony and computer litigation support.