Template:M gen 2002 ISDA 3(d): Difference between revisions
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This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that the statements are a fair representation of the financial conditions. I’m no accountant. I didn’t even write the stupid audit. How am I supposed to know? Why should I give any a stronger representation than the expert?” | This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that the statements are a fair representation of the financial conditions. I’m no accountant. I didn’t even write the stupid audit. How am I supposed to know? Why should I give any a stronger representation than the expert?” | ||
Fair questions, but they misapprehend what is being asked.The riposte is this: | Fair questions, but they misapprehend what is being asked. The riposte is this: | ||
The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that you have handed over ''a fair, accurate and complete copy of those audited statements'', not that the statements ''themselves'', as prepared by the auditor are necessarily fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours. | The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that you have handed over ''a fair, accurate and complete copy of those audited statements'', not that the statements ''themselves'', as prepared by the auditor are necessarily fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours. | ||
Revision as of 06:10, 21 February 2020
Note that the 3(d) representation, in the ISDA documents for delivery table in the Schedule, therefore covers only the accuracy, completeness of Specified Information and not (for example) whether Specified Information is delivered at all. For that, see Section 4(a) - Furnish Specified Information. Template:Commonnegpoints Opposing negotiators may try to crowbar in something like this, to satisfy their yen to make a difference and please their clients with their acumen and commercial fortitude:
- “or, in the case of financial information, a fair representation of the financial condition of the relevant party, provided that the other party may rely on any such information when determining whether an Additional Termination Event has occurred.”
This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that the statements are a fair representation of the financial conditions. I’m no accountant. I didn’t even write the stupid audit. How am I supposed to know? Why should I give any a stronger representation than the expert?”
Fair questions, but they misapprehend what is being asked. The riposte is this:
The Part 3 information you must supply is “Party B’s annual audited financial statements.” So the representation we are after is that you have handed over a fair, accurate and complete copy of those audited statements, not that the statements themselves, as prepared by the auditor are necessarily fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours.