The Center for Audit Quality (CAQ) is living up to its name, as it has issued three white papers in response to the so-called “liquidity crisis” that began in the subprime mortgage-related markets and, according to CAQ, has spread to other corners of the credit markets with “a potentially pervasive impact on public companies generally with respect to investments held.” 

The reasoning is, investors have pulled back from investments in high-yield “junk” bonds, debt issued in leveraged buyout transactions, and even short-term asset-backed commercial paper, and that could continue for an extended period. The three white papers are entitled,  “Measurements of Fair Value in Illiquid (or Less Liquid) Markets,” “Consolidation of Commercial Paper Conduits,” and “Accounting for Underwriting and Loan Commitments.”

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