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	<title>Comments on: Warning Signs: I Started Looking And The Bubble Burst&#8230;</title>
	<atom:link href="http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/feed/" rel="self" type="application/rss+xml" />
	<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/</link>
	<description>The Business of the Big 4 Audit Firms</description>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; 2011 Loeb Award Application: Beat Reporting</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-153540</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; 2011 Loeb Award Application: Beat Reporting</dc:creator>
		<pubDate>Wed, 16 Feb 2011 17:36:01 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-153540</guid>
		<description>[...] published several stories since 2007 on the mortgage originators that failed or were taken over and the lawsuits against their [...]</description>
		<content:encoded><![CDATA[<p>[...] published several stories since 2007 on the mortgage originators that failed or were taken over and the lawsuits against their [...]</p>
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		<title>By: The Fed&#8217;s Full Disclosure: Don&#8217;t Forget About Government GAAP - Francine McKenna - Accounting Watchdog - Forbes</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-141520</link>
		<dc:creator>The Fed&#8217;s Full Disclosure: Don&#8217;t Forget About Government GAAP - Francine McKenna - Accounting Watchdog - Forbes</dc:creator>
		<pubDate>Thu, 02 Dec 2010 16:29:50 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-141520</guid>
		<description>[...] Lynch, Washington Mutual, Fannie Mae (the only one on this list still sending money to Deloitte) and American Home Mortgage, is the firm on the job to assure us of the integrity and validity of the Fed&#8217;s financial [...]</description>
		<content:encoded><![CDATA[<p>[...] Lynch, Washington Mutual, Fannie Mae (the only one on this list still sending money to Deloitte) and American Home Mortgage, is the firm on the job to assure us of the integrity and validity of the Fed&#8217;s financial [...]</p>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; PCAOB Waiting For Godot: Reporting On Auditor Performance During The Financial Crisis</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-132692</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; PCAOB Waiting For Godot: Reporting On Auditor Performance During The Financial Crisis</dc:creator>
		<pubDate>Thu, 07 Oct 2010 19:55:45 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-132692</guid>
		<description>[...] on Deloitte’s part to add fuel to the fire of a negligence or accounting malpractice claim in the American Home failure. Deloitte had been warned by the PCAOB about its shoddy work on the 2007 audit of AHM. [...]</description>
		<content:encoded><![CDATA[<p>[...] on Deloitte’s part to add fuel to the fire of a negligence or accounting malpractice claim in the American Home failure. Deloitte had been warned by the PCAOB about its shoddy work on the 2007 audit of AHM. [...]</p>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; Can I Have Your Autograph: Signing The Audit Report</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-132588</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; Can I Have Your Autograph: Signing The Audit Report</dc:creator>
		<pubDate>Wed, 06 Oct 2010 19:05:22 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-132588</guid>
		<description>[...] look another recent case, the settlement of the American Home Mortgage litigation by Deloitte to see that the question of, “Who is responsible?” is not one the firms like to answer. Who was [...]</description>
		<content:encoded><![CDATA[<p>[...] look another recent case, the settlement of the American Home Mortgage litigation by Deloitte to see that the question of, “Who is responsible?” is not one the firms like to answer. Who was [...]</p>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; Auditors Say Jump&#8230; New &#8220;Appeals&#8221; Process Will Impede Timely PCAOB Inspection Reports</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-123742</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; Auditors Say Jump&#8230; New &#8220;Appeals&#8221; Process Will Impede Timely PCAOB Inspection Reports</dc:creator>
		<pubDate>Tue, 03 Aug 2010 19:58:23 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-123742</guid>
		<description>[...] at least two cases where I’ve seen adequate identification and warning of poor audit processes: American Home and Huron Consulting. Slow issuance of the inspection reports, the lack of transparency caused by [...]</description>
		<content:encoded><![CDATA[<p>[...] at least two cases where I’ve seen adequate identification and warning of poor audit processes: American Home and Huron Consulting. Slow issuance of the inspection reports, the lack of transparency caused by [...]</p>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; Ernst &#38; Young and Lehman Brothers: A Summary of Quotes, Stories and Links</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-94623</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; Ernst &#38; Young and Lehman Brothers: A Summary of Quotes, Stories and Links</dc:creator>
		<pubDate>Sun, 21 Mar 2010 18:27:29 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-94623</guid>
		<description>[...] published several stories since 2007 on the mortgage originators that failed or were taken over and the lawsuits against their [...]</description>
		<content:encoded><![CDATA[<p>[...] published several stories since 2007 on the mortgage originators that failed or were taken over and the lawsuits against their [...]</p>
]]></content:encoded>
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		<title>By: re: The Auditors &#187; Blog Archive &#187; So Much Auditor Litigation Makes For Strange Bedfellows</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-70672</link>
		<dc:creator>re: The Auditors &#187; Blog Archive &#187; So Much Auditor Litigation Makes For Strange Bedfellows</dc:creator>
		<pubDate>Tue, 29 Dec 2009 16:49:29 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-70672</guid>
		<description>[...] Every one of the Big 4 (and the next tier) has a handful of lawsuits on their desk related to their audits of the banks and other financial institutions that failed, were taken over in the dead of night, or bailed out by their respective central banks. That&#8217;s in addition to the various fraud and Madoff related suits. It may or may not have been better for them to have warned us with &#8220;going concern&#8221; opinions earlier.  We&#8217;ll let the judges and juries decide, if any of the cases are actually tried.  Most often they settle and the audit firm pays, but not as much as you would think. [...]</description>
		<content:encoded><![CDATA[<p>[...] Every one of the Big 4 (and the next tier) has a handful of lawsuits on their desk related to their audits of the banks and other financial institutions that failed, were taken over in the dead of night, or bailed out by their respective central banks. That&#8217;s in addition to the various fraud and Madoff related suits. It may or may not have been better for them to have warned us with &#8220;going concern&#8221; opinions earlier.  We&#8217;ll let the judges and juries decide, if any of the cases are actually tried.  Most often they settle and the audit firm pays, but not as much as you would think. [...]</p>
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		<title>By: Tony Rezko</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-26165</link>
		<dc:creator>Tony Rezko</dc:creator>
		<pubDate>Tue, 15 Sep 2009 17:54:18 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-26165</guid>
		<description>There are some other warning signs you shouldn&#039;t miss, that the Big Four will miss, when we bounce back.

Bernanke says the recession is likely over, according to a story today. Take that as you will, but in any case, I predict another 18 months will pass before the Big Four catches up to the news. A few other things will happen in those 18 months:

1)  Next fall (2010), when bonus checks clear, you&#039;ll see a mass exodus for companies willing to actually pay their talent. If you think you&#039;re doing more for less, wait until FY11.

2) Every month until then, we&#039;ll see articles on our company website about the &quot;challenges we face,&quot; and an &quot;attaboy&quot; for all the great work we&#039;re doing, blah, blah.

3) More audits will be messed up, but we&#039;ll still have that super high success rate some find so relevant.

4) We&#039;ll be admonished by some B4 apologists that &quot;the firm exists to make a profit,&quot; ignoring a fact that the companies poaching our talent (see #1) are also in it for the money, and are better at exploiting the less than savvy Big Four partners.</description>
		<content:encoded><![CDATA[<p>There are some other warning signs you shouldn&#8217;t miss, that the Big Four will miss, when we bounce back.</p>
<p>Bernanke says the recession is likely over, according to a story today. Take that as you will, but in any case, I predict another 18 months will pass before the Big Four catches up to the news. A few other things will happen in those 18 months:</p>
<p>1)  Next fall (2010), when bonus checks clear, you&#8217;ll see a mass exodus for companies willing to actually pay their talent. If you think you&#8217;re doing more for less, wait until FY11.</p>
<p>2) Every month until then, we&#8217;ll see articles on our company website about the &#8220;challenges we face,&#8221; and an &#8220;attaboy&#8221; for all the great work we&#8217;re doing, blah, blah.</p>
<p>3) More audits will be messed up, but we&#8217;ll still have that super high success rate some find so relevant.</p>
<p>4) We&#8217;ll be admonished by some B4 apologists that &#8220;the firm exists to make a profit,&#8221; ignoring a fact that the companies poaching our talent (see #1) are also in it for the money, and are better at exploiting the less than savvy Big Four partners.</p>
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		<title>By: Time Served</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-24121</link>
		<dc:creator>Time Served</dc:creator>
		<pubDate>Thu, 10 Sep 2009 19:33:33 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-24121</guid>
		<description>I saw this stuff while reviewing loan applications in 2004/2005. I was doing consulting work on loan documentation verification and just could not believe the applications that were approved. 80%+ of the apps we reviewed originated in CA, and people were getting I/O loans on 600k houses with 50k incomes. Taking out a second mortgage on the downpayment and closing costs, essentially putting nothing down on a half million dollar home. They were taking out second mortgages to buy cars, boats, go on trips, etc. These intentions were CLEARLY stated on their applications. I could not believe these were being approved. Yet they had been and more kept coming in. Even as a newly minted college grad I knew there was no way to sustain this. These people were playing with fire on these I/O loans, and it caught up to all of us. But these lenders paid the big fees to the big 4, so it was easy to issue that clean opinion. after all, an auditor isn&#039;t a forecaster, who knows what the future will bring? will the housing bubble last forever? probably not. but they could &quot;reasonably&quot; assume it would continue for another year, and as long as those engagement fees are padding my K-1 those reserves look OK from 50,000 feet. the intent of GC statements is obvious and noble, but no one wants to tell the guy bleeding out he&#039;s not going to make it.  Of course the big 4 were more concerned about fees, not feelings. a GC opinion could lose you an account, and any of the other big 3 would probably be more than willing to hop in and issue a clean one if it doesn&#039;t smell too bad. in all of this stockholders/bagholders are simply casualties of war.</description>
		<content:encoded><![CDATA[<p>I saw this stuff while reviewing loan applications in 2004/2005. I was doing consulting work on loan documentation verification and just could not believe the applications that were approved. 80%+ of the apps we reviewed originated in CA, and people were getting I/O loans on 600k houses with 50k incomes. Taking out a second mortgage on the downpayment and closing costs, essentially putting nothing down on a half million dollar home. They were taking out second mortgages to buy cars, boats, go on trips, etc. These intentions were CLEARLY stated on their applications. I could not believe these were being approved. Yet they had been and more kept coming in. Even as a newly minted college grad I knew there was no way to sustain this. These people were playing with fire on these I/O loans, and it caught up to all of us. But these lenders paid the big fees to the big 4, so it was easy to issue that clean opinion. after all, an auditor isn&#8217;t a forecaster, who knows what the future will bring? will the housing bubble last forever? probably not. but they could &#8220;reasonably&#8221; assume it would continue for another year, and as long as those engagement fees are padding my K-1 those reserves look OK from 50,000 feet. the intent of GC statements is obvious and noble, but no one wants to tell the guy bleeding out he&#8217;s not going to make it.  Of course the big 4 were more concerned about fees, not feelings. a GC opinion could lose you an account, and any of the other big 3 would probably be more than willing to hop in and issue a clean one if it doesn&#8217;t smell too bad. in all of this stockholders/bagholders are simply casualties of war.</p>
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		<title>By: In the company of Cassandra &#124; called2account</title>
		<link>http://retheauditors.com/2009/09/01/warning-signs-i-started-looking-and-the-bubble-burst/comment-page-1/#comment-23582</link>
		<dc:creator>In the company of Cassandra &#124; called2account</dc:creator>
		<pubDate>Wed, 09 Sep 2009 09:14:48 +0000</pubDate>
		<guid isPermaLink="false">http://retheauditors.com/?p=2923#comment-23582</guid>
		<description>[...] the meantime, people like Richard, Francine, myself and Adrienne will keep plugging away at the issues – even if that means we individually [...]</description>
		<content:encoded><![CDATA[<p>[...] the meantime, people like Richard, Francine, myself and Adrienne will keep plugging away at the issues – even if that means we individually [...]</p>
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