Comments on: So Much Auditor Litigation Makes For Strange Bedfellows http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/ The Business of the Big 4 Audit Firms Wed, 08 Feb 2012 21:24:11 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: The Fed’s Full Disclosure: Don’t Forget About Government GAAP - Francine McKenna - Accounting Watchdog - Forbes http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-141515 The Fed’s Full Disclosure: Don’t Forget About Government GAAP - Francine McKenna - Accounting Watchdog - Forbes Thu, 02 Dec 2010 16:08:12 +0000 http://retheauditors.com/?p=3134#comment-141515 [...] auditor of those illustrious failures Bear Stearns, Merrill Lynch, Washington Mutual, Fannie Mae (the only one on this list still sending [...] [...] auditor of those illustrious failures Bear Stearns, Merrill Lynch, Washington Mutual, Fannie Mae (the only one on this list still sending [...]

]]> By: Francine McKenna: Will Auditors Ever Answer to Investors for Aiding and Abetting? http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-119586 Francine McKenna: Will Auditors Ever Answer to Investors for Aiding and Abetting? Fri, 02 Jul 2010 23:22:49 +0000 http://retheauditors.com/?p=3134#comment-119586 [...] still not a deluge, since the PSLRA makes it damn difficult to draw the auditors in without a smoking gun or, actually, a rogue mechanical pencil. Even with a [...] [...] still not a deluge, since the PSLRA makes it damn difficult to draw the auditors in without a smoking gun or, actually, a rogue mechanical pencil. Even with a [...]

]]> By: So a Big Four is set to fail? | called2account http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-63990 So a Big Four is set to fail? | called2account Sun, 13 Dec 2009 15:11:30 +0000 http://retheauditors.com/?p=3134#comment-63990 [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...] [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...]

]]> By: So a Big Four is set to fail? | called2account http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-63989 So a Big Four is set to fail? | called2account Sun, 13 Dec 2009 15:11:30 +0000 http://retheauditors.com/?p=3134#comment-63989 [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...] [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...]

]]> By: Tax Research UK » So a Big Four is set to fail? http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-63924 Tax Research UK » So a Big Four is set to fail? Sun, 13 Dec 2009 11:01:11 +0000 http://retheauditors.com/?p=3134#comment-63924 [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...] [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the banking [...]

]]> By: So a Big Four is set to fail? http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-63559 So a Big Four is set to fail? Sat, 12 Dec 2009 16:48:23 +0000 http://retheauditors.com/?p=3134#comment-63559 [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the [...] [...] if not all of the Big Four will collapse. No amount of posturing by regulatory bodies will prevent aggrieved stakeholders from pursuing legal remedies in light of some of the more egregious cases such as Satyam or what’s fallen out of the [...]

]]> By: fm http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-43860 fm Thu, 29 Oct 2009 16:30:35 +0000 http://retheauditors.com/?p=3134#comment-43860 @Joe Delvine Actually I'd like to know whether Deloitte, EY, PwC or KPMG were at the table during these weekend dealmaking sessions or consulted when their respective clients were bailed out, forced to fail, bought suddenly by others etc. Does anyone know? Since valuation of assets held by the banks/investment bank was key to establish a purchase price or windup cost I'm wondering if they were consulted or why not. I've had a potential post about this sitting on my list and have not heard anyone else talk about it until now. Francine @Joe Delvine

Actually I’d like to know whether Deloitte, EY, PwC or KPMG were at the table during these weekend dealmaking sessions or consulted when their respective clients were bailed out, forced to fail, bought suddenly by others etc. Does anyone know? Since valuation of assets held by the banks/investment bank was key to establish a purchase price or windup cost I’m wondering if they were consulted or why not. I’ve had a potential post about this sitting on my list and have not heard anyone else talk about it until now.
Francine

]]> By: Joe Delvine http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-43236 Joe Delvine Thu, 29 Oct 2009 02:17:00 +0000 http://retheauditors.com/?p=3134#comment-43236 I don't understand how D&T got pulled into this suit as they were not consulted during the weekend from hell. Due deligence did not really exist as this entire ordeal was 2 CEOs and their related BODs working a weekend...In retospecty, both CEOs should have stayed on the golf course and all would have been good. I don’t understand how D&T got pulled into this suit as they were not consulted during the weekend from hell. Due deligence did not really exist as this entire ordeal was 2 CEOs and their related BODs working a weekend…In retospecty, both CEOs should have stayed on the golf course and all would have been good.

]]> By: Philip J. Fry http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-37898 Philip J. Fry Tue, 20 Oct 2009 16:25:20 +0000 http://retheauditors.com/?p=3134#comment-37898 @ 14 - I understand when someone is arguing semantics while overlooking the substance of an argument. I just chose to ignore you. @ 15 - I'm not so sure that shareholder dilution was the only factor driving down share prices. I think there was real doubt, especially in the case of Citi and Morgan, that these companies could survive without either de facto nationalization (Fannie, Freddie) or forced acquisition (Bear, Merrill). Was disaster a forgone conclusion? Or course not. Was it a serious possibility that raised a lot of doubt in the minds of the market about the survival prospects of these firms? I think so. P.S. Morgan did become a bank holding company to get access to Fed cash. However, in the summer of 2008 Lehman also had access to the Fed window and that didn't keep them alive. @ 14 – I understand when someone is arguing semantics while overlooking the substance of an argument. I just chose to ignore you.

@ 15 – I’m not so sure that shareholder dilution was the only factor driving down share prices. I think there was real doubt, especially in the case of Citi and Morgan, that these companies could survive without either de facto nationalization (Fannie, Freddie) or forced acquisition (Bear, Merrill). Was disaster a forgone conclusion? Or course not. Was it a serious possibility that raised a lot of doubt in the minds of the market about the survival prospects of these firms? I think so.

P.S.
Morgan did become a bank holding company to get access to Fed cash. However, in the summer of 2008 Lehman also had access to the Fed window and that didn’t keep them alive.

]]> By: Anonymous http://retheauditors.com/2009/10/12/so-much-auditor-litigation-makes-for-strange-bedfellows/comment-page-1/#comment-37789 Anonymous Tue, 20 Oct 2009 11:47:22 +0000 http://retheauditors.com/?p=3134#comment-37789 @ Phil - I believe Morgan had also converted to a bank holding company to gain access to liquidity from the Fed. And in March, the Federal government had already shown it was willing to dump money into certain key banks, such s Morgan, Goldman, and Citi, regardless of how dismal their results were (cough... Citi..cough). So if I were a partner on any of those engagements I probably wouldn't have had much of an issue. I think the dismal share price wasn't due to the market saying these banks would fail, but rather the fear that the common shareholder would be completely dilluted by more government cash. Having a viable way to raise cash, even if it is incredibly dillutive to your current shareholders would help support the fact that you are a going concern. Now if I was auditing a smaller regional bank who the gov't had proven they don't really care about.... that would be another case entirely, and I think you may see more lawsuits arising over those audits as those banks continue to fail through the rest of 2009. @ Phil – I believe Morgan had also converted to a bank holding company to gain access to liquidity from the Fed. And in March, the Federal government had already shown it was willing to dump money into certain key banks, such s Morgan, Goldman, and Citi, regardless of how dismal their results were (cough… Citi..cough). So if I were a partner on any of those engagements I probably wouldn’t have had much of an issue. I think the dismal share price wasn’t due to the market saying these banks would fail, but rather the fear that the common shareholder would be completely dilluted by more government cash. Having a viable way to raise cash, even if it is incredibly dillutive to your current shareholders would help support the fact that you are a going concern.

Now if I was auditing a smaller regional bank who the gov’t had proven they don’t really care about…. that would be another case entirely, and I think you may see more lawsuits arising over those audits as those banks continue to fail through the rest of 2009.

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