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I’m sure you’re not surprised I have an opinion about Ernst & Young’s role in the Lehman Brothers failure or about the SEC’s suit for fraud against Goldman Sachs.
If you are a regular reader of this site, you may remember the first time I warned you about the poor disclosure practices surrounding repurchase risk. It was all the way back in March of 2007 and I was referring to the lack of disclosures surrounding New Century Financial. I warned you again seven months ago that another KPMG client, Wachovia/Wells Fargo, has the same disclosure issues with regard to repurchase risk. The latest announcements of potentially material losses due to forced repurchases of mortgages from Fannie Mae (Deloitte) and Freddie Mac (PwC) were made by JP Morgan and Bank of America – both audited by PwC. Maybe ya’ll should kick the tires a little more on Citibank’s big comeback.
Paul Barrett of Business Week wrote a great profile last week of Senator Ted Kaufman, Vice President Joe Biden’s replacement in the US Senate for Delaware.
I was quoted twice.
Some proponents of stricter financial oversight see Kaufman, an obscure back-bencher, as an unlikely hero. “It’s so rare for an appointed senator to do so much, so [...]
The financial crisis is now about fraud. The word that dared not be uttered, even behind closed doors, has now disturbed the peace of a nascent “recovery.”
I’m quoted today in a great new piece by Louise Story and Eric Dash entitled, “Lehman Used ‘Alter Ego’ To Transfer Risks.”
“How can anyone — regulators, investors or anyone — understand what’s in these financial statements if they have to dig 15 layers deep to find these kinds of interlocking relationships and these kinds of [...]
“The recent wave of corporate fraud is raising a harsh question about the auditors who review and bless companies’ financial results: How could they have missed all the wrongdoing? One little-discussed answer: a big change in the way audits are performed.” Jonathan Weil said that in 2004. It’s as true today as it was then.
The US Federal government has been propping up AIG with hundreds of billions of dollars and AIG has been, in turn, protecting its auditor, PricewaterhouseCoopers.
Unfortunately for Ernst & Young, even before the release of the Lehman report, too many things had already gone wrong. Their credibility is, pretty much, shot to hell. Their only hope may be that both civil and criminal proceedings take so damn long that they’ll instead die a slow and painful death by litigation and suffocating legal fees than by the swift sword of an Arthur Andersen-type criminal indictment by the US Department of Justice.
“Terry Starbucker” is the nom de plume of my friend Terry, a service company executive (and CPA) with nearly 28 years in the business world. He writes about leadership and personal development on his blog, Ramblings From a Glass Half Full.
I will be presenting on Friday afternoon, May 14th. My topic is: The Skeptical Professional
ATLANTA, GA–(Marketwire – March 30, 2010) – You might think of superheroes in uniforms or capes, but in these tough financial times, many heroes wear business suits. And instead of firearms, their weapons are spreadsheets, paper trails and databases. Dozens of [...]
 Francine McKenna (@retheauditors) has more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad. Look for my column, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. Your firm can sponsor this specialized news site. For more information contact Francine McKenna, fmckenna@mckennapartners.com |
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