• @Forbes: Forget Everyone Else – Why Aren’t Auditors Answering For Financial Crisis?

    By • Dec 11th, 2010 • Category: Audit Quality, Pure Content, Writing for Others

    Some may say that tweaking New York Times reporters to make a point about auditor liability, especially one so prominent such as Andrew Ross Sorkin, may not be a great career move.  But then you’re assuming my idea of a “career” is yours.

    I call them as I see them, and the two blog posts in the New York Times Deal Book column last week were a bit too disingenuous for my taste. Ryan Chittum of the Columbia Journalism Review, who has been hugely supportive of my work here, pats Sorkin and his sidekick Jesse Eisinger on the back for pointing put that the financial crisis may have been caused by a bit of fraud.

    Ok, Ryan.

    Encourage them when they start pointing fingers in the right direction, if you must.  But don’t forget all of the Cassandras out here who’ve been banging the drum for a while.

    I know you won’t. But just to be sure…Here’s an excerpt from my column this past Thursday – it was briefly featured on the banner and front page of the online magazine that day – for Forbes:

    When the big boys at the New York Times decide to push a narrative they give it a one-two punch. Although the writing is pungent, I thought the two pieces – Mr. Sorkin’s and Mr. Eisinger’s – were nearly identical in tone and content. And they’ve not only forgotten about some of the civil settlements that have already occurred, they’re trolling for kudos when the scoop that “fraud happened” is way past its “sell-by” date.

    We’ve celebrated two years since President Obama’s election, two years since the Lehman failure, and two years since the September 2008 big weekend with Bernie and the boys. And this is the first time these guys have been willing to publicly state that something was rotten in Denmark?

    The financial crisis started as the subprime crisis, spent some time as acredit crisis, and has now morphed into the foreclosure crisis.  If you don’t know the fraud that’s apparent now started way back when, you’ve been living under a big gray rock…

    Read the rest at my column, Accounting Watchdog.

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    4 Responses »

    1. Right on, Francine.

      Perhaps you should run for President?

      Derek, ex PW (before the C)

    2. […] This post was mentioned on Twitter by Cate Long, Ralph Smith. Ralph Smith said: re: The Auditors Forget Everyone Else – Why Aren’t Auditors Answering For Financial Crisis? http://bit.ly/dTdPa7 […]

    3. Hello Francine,

      Did I ever tell you how glad I am that you’re in this world? Not only are you not afraid to call them like you see them, but you’re gifted with an auditor x-ray vision that others simply don’t have. Please keep up all the outstanding work you do exposing the never-ending stream of frauds that will continue to be the by-product of our flawed financial system.

      You are dead-on that until we hold the Big Four public accounting firms responsible for their part in the financial crisis–aiding and/or ignoring the frauds and egregious financial shenanigans committed by their clients, we will never stop the flow of financial crises. In my recent blog post entitled “It’s Not My Fault–I HIred the Best Professionals Money Can Buy” I outline five steps to fix our flawed financial structure by putting accountability firmly back into the system. Here’s a link to the post http://bit.ly/fMs0AT.

      And, I am LONG overdue in thanking you for plugging my financial thriller, Shell Games (available at Amazon.com), as a great holiday gift on Twitter–you’re the best!!! As you know, Shell Games is a fun, sexy, adventurous quasi-fictional read about frauds being imbedded in bundled mortgage securities and why we should all be worried that the fallout is nowhere near over! The novel is really targeted at middle-class, non-finance industry types, who feel they don’t have enough knowledge about high-finance to do anything about the situation, or even understand what is really happening to us. I want them to realize we are all being raped. That being said, all the financial-types that have read it have loved it too!

      Thanks again for all that you do to make this world a better place, Francine. It’s an honor to know you.

      Ciao for Now,

      Sara McIntosh

    4. Dear Francine – I don’t know if this is the most appropriate post to utilize to congratulate you on the recent developments with regard to the auditing firms being called on to the carpet for their work with the big banks. Specifically regarding the auditors’ negligence/incompetence/fraud with regard to the putback liability the banks face because of their negligence/incompetence/fraud in selling off their securitized mortgages.

      In case you missed it, Gretchen Morgensen in the January 9th New York Times reported that “…officials overseeing 11 large public pension funds that own shares in the big four banks sent a letter to the directors who head each board’s audit committee. the investors are asking that the audit committees conduct in-depth and independent reviews of all the internal controls related to the banks’ mortgage operations.”

      I congratulate you because of your tireless efforts to bring the problems of the audit industry to light. I’m willing to bet your work played a part in these pension officers taking such a bold move. I’m sure this a hollow victory though. No one wants to see their industry sink to such a pathetic state. The independent auditors now subject to a, presumably, hostile independent audit.

      I’m grateful that these pension officials fulfilled their responsibilities as shareholders. They are not alone, many other pension plans take their responsibities as seriously. We need all shareholders to do so.

      Thanks for pushing the rock up the hill. Let me know if I can do anything to help.

      Dave

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