Archive for the ‘The Case Against The Auditors’ Category

Send Lawyers, Guns And Money… The Big 4 And Their Litigation

By Francine • Mar 2nd, 2010

The big lawsuits – the ones that accuse the firms of accounting malpractice or various federal securities law violations – have been chronicled ad infinitum. The accounting industry’s response to these threats is to ask for liability caps. As if we don’t have enough moral hazard in the financial system with “too big to fail,” the auditors want to institutionalize their insulation from accountability to their clients, the shareholders, with a policy of “too few to pay for their mistakes.”


A Prisoner’s Dilemma: AIG and Goldman Sachs Game Each Other And PwC

By Francine • Feb 18th, 2010

I’ve never heard a specific explanation for how PwC could preside over a long running dispute between two of its most important global clients, a dispute that was material to at least one of them, obviously, that had the attention of its highest level partners, and not force a resolution based on consistent application of accounting standards sooner. I’ve been writing almost as long as I’ve been writing here that PwC should resign as AIG’s auditor. Is it not enough that PwC was clearly torn between two clients who held enormous financial sway and lost its independence and objectivity along the way?


The Great American Financial Sandwich: AIG, PwC, and Goldman Sachs

By Francine • Feb 2nd, 2010

Maybe PwC didn’t stand a snowball’s chance in hell to be a truly independent, objective advocate for shareholders by forcing a true and fair presentation, in all material respects, of the financial position of either AIG or Goldman Sachs and the results of their operations and their cash flows in conformity with accounting principles generally accepted in the United States of America. But is there a truly good excuse for PwC to not have been a preemptive strike force, a beacon, an early warning system for shareholders of the financial Armageddon we faced? They had longstanding, thorough, perfect knowledge of both sets of financial statements.


Defending Koss And Their Auditors: Just Loopy Distorted Feedback

By Francine • Jan 16th, 2010

My objective in writing this story was to handily contradict the self-serving defense to the fraud at Koss that’s being served up by Grant Thornton and supported by some commentators. But punching holes in their Swiss-cheese defense is like shooting fish in a barrel.


Are You Gonna Make My Day? The Auditors And SEC Enforcement

By Francine • Jan 14th, 2010

The SEC held a news conference to announce several changes and initiatives in their Enforcement Division. Afterward I joined a few select bloggers invited to a special briefing with Robert Khuzami, the Director of the Division of Enforcement.

It’s my contention that the Big 4 and their partners are still pretty lucky, continuing to dodge any truly deadly SEC enforcement bullets.


EY Settles SEC Charges Re: Bally’s Fraud-Lives To Audit Another Day

By Francine • Dec 17th, 2009

The SEC accused Ernst & Young of issuing unqualified audit opinions that said that Bally’s 2001 and 2003 financial statements conformed with U.S. accounting rules. Six of the Ernst & Young’s current and former partners agreed to settle SEC accounting violation charges as part of this investigation.at least two of the EY partners charged, Fletchall and Sever, held leadership positions with the AICPA in the past.


Suing Audit Firms re: Madoff: The Iguana In The Room

By Francine • Nov 29th, 2009

Which firms have the most Madoff-related claims? Which audit firm locations are named most often? Which filings do not name an audit firm and why? How many name the international audit network umbrella firm? Shouldn’t they all?


So Much Auditor Litigation Makes For Strange Bedfellows

By Francine • Oct 12th, 2009

There’s a heightened probability Deloitte – and the rest of the Big 4 -can end up on both sides of lawsuits with their former and current audit clients.


Auditing Standard 5: How Now, Brown Cow?

By Francine • Oct 3rd, 2009

On September 24, 2009 the Public Company Accounting Oversight Board issued a report on the first year of implementation of Auditing Standard No. 5. There’s something negative to say about each of the components reviewed.


@Going Concern “Lehman: The Razor’s Edge”

By Francine • Sep 16th, 2009

“What really happened? The thousands of column inches devoted to trenchant, complex analysis from financial media pundits is a bit more mental masturbation than we need.”


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