Judge Rejects Wal-Mart Effort To Block Public View of Documents
A North Carolina state judge rejected an attempt by Wal-Mart Stores Inc. to block public access to certain court documents in a tax dispute with state authorities.
In a further development in the case of Wal-Mart, E&Y their external auditor, and the special relationship they had and still have with regard to avoiding state taxes….
Wal-Mart has asked the North Carolina court to seal the documents that Wal-Mart’s lawyer Jasper L. Cummings, Jr. at Alston & Bird says, “…the posting of [which] business correspondence on public websites causes unreasonable and undue annoyance and oppression of a party that is attempting to litigate a serious dispute with a public agency. The Chief Justice of North Carolina has determined this to be an exceptional case . . . It is important that this case go to decision and not be unfairly influenced by outside forces.”
Oppression and annoyance are actionable issues, I guess, in Arkansas and Atlanta. Funny though that Wal-Mart has agreed to do E&Y’s dirty work in trying to get all this juicy info, including the RFP, their proposal, invoice and other similar documents sealed. It seems to me that the documents, although damaging to Wal-Mart in this particular case, are really more embarrassing to E&Y. It’s rare that such documents get outside the firm and don’t fall under some kind of a confidentiality agreement.
As the WSJ law Blog states, it’s sort of an academic argument since the documents have been sitting in a public court file for months. The cat’s out of the bag… The milk is spilt… Public information is public information.
That reminds me… Where’s my answer from the New York Attorney General about the documents related to the re-selection of PwC as external auditor at AIG? Maybe someone needs to sue AIG over that sham so that the documents are “discovered?”
In terms of the ongoing relationship between E&Y and Wal-Mart, it’s interesting to note that audit fees to E&Y have skyrocketed in the last seven years. Although less and less are shown to be non-audit related, we have said before that the definitions of how fees are categorized in the proxies and what constitutes audit related activities is dynamic and getting more so under Auditing Standard 5 and Proposed Rule 3525 – Audit Committee Pre-approval of Services Related to Internal Control .
Overall, total fees paid to E&Y by Wal-Mart have gone up 192% since 2001 and 73% since 2003, the first full year after Sarbanes-Oxley passed. The highest year for pure tax fees paid to E&Y was 2002, the first year of their agreement, when they were more than double the audit fees. Pure audit fees have gone up 321% since 2003.
E&Y’s fees were as follows: (All data per proxy documents)
Audit Fees $12,236,000
Audit-Related Fees $ 1,290,000
Tax Fees $ 407,000
All Other Fees $ 0
Total Fees $13,933,000
Audit Fees $10,563,000
Audit-Related Fees $ 1,909,000
Tax Fees $ 487,000
All Other Fees $ 0
Total Fees $12,959,000
Audit Fees $7,050,000
Audit-Related Fees $1,526,000
Tax Fees $795,000
All Other Fees $0
Total Fees $9,371,000
Audit Fees $4,053,000
Audit-Related Fees $959,000
Tax Fees $3,220,000
All Other Fees $125,000
Total Fees $8,357,000
Audit fees $2,909,000.
Audit related fees $1,808,000 and
Non-audit fees $3,352,000 (Non-audit services were primarily tax services.)
Total fees $8,069,000
Audit fees $2,675,000.
Audit related fees $698,000
Non-audit fees $5,585,000. (Non-audit services were primarily tax services.)
Total fees $8,958,000
Audit fees $2,754,200.
Audit-related services of $465,900 and
Non-audit fees of $1,559,200. (Non-audit services were primarily tax services. )
Total Fees $4,779,300