Could the audit industry, which thrives on a government mandate that subsidizes an oligopolistic business model, survive if we went, catastrophically, from four to three global firms?
Last defendant standing. Not an enviable place for EY in the case, In re Lehman Brothers Securities and Erisa Litigation. Holding out until the end has now cost EY $99 million, more than Lehman officers and directors.
If the JP Morgan “Whale” settlement was a true Sarbanes-Oxley success story, we’d see some bank executives going to jail. For a change.
Do you want to learn more about those who push for a return to the gold standard? Do you know the common thread between JP Morgan, Madoff’s biggest feeder fund, Chesapeake Energy, and MF Global? Here’s a speech I gave back in May 2012 in New York to the Committee for Monetary Research and Education that touches on both topics.
Robert Ricketts, Texas Tech University and Rawls College of Business accounting department chairman, invited me to speak at his school last April. Here’s a link to the presentation, an excerpt and some additional comments on recent news.
It’s important for the integrity of the capital markets to assign individual responsibility for audit failures. We need to see the key partners’ names and their career histories because recidivist partners are hiding behind the firms which are very good at dodging general liability.
You can’t throw a rock at a fraud or scandal nowadays without hitting three, sometimes all four, of the largest global audit firms providing one service or another. The Big Four global accounting firms make money whether clients survive and thrive or flail and fail.
Here’s a compilation – updated – with links for the columns/posts I’ve written about the mortgage servicer foreclosure reviews mandated by the April 2011 SEC/Fed consent orders, the April 2012 Attorneys General mortgage settlement and the intersection of the two regulatory actions.
I thought after all that had happened at JPMorgan Chase last year – for example, billions in losses from the “whale” trade, investigations into Libor and AML illegal acts, multiple lawsuits including by the New York Attorney General for foreclosure fraud – someone would take a close look at internal audit and, maybe, make some big changes. I was wrong.
I was in New Orleans this past long Martin Luther King Day weekend to speak at the American Accounting Association Auditing Section Midyear Conference. Here are my slides and text of my remarks.
Because I’m so tired, tired of waiting…
It’s sexier for the media to focus on audit failures by inscrutable China-based Big Four audit firms than the general failure of auditors all over the world to protect investors from fraud.
