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Topic: Is E&Y The New Arthur Andersen? (

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Donald11
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Joined: 14 Sep 2009
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Posted: 12 Mar 2010 at 18:42 \| IP Logged

Apparently E&Y helped Lehman Brothers hide their debt. Very smilar to Arhtur Andersen and Enron. Anyone think that E&Y will be indicted the same way AA was? If the are, that would basically shut them down and everyone who works there will be unemployed, further complicating a recovery in the accounting job market. Even a class action lawsuit by Lehman shareholders against E&Y could have strong implications for the company.

"Ernst & Young is clearly in a dangerous place but it's unclear how complicit they might be," said Jack Ciesielski, publisher of the Analyst's Accounting Observer, an advisory service for security analysts.

http://www.marketwatch.com/story/lehman-autopsy-throws-ernst -young-into-spotlight-2010-03-12?reflink=MW_news_stmp

“Enron brought down Arthur Andersen,” Felix Salmon notes. “Will Lehman do the same for E&Y?”

http://www.businessinsider.com/will-ernst-and-young-survive- the-lehman-fiasco-2010-3

allegro-cpa
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Joined: 28 Dec 2009
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Posted: 12 Mar 2010 at 19:52 \| IP Logged

Auditors are not fraud examiners and are not responsible for looking for something like this and telling on them, they are supposed to help the client. First I don't even think that E&Y understood how MBS and all the structured bond securities worked like many others.

If they do get in trouble and go down, Let PWC and E&Y go under for and fall like AA did. That leaves the Big 2. Deloitte and KPMG (which seem like the most clean of firms). Then let Deloitte and KPMG merge in 10 years and we have only 1 large accounting firm. Regional firms like Grant Thornton and BDO become bigger powerhouses and gain more clients. Its a pattern, big 8, big 6, now big 4, and in the future big 2.

The SEC is responsible for the nonsense that went on with Lehman. Someone needs to audit the auditors. Audit E&Y's financials and check their firm for fraud as well, hahaha

Greed is killing america. We want to much, to fast. We see one color. Green.

fla_examer85
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Posted: 12 Mar 2010 at 20:05 \| IP Logged

Fed's wont do that again, look back at the AA case and see the courts later admitted they were way too harsh (too little too late). Worst you'd see is a few heads roll.

Even if E&Y was no more, it wouldn't make all those people unemployed, all the offices would quickly be absorbed by other firms like with the AA offices.

Sec704b
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Joined: 29 Jan 2010
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Posted: 12 Mar 2010 at 23:05 \| IP Logged

I thnk the gov doesnt want anyone else unemployed...the big4 are safe at least for the forseeable future

Zeratul
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Joined: 11 Jun 2009
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Posted: 13 Mar 2010 at 07:17 \| IP Logged

A comparison between Ernst&Young and Arthur Anderson is a bit premature. Thus far, it would appear that E&Y merely knew about the questionable accounting practices and failed to either provide a qualified/adverse opinion or discuss the situation with management. Contrast this with the AA situation, which was infinitely more offensive due to the cozy relationship caused by the partners in crime (AA and Enron), with AA doing the consulting on accounting tricks, signing off on those tricks in audit, and even at one point shredding documents for Enron.
At best, the E&Y situation constitutes a bad audit. They could be in financial trouble due to contingent litigation, and depending on culpability the auditors involved might have some problems down the road, but I heavily doubt that the firm is going to be shut down (unless of course it goes bankrupt).

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