Post new topic Reply to topic  [ 50 posts ]  Go to page 1, 2, 3, 4  Next
Author Message
 Post subject: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 4:04 pm 
Offline
Nationalised
User avatar

Joined: May 3, 2007
Posts: 11903
http://www.rte.ie/news/2011/0415/anglo.html

We of the Pin may have to make a specific complaint or two so does anybody have John Purcells email address handy :(

Quote:
Accountancy firm Ernst and Young has taken High Court proceedings aimed at halting an investigation into its conduct as auditors of Anglo Irish Bank.

Lawyers for the firm told the High Court this morning they wanted to stop the process involving the special investigator John Purcell who was appointed by the Chartered Accountants Regulatory Board.

The court was told the firm had been co-operating with the investigation but as recently as the end of last month discovered that no actual complaint had been made against it as is required under by-laws governing the process.

Counsel for Ernst and Young Paul Sreenan said when they sought clarification on the exact nature of the complaint of misconduct being investigated, they discovered that no clear issue had been identified.

Instead, the investigator's initial findings merely referred to media reports, he said.

In order to respond to the investigator's initial findings, the company must be allowed to know what rule or regulation they were supposed to have broken, Mr Sreenan said.

Ernst and Young is seeking a court order to quash the decision of the Institute of Chartered Accountants to appoint the special investigator.

_________________
SEO Ireland. SEO Dublin.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 4:21 pm 
Offline
Too Big to Fail
User avatar

Joined: Jan 20, 2009
Posts: 3240
Location: My imagination
If the report is correct it was a pretty massive slip up. People will forget there was ever a semi-investigation, everyone goes home with, their reputation intact in the long run, including the profession. Very, very sloppy.

I wonder does a sort of double jeopardy apply in these situations? Can the regulator come again?

_________________
“The only calibration that counts is how much heart people invest, how much they ignore their fears of being hurt or caught out or humiliated. And the only thing people regret is that they didn't live boldly enough, that they didn't invest enough heart, didn't love enough. Nothing else really counts at all.” Ted Hughes

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” Anais Nin


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 4:32 pm 
Online
Of Systemic Importance

Joined: Jun 9, 2008
Posts: 7018
If someone were to make a report, the disclosure (lack of) in relation to Seanie's loan movements was likely wrong, and certainly the transactions should have been removed given their continual reversal as that was simply window dressing that should have been picked up.

https://www.carb.ie/Complaints/Make-a-Complaint/

_________________
“Don't ask the barber if you need a haircut—and don’t ask an academic if what he does is relevant.” Nassim Nicholas Taleb


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 4:48 pm 
Offline
Nationalised
User avatar

Joined: May 3, 2007
Posts: 11903
Same Old Same Old Ernst and Young.

http://www.independent.ie/business/iris ... 88818.html

From last October.

Quote:
But Ernst & Young also has very serious questions to answer here about its role as Anglo auditor, and its response to date has been nothing short of arrogant and evasive. In February 2009 the firm said it would not be "appropriate'' to appear before the parliament of this country to answer questions about its role as external auditor to Anglo.

Why Ernst & Young was so worried about a searching interrogation by an Oireachtas committee is baffling. Questions from most members of these committees are rarely forensic and very few reputations have been destroyed, or even dented, in such fora.

The firm apparently had legal advice preventing it from appearing and since then it has refused to answer any questions about why it missed so many of the controversial transactions that occurred in Anglo in 2008 and further back.

The present concentration on imposing some kind of accountability on David Drumm is very convenient for the professional services firms that were connected to Anglo during its most turbocharged years.


And Ernst got away lightly the Equitable Life collapse some years back. They tried to GAG the report

http://www.telegraph.co.uk/finance/news ... eport.html

Once published they were fined a paltry sum in the end, probably a years audit fees.

http://www.telegraph.co.uk/finance/news ... lapse.html

Quote:
In 2008, the Accountant's Joint Disciplinary Scheme ruled that Ernst & Young and Mr McNamara were guilty of more than 20 instances of a "lack of professional competence" when auditing Equitable. It also found that they had been guilty of "a lack of objectivity and independence", which it found to be "the most serious" of the allegations.

However, the ruling over objectivity and independence was overturned at appeal. This led to the tribunal on Friday reducing the original fine of £4.2m and £5.75m costs imposed.

Ernst & Young said it welcomed the latest ruling, which also threw out complaints relating to eight of the 11 years accountancy firm audited Equitable.

In a statement, Ernst & Young said: "Any lessons from our audit of Equitable have long been learned and embedded in our audit systems and procedures. We extend our sympathies to the policyholders of Equitable Life, who have been impacted by the near-collapse of the society, following events which lay well outside of our control and the remit of our role as auditor."


Embedded My Hole :( You lost Lehmans just before you lost Anglo lads :(

Mind you KPMG produced this thing of beauty about the INBS in April 2009 while Fingers was still there ....just about.

http://www.google.ie/url?sa=t&source=we ... sjPlPzRhsg

_________________
SEO Ireland. SEO Dublin.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 4:57 pm 
Offline
Too Big to Fail

Joined: Feb 21, 2008
Posts: 4009
2Pack wrote:
http://www.rte.ie/news/2011/0415/anglo.html

We of the Pin may have to make a specific complaint or two so does anybody have John Purcells email address handy :(

Quote:
Accountancy firm Ernst and Young has taken High Court proceedings aimed at halting an investigation into its conduct as auditors of Anglo Irish Bank.

Lawyers for the firm told the High Court this morning they wanted to stop the process involving the special investigator John Purcell who was appointed by the Chartered Accountants Regulatory Board.

The court was told the firm had been co-operating with the investigation but as recently as the end of last month discovered that no actual complaint had been made against it as is required under by-laws governing the process.

Counsel for Ernst and Young Paul Sreenan said when they sought clarification on the exact nature of the complaint of misconduct being investigated, they discovered that no clear issue had been identified.

Instead, the investigator's initial findings merely referred to media reports, he said.

In order to respond to the investigator's initial findings, the company must be allowed to know what rule or regulation they were supposed to have broken, Mr Sreenan said.

Ernst and Young is seeking a court order to quash the decision of the Institute of Chartered Accountants to appoint the special investigator.



Sounds like the CARB "investigation" is little more than kabuki. Go through the motions long enough to compromise any future substantial criminal investigation and then have it stopped near the end on a technicality. Thats how "self regulation" of professional cartels work. And is suppose to work.

Well lets see. Were n't Ernst and Young the auditors who signed off on Anglos completely fraudulent annual accounts pre 2009? The fact that after nationalization Anglos interim public a/c's of 2009 and all subsequent full public a/c's completely repudiate (in polite terms, restate) pretty much everything that Ernst & Young seemed so happy to sign off on. You dont go from 1B profit to 30B in losses just because a property bubble burst. From the restated a/c's it looks like Ango was so grossly mismanaged that it would have gone bust even if there had been a soft landing. Is nt that what outside auditors are suppose to flag? Their statutory responsibility? I know the dirty like secret of auditors is that they usually send clueless juniors out with advanced qualifications and little grasp of basic book keeping. So they are obsessed with trivia and have little or no forensic skills. Items that would be flagged by someone with even basic night class booking keeping skills just sails straight passed them. And the people paying their salaries like to keep it that way.

I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.

Enough evidence in the public domain already to start handing down criminal and civil indictments.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 5:58 pm 
Offline
Under CAB Investigation

Joined: Jun 5, 2008
Posts: 1997
Location: I like Dalkey
jmc wrote:
I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.

Enough evidence in the public domain already to start handing down criminal and civil indictments.

Just 3 words explain an awful lot in life:

* This
* is
* Ireland

It's a phase I use quite a lot.......

_________________
.
Housing should be affordable and plentiful.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 6:14 pm 
Offline
Nationalised

Joined: Sep 29, 2010
Posts: 8011
Location: London, innit
jmc wrote:

I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.

Enough evidence in the public domain already to start handing down criminal and civil indictments.



EY signed off on the Anglo Accounts which stated "We've borrowed a load of money on short term markets and lent it to speculative property developers and Sean Quinn at higher than normal rates". For a LONG time markets said "Sounds good guys!"

Enron's accounts which AA signed off on used bogus mark to market accounting (normally used to value liquid securities) to value future projects as assets based on Enron's expectations of revenues and using Enron stock to fund off balance sheet entities while using krazy hedges which involved using Enron Stock to hedge against falls in Enron share price falls

see: http://www.amazon.co.uk/Conspiracy-Fool ... 12&sr=1-10

ILP deposit shenanigans and the share price support scheme don't change the fact that it wasn't EY's job to judge how bad the loans turned out to be.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 7:10 pm 
Offline
Too Big to Fail

Joined: Feb 21, 2008
Posts: 4009
slasher wrote:
jmc wrote:

I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.

Enough evidence in the public domain already to start handing down criminal and civil indictments.



EY signed off on the Anglo Accounts which stated "We've borrowed a load of money on short term markets and lent it to speculative property developers and Sean Quinn at higher than normal rates". For a LONG time markets said "Sounds good guys!"

Enron's accounts which AA signed off on used bogus mark to market accounting (normally used to value liquid securities) to value future projects as assets based on Enron's expectations of revenues and using Enron stock to fund off balance sheet entities while using krazy hedges which involved using Enron Stock to hedge against falls in Enron share price falls

see: http://www.amazon.co.uk/Conspiracy-Fool ... 12&sr=1-10

ILP deposit shenanigans and the share price support scheme don't change the fact that it wasn't EY's job to judge how bad the loans turned out to be.


One of the funny things about Enron was that when they finally unraveled the (deliberately) obtuse accounting mess and restated their account using more normal account practices it actually was still profitable. It looked more like incompetence rather than criminal intent is what had sunk them. On a scale of 1 to 10 I'd rate the shenanigans at Enron a 3. If they had not made it so damn complicated and then got tripped up in their own web of deceit they would still be trading today.

Its not just borrow short lend long that did in Anglo. It went a hell of a lot deeper than that. That is why I referred to their private a/c's. I'm sure a proper forensic investigation would turn up some real gems. What we learned from the S&L debacle, and more recently the Lehman Bros Chapter 7 report, is that the public a/c's of failing institutions engaged in criminal behavior seem to follow to same kind of patterns. If you look at the public a/c's for Anglo 2004-2008 and then look at what has been publicly restated 2009 onwards this does not look like the record of a bog standard bank that suffered a liquidity crunch.

But as someone else pointed out, this is Ireland. So we will find out. Eventually. When it no longer matters.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 8:35 pm 
Offline
Nationalised

Joined: Sep 29, 2010
Posts: 8011
Location: London, innit
jmc wrote:
One of the funny things about Enron was that when they finally unraveled the (deliberately) obtuse accounting mess and restated their account using more normal account practices it actually was still profitable. It looked more like incompetence rather than criminal intent is what had sunk them. On a scale of 1 to 10 I'd rate the shenanigans at Enron a 3. If they had not made it so damn complicated and then got tripped up in their own web of deceit they would still be trading today.

Its not just borrow short lend long that did in Anglo. It went a hell of a lot deeper than that. That is why I referred to their private a/c's. I'm sure a proper forensic investigation would turn up some real gems. What we learned from the S&L debacle, and more recently the Lehman Bros Chapter 7 report, is that the public a/c's of failing institutions engaged in criminal behavior seem to follow to same kind of patterns. If you look at the public a/c's for Anglo 2004-2008 and then look at what has been publicly restated 2009 onwards this does not look like the record of a bog standard bank that suffered a liquidity crunch.

But as someone else pointed out, this is Ireland. So we will find out. Eventually. When it no longer matters.



I wouldn't claim to know the details of Anglo's restated profits but I think you're way off about Enron merely being about incompetence. The book I mentioned portrays Skilling and Ken Lay as incompetent but Fastow was thoroughly crooked (though incompetent also) as was Michael Kopper.

They certainly had some profitable trading division but they sank boatloads of cash into water projects in the UK (simply overpaid for moderately profitable company) and had some ludicrous power plant in India that hoovered up cash.

Covering up but booking projects as profitable straight away was where AA tripped up as well as the off balance sheet. The AA Audit partner got waaay to close and was almost more loyal to Enron


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 8:48 pm 
Offline
Too Big to Fail

Joined: Jun 21, 2010
Posts: 3052
I don't see the point in audit as a product.
I don't know what could replace it - but I don't see the point of tinkering around with it either.
It's just a failure.

I recall from my audit days that if a director misleads you it's a bit of a get out of jail free card.
So maybe some expanded personal liability for directors would help?
But that would just be more tinkering. The audit product itself is just a failure. Not fit for purpose.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri Apr 15, 2011 10:01 pm 
Offline
Nationalised
User avatar

Joined: Feb 9, 2010
Posts: 9019
Kate P wrote:
If the report is correct it was a pretty massive slip up.

When 'slip-ups' as massive and as obvious as this happen, the cynic in me wonders whether they launched the investigation in the absence of a complaint knowing that it would later fall over for exactly that reason.


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Sat Apr 16, 2011 12:14 am 
Online
Of Systemic Importance

Joined: Jun 9, 2008
Posts: 7018
jmc wrote:
Sounds like the CARB "investigation" is little more than kabuki. Go through the motions long enough to compromise any future substantial criminal investigation and then have it stopped near the end on a technicality. Thats how "self regulation" of professional cartels work. And is suppose to work.

Well lets see. Were n't Ernst and Young the auditors who signed off on Anglos completely fraudulent annual accounts pre 2009? The fact that after nationalization Anglos interim public a/c's of 2009 and all subsequent full public a/c's completely repudiate (in polite terms, restate) pretty much everything that Ernst & Young seemed so happy to sign off on. You dont go from 1B profit to 30B in losses just because a property bubble burst. From the restated a/c's it looks like Ango was so grossly mismanaged that it would have gone bust even if there had been a soft landing. Is nt that what outside auditors are suppose to flag? Their statutory responsibility? I know the dirty like secret of auditors is that they usually send clueless juniors out with advanced qualifications and little grasp of basic book keeping. So they are obsessed with trivia and have little or no forensic skills. Items that would be flagged by someone with even basic night class booking keeping skills just sails straight passed them. And the people paying their salaries like to keep it that way.

I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.

Enough evidence in the public domain already to start handing down criminal and civil indictments.


CARB is a joke alright. Self regulation is no regulation.

In relation to Anglo, you have to remember a few things in relation to the accounts and losses that were different this time :P

1. Explosive loan growth from 17B to 72B at 18 times leverage between 2003 and 2008 (ie shareholders funds from 1 to 4B).

2. Anglo liked every flavour except vanilla.

3. The auditors simply follow the rules to be off the hook. Their role is to sign off on the assets and liabilities largely. The rules do not require them to be valuers - rather they use third parties to support asset valuations. This is not saying they did an ok job or had reasonable judgement but it will make prosecution well nigh impossible.

As an auditor, if I dont like what a client is doing, I just resign. But I dont have to decide to resign from big fees.

By the way, not sure whether in relaiton to E&Y or PWC but all of the responsible individuals for one of the banks were fucked out of the firm.

4. Accounting rules meant:

- Have a valuation supporting an asset on a roll up? fine.
- The mark to market rule change meant no general provisions while valuations were increasing. Stupid fucking rule in a completely leveraged long-cyclical sector like finance.
- Loan "Arrangement Fees" capitalised onto new loans allowed income up front at no cost to the client. (How real was that 3B profit between 2003 and 2008)

5. Shabby regulation. Concerns without action.

_________________
“Don't ask the barber if you need a haircut—and don’t ask an academic if what he does is relevant.” Nassim Nicholas Taleb


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Sat Apr 16, 2011 12:37 pm 
Offline
Under CAB Investigation

Joined: Feb 20, 2007
Posts: 1633
Location: Dublin
I'm hoping for a WGU take on possibly:

The Importance of Being Ernst & Young !
(featuring possibly a large handbag... a handbag !)

or

Er(e)nst & Young's Book-keeping Mis- Adventure

:mrgreen:


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Sat Apr 16, 2011 1:11 pm 
Offline
First Time Buyer

Joined: Aug 28, 2010
Posts: 99
Location: Dublin
laughinglawyer wrote:
I'm hoping for a WGU take on possibly:

The Importance of Being Ernst & Young !
(featuring possibly a large handbag... a handbag !)

or

Er(e)nst & Young's Book-keeping Mis- Adventure

:mrgreen:



or


Ernst and Young Go to Jail


Image


Top
 Profile  
 
 Post subject: Re: You Can't Do This, we're Ernst and Young
PostPosted: Fri May 13, 2011 3:38 pm 
Offline
Real Estate Developer

Joined: Dec 5, 2007
Posts: 929
E&Y investigation to continue

Quote:
Accountancy firm Ernst & Young has lost its High Court bid to halt the investigation into its conduct as auditors to Anglo Irish Bank when dealing with alleged inappropriate loans to directors of the bank.

Ms Justice Mary Irvine ruled today the firm was out of time and had shown no arguable grounds entitling it to bring proceedings to "effectively torpedo and thus fatally terminate" the two year investigation by special investigator John Purcell, appointed by the Insititute of Chartered Accountants (ICAI) regulatory body (CARB) in early 2009.

She also ruled the firm had advanced no arguable case for proceedings to prevent a report by forensic accountants FTI into the conduct of Ernst & Young as auditors to Anglo being forwarded to CARB in the event of a finding by Mr Purcell of a prima facie case that Ernst & Young is liable to disciplinary action.


http://www.irishtimes.com/newspaper/bre ... ing40.html


Top
 Profile  
 
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 50 posts ]  Go to page 1, 2, 3, 4  Next


Who is online

Users browsing this forum: oasis and 12 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum

Jump to: