Role of Auditors in Crisis Gets Look [WSJ]
Until this week when civil-fraud charges were brought against Ernst & Young LLP for its role in the collapse of Lehman Brothers Holdings Inc., auditors had largely side-stepped blame for the financial crisis.
Yet auditors had to pass judgment on some of the practices that caused the big losses that led to government bailouts. The case against Ernst highlights the roles accounting firms played and raises questions about whether reforms enacted after the last financial crisis went far enough.
Ernst & Young’s jujitsu defense [Colin Barr/Fortune]
The Ernst & Young statement suggests the firm will argue that it can’t be prosecuted under the Martin Act because Lehman, not E&Y, was the outfit actually producing the financial reports, and because it was Lehman, not E&Y, that was peddling billions of dollars of securities just months before its implosion. In this view, E&Y was just a gatekeeper hired to vouch for Lehman’s books, something it will claim it did well within the confines of the law. This strikes lawyers who are familiar with the law as an eminently reasonable approach, if not exactly a surefire recipe for success.
Crocs CFO resigns; shares slip [Reuters]
And the rubber shoes remain.
Monsanto names Courduroux to CFO post [Bloomberg]
And the bizarro food products remain.
Clifton Gunderson Acquires LA Forensic Practice [AT]
CG acquires Durkin Forensic with the deal effective January 1.
Paul Basso Joins PwC’s Risk Assurance Services Practice [PR Newswire]
PwC US today announced that Paul Basso has joined the firm as a partner in the Internal Audit Services practice. Basso joins PwC from Ernst & Young, where he was a principal leading the US Insurance Process and Controls practice. He will be based in Boston and will serve clients in the Northeast, which includes the firm’s offices in Boston, Hartford, Conn. and Albany, N.Y.
BDO signs firm partnership deal in Japan [Accountancy Age]
Toyo & Co and BDO’s existing firm Sanyu & Co will merge to form BDO Japan KK, the new member firm. Sanyu & Co was established in 1986 and joined BDO in 1996, while Toyo & Co was founded in 1971. The combined firm is expected to generate a fee income of €61m (£51.9m) for the year ending 2010.
Entrepreneurs Ask Santa for Loans, Lower Taxes [WSJ]
Loaded quote from the Journal, “Mark W. Smith, a founding partner of New York law firm Smith Valliere PLLC, has just one wish: lower taxes. ‘I lose half of my profits every year to taxes,’ he says. ‘They’re way too high and they’re hurting the growth of my business.’ “