September 25, 2022

Accounting News Roundup: Vague Fortune 500 Predictions; Grant Thornton Restructures IT; EY at Trial Over Madoff Losses | 10.15.15

Deloitte CEO: The Fortune 500 will look a lot different in 10 years [Fortune]
Apparently Cathy Engelbert interviews new hires (?) and she likes to ask them what the F500 will look like in 10 years. When she was asked the question herself at Fortune's Most Powerful Women Summit, she gave an elegantly non-specific answer, as the title suggests. Also! There's a fun portmanteau in this article: "co-opetition" which is supposed to mean that companies in the future won't compete or cooperate but…oh, brother, I don't even know.

MetLife Declines After Accounting Blunder Tied to Annuities [Bloomberg]   
An analyst says two "seemingly one-off items" — a botched risk-based capital ratio disclosure and $792 million in tax expenses to a UK subsidiary — will knock $1.5 billion off the company's excess capital. Accounting can move mountains…of capital!

Grant Thornton to restructure IT department [Charlotte Observer]
The firm sent a memo to employees stating that it was partnering with Capgemini to implement "technology capabilities that are more in line with industry best practices." GT has about 130 IT people and hasn't ruled out layoffs. 

Investor Seeks to Hold Ernst & Young Liable for Madoff Losses [WSJ]
Steven Thomas, a litigator well known for aggressively going after Big 4 firms, has EY in his sights for a trial in Washington state:

“I’m going to prove to you that Ernst & Young had a job. I’m going to prove to you that Ernst & Young didn’t do their job,” said Steven W. Thomas, a lawyer representing FutureSelect Portfolio Management Inc.

Court papers show FutureSelect, of Redmond, Wash., invested approximately $200 million in feeder funds that pooled investors’ cash and funneled it Mr. Madoff’s way, until his arrest in 2008 exposed a massive Ponzi scheme in which investors lost some $17 billion.

In 2010, FutureSelect, which lost all of its investment, filed suit in a court in Washington state against Ernst & Young, one of the feeder funds’ auditors, alleging negligence and seeking to recover millions of dollars in losses.

EY's lawyer countered with, "Ernst & Young did its job, full stop," although Mr. Thomas told the jury that EY "failed to perform such essential auditing tasks as confirming the existence of the securities" so this could be fun, especially since it's been dragging on for a while. The trial will last about a month.

EY FSO BAP or KPMG Deal Advisory [Open Items]

In other news:

  • Daily fantasy sports is in trouble. [NYT]
  • Free MBAs at Arizona State. [WSJ]
  • Square is going public. [NYT, S-1]
  • Our old pal Terry Johnson seems to be abiding by his recent settlement. [Auditor Carousel]
  • Being ‘wasted’ on Facebook may damage your credit score [FT]

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