Ernst & Young (EY) Oman has won the Auditors Cricket Tournament (Inter Audit firms) concluded recently. This is the fourth consecutive time that EY has won the Auditors Cricket Cup.
Your 2018 Auditors Cricket Cup champions
Yes, the Auditors Cricket Cup is a thing. And the EY squadron really took it to the competition this year, which included teams from PwC, Deloitte, KPMG, HC Shah, Ibn Hyan, and Crowe Horwath.
The first semifinal featured two powerhouses of the cricket pitch: EY and PwC. And Omar Sarfraz, a senior consultant at EY Oman, was a one-man wrecking machine against P Dubs:
EY won the toss and chose to field. EY bowlers restricted PwC to 61 runs in six overs.
In reply, EY achieved their target comfortably with nine balls to spare. The highlight of the match was six sixes in six balls by Omar Sarfraz of EY, who was declared Man of the Match and Man of the Tournament.
I guess Sarfraz’s “six sixes in six balls” is like Bryce Harper hitting six home runs on six pitches, so well done, Omar. Did anyone test this man for HGH before the match?
In the second semifinal, the ball-slappers and bowlers of KPMG outlasted HC Shah by four wickets, setting up an epic championship showdown between the Weinbergers and the Klynveldians.
KPMG won the toss and elected to bowl first and restricted EY to a modest total of 48 runs in six overs. In reply, EY’s bowlers held their nerves and bowled tight line which helped them to bowl out KPMG in 5.5 overs to lift the Auditors Cricket Cup 2018 title.
Pankaj Gupta, a tax manager from EY, was declared Man of the Match in the finals. And there’s no truth to the rumor that Mark Weinberger was the waterboy for the winning side.
The PCAOB has issued its annual report on Ernst & Young having given the firm the third degree at its national office and 30 of its 80 U.S. offices. It inspected 58 audits performed by the firm but exactly who is, of course, a big secret (unless you tell us).
There were five “Issuers” that were listed in the report and some form of the word “fail” was used 25 times (that includes the footnotes).
[Issuer A] The Firm failed to adequately test the issuer’s loan loss reserves related to certain loans held for investment. Specifically, the Firm failed to reconcile certain values used in the issuer’s models with industry data, failed to test the recovery rates used in the issuer failed to test the qualitative components of the reserves.
Damn those loan loss reserves!
[Issuer C] The Firm failed to perform sufficient procedures to test the issuer’s allowance for loan losses (“ALL”). The issuer determined the general portion of its ALL estimate, which represented a significant portion of the ALL, using certain factors such as loan grades. Data for this calculation were obtained from information technology systems that reside at a third-party service organization. The Firm relied on these systems, but it failed to test the information-technology general controls (“ITGCs”) over certain of these systems, and it failed to test certain of the application controls over these systems. Further, the Firm’s testing of the controls over the assignment and monitoring of loan grades was insufficient, as the Firm failed to assess the competence of the individuals performing the control on which it relied.
This loan thing appears to be a trend…
[Issuer D] The Firm failed to sufficiently test the costing of work-in-process and finished goods inventory. Specifically, the Firm’s tests of controls over the costing of such inventory were limited to verifying that management reviewed and approved the cost allocation factors, without evaluating the review process that provided the basis for management’s approval.
Hopefully that doesn’t blow back on an A1.
Anyway, you get the picture. The whole report is below for your reading pleasure. E&Y’s got its $0.02 in, however it was short and was mostly concerned about the firm’s right to keep its response to Part II (the non-public part)…non-public:
We are enclosing our response letter to the Public Company Accounting Oversight Board regarding Part I of the draft Report on 2009 Inspection of Ernst & Young LLP (the “Report”). We also are enclosing our initial response to Part II of the draft Report.
We note that Section 104(g)(2) of the Sarbanes-Oxley Act requires that “no portions of the inspection report that deal with criticisms of or potential defects in the quality control systems of the firm under inspection shall be made public if those criticisms or defects are addressed by the firm, to the satisfaction of the Board, not later than 12 months after the date of the inspection report.” Based on this statutory provision, we understand that our comments on Part ii will be kept non-public as long as Part ii of the Report itself is non-public.
In addition, we are requesting confidential treatment of this transmittal letter.
So this doesn’t mean much other than E&Y would prefer that no one know how it managed to tell the PCAOB to fuck right off as nicely as it could.
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