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(UPDATE) Canadian Officials Not Impressed with Ernst & Young’s Audits of Sino-Forest

Up until this point, Ernst & Young has seemed perfectly content to see how this Sino-Forest situation (some have called it a "Ponzi scheme") would play out, standing quietly by their audit opinions without so much as a peep*.

Canadian regulators, possibly impatient with the radio silence, have decided that they'll open things up, as the Ontario Securities Commission has committed their feelings to paper, saying that E&Y “failed to perform sufficient audit work to verify Sino-Forest’s ownership of its most significant assets; failed to perform sufficient audit work to verify the existence of Sino-Forest’s most significant assets; and failed to undertake their audit work on the Sino-Forest engagement with a sufficient level of professional skepticism,” for its audits of the company for the years 2007-2010.

Put a little differently – "Really awful, awful job, E&Y." 

Accordingly, the OSC's head of enforcement, Tom Atkinson, put all audit firms on notice that what they can expect when offer up this kind of effort, "If auditors fail to abide by Canadian auditing standards and securities laws, we will hold them accountable."

Consider yourselves on notice.

*UPDATE: Not exactly accurate, since E&Y resigned as Sino-Forest's auditor back in April because the firm “remained unable to satisfactorily address outstanding issues in relation to its 2011 financial statements.” That certainly qualifies as more than a peep. Apologies for leaving that out.

OSC accuses Ernst & Young of insufficient audits of Sino-Forest [FP]
OSC alleges Ernst & Young breached securities law [CBC]
OSC accuses Ernst & Young of improper Sino-Forest audit [Globe and Mail]