In another case of an auditor giving a Titantic-esque bank the ‘It’s not you, it’s me’ routine, E&Y resigned as the auditor of Corus Bankshares, Inc., in a filing late last Friday.
This one really had no chance. After the Chief Accounting Officer resigned after five months on the job, family shareholders continuing to dump their shares, and filing their Q late, you can’t really expect Ernie to stick around.
E&Y had given the going concern paragraph kiss of death on Corus’s audit opinion earlier in the year and according to the last amended quarterly filing, Corus had over $7 billion in assets but negative equity. So, nature seems to be taking its course. Chalk it up, She Bair.
Ernst & Young resigns as Corus’ accounting firm [Chicago Tribune]
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Bean Counter Obituary: Eli Mason, 1920-2009
Eli Mason, a driving force for the independence of accountants and an outspoken critic of large accounting firms, died last week at the age of 88.
He was a CPA for more than 60 years, starting his own firm in 1946 with two clients. He served on the NYS Board for Public Accountancy for ten years, including two as the chair. He was also the President of the NYS Society of CPA’s for 1972-1973.
According to the New York Times obituary:
Mr. Mason went to the business school of the City College of New York, where he studied accounting with Emanuel Saxe, a distinguished professor and one of the accounting world’s stars at the time. He graduated in 1940 and was a lifelong supporter of the college, now Baruch College of the City University of New York , where he endowed a chair for accounting in 1992 and financed the restoration of the school’s biggest auditorium, now called Mason Hall.
More, after the jump
Mr. Mason was taking on the big firms before most of us were born:
In 1979, he helped found the National Conference of C.P.A. Practitioners, which consisted of 1,500 small firms, and became one of the profession’s most vocal critics of the big accounting firms, then known as the Big Eight. In particular he resented the practice he referred to as lowballing, or aggressively cutting prices, sometimes below cost, to attract new clients.
He also saw the danger of firms offering consulting services and the consolidation of the large firms when the mergers began in the 1980s:
He also spoke against the industry’s mergers in the 1980s, which reduced the number of major firms to five, and he was critical of large firms that offered consulting services as well, fearing this would erode their independence from their clients. Many of his fears turned out to be justified later when the accounting scandals of Enron and WorldCom highlighted the cozy relationship between some of the world’s top accounting firms and the companies they were supposed to audit. Arthur Andersen was one, having been Enron’s accounting firm.
Mr. Mason was known as an accounting purist and earned the nickname “the conscience of the profession”, something we could certainly use more of. Follow this link to read an interview he did with the CPA Journal in 1999. He will be missed and our condolences go out to his family.
Eli Mason, 88, Outspoken Accountant, Is Dead [New York Times]
Footnotes: Who Knew Madoff Was a Liar?; Shorting War; Happy Face! | 03.03.14
Bernie Madoff lies about Wall Street fraud in videos played at workers’ trial [NY Daily […]
The Government Accountability Office Does a Great Job, Says the Government Accountability Office
We don’t envy anyone working at the GAO. Telling Congress how badly they spend money and then telling the whole world about it (even though no one listens) sounds like a pretty thankless job.
So the fact that the GAO gave itself an “A” on its performance review shouldn’t come as a surprise to anyone. Who else was going to the give them the performance review? Plus if you’re regularly known as the “Taxpayer’s Best Friend” then we think you can be trusted with the honor system.
In fiscal year 2009, GAO met or exceeded all of its performance targets by, for example, identifying $43 billion in financial benefits–a return of $80 for every dollar GAO spent–and over 1,300 improvements in laws and government programs and operations. The rate at which GAO’s recommendations were implemented by federal agencies or the Congress was 80 percent, and over two-thirds of the products issued contained recommendations. During fiscal year 2009, the GAO met or exceeded all of its performance targets and made recommendations that resulted in “over 1,300 improvements in laws and government programs and operations.
To be perfectly honest, that does sound pretty damn impressive. Trying to make any sense of the ins and outs of the federal government isn’t something that we would wish upon our worst enemy.
If you’re still skeptical of the GAO stellarness, you’ll be happy to know that it was recently ranked #2 in the best places to work in the federal government. Now before you dismiss this silver medal, this isn’t some hack job put out by Fortune; this is something that is only issued every two years, by the Partnership for Public Service. We’re not saying that it would be difficult to rank so high on such a list but it’s got to be worth something.
Summary of GAO’s Performance and Financial Information Fiscal Year 2009 [GAO.gov]
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