LinkBack URL
About LinkBacksWhen there was cross collateralisation on the same property, yes. They let the big guys away with murder and hounded the small guy.Originally Posted by Morte
When there was cross collateralisation on the same property, yes. They let the big guys away with murder and hounded the small guy.
"No one rules if no one obeys" - Tao
Should E&Y not have picked up on the 4,000,000,000 Anglo lent to IL&P, and then received back as a customer deposit to massage the books?
How many Anglo customers were giving the bank 4,000,000,000? An auditor worth his salt should have investigated this.
Of course, if there was dodgy bookings going on, and Anglo did not book it as a straight 4,000,000,000 deposit the auditors may not be culpable.
We have turned the corner.I commend this Budget to the House. Brian Lenihan, 9 December 2009
Comment on the Telegraph site:
Accountants and legal advisers are put in a difficult position here where the main pressures are to retain lucrative clients. Only in exceptional (and costly) circumstances (Enron, Lehman and Worldcom) are these shown to lead to actions that are if not legally wrong then at least ethically wrong. This must happen in 100s if not 1000s of circumstances and shareholder/ creditor redress is only achieved when the problems explode into the open.
This requires more onerous requirements of professional services firms to produce work that is substantively right rather than substantively at management's direction. These problems simply will not go away until people look at the incentive strutures and regulate around that rather than create more useless and costly rules a la Sarbox. It is tiresome reading these stories because it is so predictable that they arise from current incentive structures.
People scoff about salesmen who were incentivised to sell subprime with bonuses - the reality is that professional services firms are frequently no better.
The Origins of Lehman’s ‘Repo 105’ - DealBook Blog - NYTimes.comas the examiner’s report ultimately lays out, Lehman executives acknowledge a certain cosmetic quality to Repo 105, as the following e-mail exchange shows:
“It’s basically window-dressing.”
“I see … so it’s legally do-able but doesn’t look good when we actually do it? Does the rest of the street do it? Also is that why we have so much BS [balance sheet] to Rates Europe?”
“Yes, No and yes.”
Last edited by He3; 14th March 2010 at 04:18 PM.
I certainly don't mean to suggest that there are no problems with the current auditing model. But citing a few questionable incidents doesn't show that these failures were responsible for the worldwide collapse of the financial system. That happened because, both here and worldwide, there was an explosion in credit and lending to projects that were unproductive. Excess construction and consumer spending mainly. The information about this was widely available, everybody knew what was happening. Most just chose to ignore it and to let the good times roll.
[ame="http://www.youtube.com/watch?v=9IRqwhxlarU"]YouTube- Lehman Brothers, the next Enron[/ame]
It was ZEAL like this that got Spitzer busted. He was the only one outed with the hookers.
The evidence against Geithner and the others is right there.
Don't hold your breath on the DA being as eager as Spitzer was
Recent Discussions - Real Irish Politics Forums
Hell of a big "if". Lehman's was the last 2 inches of a 20 storey fall. Fatal, but inevitable from, at the latest, mid-2007.
None of which is to say that E&Y don't have questions to answer re Anglo.
"All employment is outright robbery" says Cael, the voice of reason
I never suggested that E&Y's failure to spot the 4,000,000,000 transaction caused the worldwide collapse of the financial system.
But, if they failed to spot this, it was a failure in their responsibilty to Anglo's shareholders.
*I am not claiming that E&Y did fail in their responsibility as the possibility is there that Anglo did not book the deposit of 4,000,000,000 correctly.
We have turned the corner.I commend this Budget to the House. Brian Lenihan, 9 December 2009
My post was a response to those suggesting that the financial crisis was caused by failures in the auditing system. There are problems with auditors but I don't think they played any great role in what happened to the overall system.
Reply With Quote