Follow the politicians, auditors, and lawyers...

[WhiskeyGirl]

The leadership of the Big 4 audit firms – Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers – are scared witless. The auditors prefer to be Switzerland. That is, they prefer to remain neutral.  They don’t like the kind of attention that Ernst  & Young is getting.  They like the soft, managed, scripted  kind of attention for Davos, diversity, charitable endeavors and support of higher education.

For some reason, nobody seems to be looking into the actions or non-actions of the auditors - internal, external, and government...

The Lehman Bankruptcy Examiner threw the word “fraud” into the financial crisis conversation.

The words “auditor malpractice’” followed.

It’s quite likely EY will be called before the US House Oversight Committee to testify about the Lehman bankruptcy. David Einhorn, a member of the much maligned “short club,” will probably be called to testify, too.

I criticized Ernst & Young in mid-2008 for not questioning Lehman’s CFO revolving door. Lehman had chosen another non-CPA CFO, the second one in less than three years. I was following the lead of another Cassandra, David Einhorn. Einhorn is now being heralded because he questioned Lehman’s accounting, in spite of being ridiculed and damned for it at the time. He’s getting almost as much applause as the “whistleblower” du jour, Matthew Lee.

Einhorn has also recently been vindicated in another case where he called foul and faced harsh criticism.

Sources tell me that the SEC Inspector General’s report on the Allied Capital investigation paints an even worse picture of the SEC than those involved ever expected.  For example, it was the SEC lawyer who grilled Einhorn that later became a lobbyist for Allied and was the one who hired private investigators to steal Greenlight Capital’s phone records. Allied Capital’s auditor is KPMG. They are not yet accused of any wrongdoing, but the report also discusses the mis-valuations that Allied was originally accused of by Greenlight.

I wonder why Obama doesn't prevent former government folks from becoming lobbyists for those with cases/interests under the government headlight?  Maybe the headlight in Washington is broken or blocked out?

more here - http://retheauditors.com/2010/03/23/for-the-auditors-nothings-over-until-its-over-or-is-it/

Another job rotation?  SEC --> FIRMS ---> ???

This is why there is no meaningful reform under Obama.  To many job rotations and conflicts of interest.

Where is Glass-Steagal?  Where is 'just say NO' to derivatives?  Ending the conflicts of interest and job rotation between the Federal Reserve, Treasury, Wall Street, Goldman and the White House.

jmho