The REAL Untouchables:PWC,KPMG & Ernest & Young

Oldira1

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Why is it that the three main auditing firms in this country seem totally immune from the banking collapse and recession?
Sean Fitzpatrick tells Bank of Ireland that Anglo is insolvent in the same months the genuises in Ernest & Young give the bank a clean bill of health and declare a profit of €700 million.
PWC compile a report that puts the Anglo cost to the state at €4 billion. Wrong by about €30 billion.
KPMG were audiors to INBS while Fingers was on his rampage.
What penalty have those firms incurred? They have all been rewarded significant contracts to do with NAMA and the banking crisis. PWC have just recently been awarded another contract regarding the bank crisis. While the country has been made destitute these firms are literally making a fortune at the expense of the taxpayer.
While people are getting excercised over Ivors €3,000 in dodgy phone expenses these firms are charging staff out at this amount per DAY to provide 'advice' to the state. Any search of the banks advisors will find these three gangs involved intimately and yet they are now profiting in the aftermath. Its an obscenity.
 


beamish2010

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Bankers and Zanu-FF.

Why is it that the three main auditing firms in this country seem totally immune from the banking collapse and recession?
Sean Fitzpatrick tells Bank of Ireland that Anglo is insolvent in the same months the genuises in Ernest & Young give the bank a clean bill of health and declare a profit of €700 million.
PWC compile a report that puts the Anglo cost to the state at €4 billion. Wrong by about €30 billion.
KPMG were audiors to INBS while Fingers was on his rampage.
What penalty have those firms incurred? They have all been rewarded significant contracts to do with NAMA and the banking crisis. PWC have just recently been awarded another contract regarding the bank crisis. While the country has been made destitute these firms are literally making a fortune at the expense of the taxpayer.
While people are getting excercised over Ivors €3,000 in dodgy phone expenses these firms are charging staff out at this amount per DAY to provide 'advice' to the state. Any search of the banks advisors will find these three gangs involved intimately and yet they are now profiting in the aftermath. Its an obscenity.
That's because the bankers and Zanu-FF are both the one...They have both
fooked up this country big time...
 

firefighter

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I snigger to myself whenever I see the PWC bus around town.

Full of keeping up middle class appearances gimps on €17k a year doing "internships".
 

Nipper

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Self regulated , closed shop, politically connected etc etc.
 

polcol2

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I snigger to myself whenever I see the PWC bus around town.

Full of keeping up middle class appearances gimps on €17k a year doing "internships".
That maybe true but how many of these "gimps" are on €17k post their internships? Means to end.
 

collina

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Why is it that the three main auditing firms in this country seem totally immune from the banking collapse and recession?
Sean Fitzpatrick tells Bank of Ireland that Anglo is insolvent in the same months the genuises in Ernest & Young give the bank a clean bill of health and declare a profit of €700 million.
PWC compile a report that puts the Anglo cost to the state at €4 billion. Wrong by about €30 billion.
KPMG were audiors to INBS while Fingers was on his rampage.
What penalty have those firms incurred? They have all been rewarded significant contracts to do with NAMA and the banking crisis. PWC have just recently been awarded another contract regarding the bank crisis. While the country has been made destitute these firms are literally making a fortune at the expense of the taxpayer.
While people are getting excercised over Ivors €3,000 in dodgy phone expenses these firms are charging staff out at this amount per DAY to provide 'advice' to the state. Any search of the banks advisors will find these three gangs involved intimately and yet they are now profiting in the aftermath. Its an obscenity.
Far be it for me to stick up for the few Private Sector trash who instigated the Banking Crisis, but its near impossible for Auditors to detect conspiracy between separate entities. You'd have to be either lucky or tipped-off.

Auditors never give a "clean bill of health", they simply say whether or not what they are allowed to see is "true and fair". You can't see Bank Executives meeting-up in hotels at half-five to switch loan-books in the last day of the financial period, only to switch them back again at a minute-past midnight that night.
 

sandar

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the big acciountancy firms, the law and banking are all areas where oligopolic markets have developed....
vince cable highlighted this and the measures he wants to take to stop it in the UK, i have heard of no Irish politician advocating action
 

antsrathcam

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They are accountants. They audit your books for money.

If you think they broke your freely-entered-into contract, take them to court.

They didn't hand over a lot of money of money to developers and come crying to the Taxpayer when they weren't paid back.

Just because they wear suits doesn't make them guilty.
 

Future

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It is not the job of the auditor to detect fraud.

If there is collusion between employees or seperate entities it is extremely difficult to detect wrong doing.

Also if these organisations are deemed to have done wrong there is consequences. Remember Enron and Arthur Andersen?
 

Oldira1

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It is not the job of the auditor to detect fraud.

If there is collusion between employees or seperate entities it is extremely difficult to detect wrong doing.

Also if these organisations are deemed to have done wrong there is consequences. Remember Enron and Arthur Andersen?
We are not talking about fraud here. We are talking about the fact that auditors give an opinion on the state of the companys books and whether the company is a going concern. Clearly in September 2008 Anglo had dodgy books and was insolvent yet this totally escaped their auditors. Now at the very least this denotes incompetence which should disqualify them from government work at the very least.
Aloso regarding the Seanie Fitz loans.. KPMG did notice these loans on the books of INBS and warned their clients about this but the smart alecs in E & Y did not notice them in their clients books. Either Ernest & Young were lied to or else they were complicit in the cover up. These guys were paid €6 million a year. Hardly peanuts.
 

Oldira1

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Far be it for me to stick up for the few Private Sector trash who instigated the Banking Crisis, but its near impossible for Auditors to detect conspiracy between separate entities. You'd have to be either lucky or tipped-off.

Auditors never give a "clean bill of health", they simply say whether or not what they are allowed to see is "true and fair". You can't see Bank Executives meeting-up in hotels at half-five to switch loan-books in the last day of the financial period, only to switch them back again at a minute-past midnight that night.
Anglo was in trouble in early 2008. Are you saying the auditors knew nothing of this? The markets knew Anglo was failing yet this passed by the auditors.
 

Right is right

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Anglo was in trouble in early 2008. Are you saying the auditors knew nothing of this? The markets knew Anglo was failing yet this passed by the auditors.
Why don't you actually research what auditors do and what they are supposed to do before throwing out allegations.
 

dpbdpb

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Anglo was in trouble in early 2008. Are you saying the auditors knew nothing of this? The markets knew Anglo was failing yet this passed by the auditors.
The auditors signed off on Anglo's accounts for the year ended 30 Sept 2007 in 2008. Probably in early 2008.

Anglos main problem now is that the collateral (land and property prices) that it held against its loans is worth less than the loans, ie the land and buildings have decreased value. None of the Big 4 auditors are property experts, so when they are reviewing loans and loan security they/the bank will engage property experts (Jones Lang LaSalle, Savilles, Gunne etc) to give a valuation on the underlying property. So if a property expert says that a site is worth 20m and market transactions support this value then who are the auditors to challenge this opinion as its not their field. So the accounts for Sept 2007 were probably correct based on the advice available at that time.
 

Libero

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collina said:
Auditors never give a "clean bill of health", they simply say whether or not what they are allowed to see is "true and fair".
And when they do give a formal opinion, the list of qualifications often reads longer than the content of the opinion.

It's true that many of the public don't understand the formal role of auditors. The profession refers to this as the audit expectation gap.

However, I can see another expectation gap out there. It's the gap between the following:
(1) how we'd expect a proud, independent profession to act when it's revealed that its members were subject to brazen and systematic deception by corporate officers;
(2) how the Irish audit industry has actually reacted to the revelations.

If ever it was in doubt, it's been established that the industry can't be trusted to work on a basis where audit work is paid for by clients. Ethics and standards come way, way behind the imperative of fees.

At a mimimum, credit institutions should not be able to select and pay their own auditors.

That urgent need can't be obviated by patronising references to how the public doesn't understand the role of auditors.
Especially not when a major audit firm with questions to answer, E&Y - auditors of Anglo - decline to attend a Dáil committee and explain away any such expectations gap. And when they do so without censure or even critical comment by fellow auditors.
 

Oldira1

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Why don't you actually research what auditors do and what they are supposed to do before throwing out allegations.
I know very very well what auditors do. You obviously do not.

http://mpra.ub.uni-muenchen.de/6828/1/MPRA_paper_6828.pdf

Auditors are not expected to detect fraud unless MATERIAL TO THE ACCOUNTS.

We are not talking about embezzling the petty cash box here.

In any case I have made no allegations other than raised legitimate questions.
 

Own Arris

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Why is it that the three main auditing firms in this country seem totally immune from the banking collapse and recession?
Sean Fitzpatrick tells Bank of Ireland that Anglo is insolvent in the same months the genuises in Ernest & Young give the bank a clean bill of health and declare a profit of €700 million.
PWC compile a report that puts the Anglo cost to the state at €4 billion. Wrong by about €30 billion.
KPMG were audiors to INBS while Fingers was on his rampage.
What penalty have those firms incurred? They have all been rewarded significant contracts to do with NAMA and the banking crisis. PWC have just recently been awarded another contract regarding the bank crisis. While the country has been made destitute these firms are literally making a fortune at the expense of the taxpayer.
While people are getting excercised over Ivors €3,000 in dodgy phone expenses these firms are charging staff out at this amount per DAY to provide 'advice' to the state. Any search of the banks advisors will find these three gangs involved intimately and yet they are now profiting in the aftermath. Its an obscenity.
+1 Good Post

Judging by some of the replies to your OP, in which posters defended auditors, we can now assume three things

1. Auditors have a margin of error of four billion percent

2. Auditors reports do not reflect the 'real world' , they reflect the fantasy world concocted by their clients.

3. Auditors operate in an oligopoly
 

Nipper

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Govt have been refusing to tackle anti competitive practices in accountancy and law professions for years
 

Verhofstadt

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And when they do give a formal opinion, the list of qualifications often reads longer than the content of the opinion.

It's true that many of the public don't understand the formal role of auditors. The profession refers to this as the audit expectation gap.

However, I can see another expectation gap out there. It's the gap between the following:
(1) how we'd expect a proud, independent profession to act when it's revealed that its members were subject to brazen and systematic deception by corporate officers;
(2) how the Irish audit industry has actually reacted to the revelations.

If ever it was in doubt, it's been established that the industry can't be trusted to work on a basis where audit work is paid for by clients. Ethics and standards come way, way behind the imperative of fees.

At a mimimum, credit institutions should not be able to select and pay their own auditors.

That urgent need can't be obviated by patronising references to how the public doesn't understand the role of auditors.
Especially not when a major audit firm with questions to answer, E&Y - auditors of Anglo - decline to attend a Dáil committee and explain away any such expectations gap. And when they do so without censure or even critical comment by fellow auditors.
Good post.

Auditors have in recent years proved to worse than useless, auditing should be separated 100% from accountancy firms who earn fees through other work. .the chinese walls are obviously no even paper thin as these firms have proven that they will not stick their neck out on an audit for fear of upsetting the nice line of fees from other services such as advice on tax avoidance, share bonus schemes, pension schemes etc that have assisted the likes of Sean Fitzpatrick to gild their nests..
 

Goodbody

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In the US, Enron's audit firm Arthur Andersen was sued into bankruptcy by Class Action claims from Enron's creditors. I've wondered why Irish accountancy and law firms have remained untouched by class action lawsuits against them. Someone told me they're not allowed here.
 


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