The REAL Untouchables:PWC,KPMG & Ernest & Young

Libero

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leroy42 said:
The problem, as mentioned earlier in the thread is the audit expectation gap.
Nah. Plenty of us understand the statutory role of the auditor in Ireland. And we can see that the real problem is an industry that puts fees ahead of just about every other concern.

How can auditors expect the public to respect them when, after clear evidence that various corporate officers misled auditors again and again and again, virtually no action is taken on behalf of the auditors? When its crystal clear that corporate Ireland will give auditors the full ass to mouth treatment, and the auditors will say nothing for fear of upsetting its client base?

Was Sean FitzPatrick quivering when John Purcell was sent in by the accountancy profession to report on his activites? What's come of that, all these months later?

Ernst & Young had a perfect opportunity to clarify any audit expectation gap when invited before a Dáil committee last year. The firm chose to hide behind legal advice, even though its client, Anglo Irish Bank, was now under state ownership and was not on record as objecting to any appearance.

Was that firm criticised by its fellow auditors for that stunt?

The rest of us will respect auditors as a profession when they start respecting themselves.
 


collina

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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.
Auditors pay no heed of the Markets. They look at paper and report on it. The banks hid the key papers by conspiring with one another.
 

Future

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Nah. Plenty of us understand the statutory role of the auditor in Ireland. And we can see that the real problem is an industry that puts fees ahead of just about every other concern.

How can auditors expect the public to respect them when, after clear evidence that various corporate officers misled auditors again and again and again, virtually no action is taken on behalf of the auditors? When its crystal clear that corporate Ireland will give auditors the full ass to mouth treatment, and the auditors will say nothing for fear of upsetting its client base?

Was Sean FitzPatrick quivering when John Purcell was sent in by the accountancy profession to report on his activites? What's come of that, all these months later?

Ernst & Young had a perfect opportunity to clarify any audit expectation gap when invited before a Dáil committee last year. The firm chose to hide behind legal advice, even though its client, Anglo Irish Bank, was now under state ownership and was not on record as objecting to any appearance.

Was that firm criticised by its fellow auditors for that stunt?

The rest of us will respect auditors as a profession when they start respecting themselves.
As you say various corporate officers misled auditors again and again and again so under the Companies Acts this is punishable and is there not an investigation into this by the ODCE and the Garda fraud team?
 

Hewson

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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.
You might forgive a mickey mouse auditing firm an oversight of this magnitude. But the firms in question are world-class companies with branches in several countries and the best expertise in the business to call on. It should also be remembered that the seven billion Euro which inflated Anglo's bottom-line figures at year's end was hopping back and forth between that bank and ILP for SEVEN YEARS. Now maybe someone can tell me how THAT went under the radar of the best (allegedly) brains in accountancy.

That these same firms are being awarded Government contracts, paid for by us, speaks volumes about the people who govern this submerging mud-island.

I've been arguing for ages that our national priority, our primary goal, is the eviction from power of the present cartel who sit in Leinster House. Until Fianna Fail and the Greens are ousted nothing, but nothing, will even begin to start to come right.
 

Oldira1

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Nah. Plenty of us understand the statutory role of the auditor in Ireland. And we can see that the real problem is an industry that puts fees ahead of just about every other concern.

How can auditors expect the public to respect them when, after clear evidence that various corporate officers misled auditors again and again and again, virtually no action is taken on behalf of the auditors? When its crystal clear that corporate Ireland will give auditors the full ass to mouth treatment, and the auditors will say nothing for fear of upsetting its client base?

Was Sean FitzPatrick quivering when John Purcell was sent in by the accountancy profession to report on his activites? What's come of that, all these months later?

Ernst & Young had a perfect opportunity to clarify any audit expectation gap when invited before a Dáil committee last year. The firm chose to hide behind legal advice, even though its client, Anglo Irish Bank, was now under state ownership and was not on record as objecting to any appearance.

Was that firm criticised by its fellow auditors for that stunt?

The rest of us will respect auditors as a profession when they start respecting themselves.
The real scandal though is that they still are awarded state contracts relating to the banking sector!!!!
 

Fides

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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".
Was one of them myself over 20 years ago. The vast majority of trainees leave once they qualify, a minority stay on. When I went to work in business and was audited myself I realised how easy it would be to pull the wool over their eyes. We had no real life experience and basically ticked boxes. I have long argued audit practices should require managers and partners to have several years real industry experience and then bring them back in.

Btw our dream was to find something wrong. Auditing is seriously boring and the only excitement was finding something wrong with the accounts. Only happened to me twice in 6 years.
 

Libero

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As you say various corporate officers misled auditors again and again and again so under the Companies Acts this is punishable and is there not an investigation into this by the ODCE and the Garda fraud team?
What's your point?

Accountancy Ireland has launched an investigation of sorts into qualified accountant Sean FitzPatrick, in spite of all manner of other investigations being in train.

But what has come of this?

This crisis has presented the Irish auditing profession with a great opportunity to turn its back on that part of corporate Ireland that thinks nothing of misleading auditors.

But of course that might mean losing fees, and we can't have that.

All I can here is drivel about an expectations gap, as if it's the ignorance of the public that is the core problem.
 

Future

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The point I'm making is the DPP will eventually receive a file from the ODCE and the Garda fraud squad and he'll most likely be charged.

I understand that the ACA have commenced their own investigation into this as far back as early 09 but I'm sure their conscience of not wanting to prejudice any investigations being conducted by the Gardai.
 

Suetonius

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Let's call a spade a spade. Does auditing serve any useful purpose? Ireland is going through a banking collapse. All of the banking institutions that failed or needed public money to stay in business (i.e. AIB, Anglo, BOI, INBS and EBS) were audited by members of the Big Four, the brightest and the best of the international accounting franchises. None of these firms qualified the audit opinions they gave in the years leading up to the collapse. As far as they were concerned the financial statements of their clients showed a true and fair view. At the last count the balance sheets of these clients were shown to be overstated by around €50bn and the cost of rectifying the economic collapse this has brought on will probably bankrupt the State. In these circumstances how can anyone claim that the practice of auditing as carried on presently is in any way useful?
 

TODevastated

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I think a (4) might be Many of the posters here are members of or have links to the auditing profession.

I know exactly why one firm gets many state contracts but I know the DGDS rule.
you obviously have no idea what the function/purpose of an audit/auditor is!!

under the Companies Acts 1963-2009
i) it is the duty of the DIRECTORS of a company (not the auditors) to prepare the accounts
ii)to ensure that proper books of account are maintained, and
iii) to ensure that properly qualified persons are employed to carry out the maintenance of accounts on an on going basis

the auditor comes in and expresses an opinion on whether or not those accounts are a true and fair view as at the year end

there are also auditing standards and guidelines laid down to cover their work and a quango set up, IASSA, in a monitoring role
 

Fides

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Let's call a spade a spade. Does auditing serve any useful purpose? Ireland is going through a banking collapse. All of the banking institutions that failed or needed public money to stay in business (i.e. AIB, Anglo, BOI, INBS and EBS) were audited by members of the Big Four, the brightest and the best of the international accounting franchises. None of these firms qualified the audit opinions they gave in the years leading up to the collapse. As far as they were concerned the financial statements of their clients showed a true and fair view. At the last count the balance sheets of these clients were shown to be overstated by around €50bn and the cost of rectifying the economic collapse this has brought on will probably bankrupt the State. In these circumstances how can anyone claim that the practice of auditing as carried on presently is in any way useful?
To be fair this was based on the property valuations supporting the loans in most cases. Auditors were not the only ones buying into our property bubble. All our professional valuers and auctioneers did so too.

I would be curious to know how they passed the without recourse loans to do with Anglo shares and directors and the more imaginative schemes that INBS came up with.
 

dpbdpb

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You might forgive a mickey mouse auditing firm an oversight of this magnitude. But the firms in question are world-class companies with branches in several countries and the best expertise in the business to call on. It should also be remembered that the seven billion Euro which inflated Anglo's bottom-line figures at year's end was hopping back and forth between that bank and ILP for SEVEN YEARS. Now maybe someone can tell me how THAT went under the radar of the best (allegedly) brains in accountancy.

That these same firms are being awarded Government contracts, paid for by us, speaks volumes about the people who govern this submerging mud-island.

I've been arguing for ages that our national priority, our primary goal, is the eviction from power of the present cartel who sit in Leinster House. Until Fianna Fail and the Greens are ousted nothing, but nothing, will even begin to start to come right.

No, it was the 110 million loan to sean fitzpatrick that was going back and forth. This is on a loan book of 80 billion, so 0.14%. If the bank want to commit fraud and something its almost impossible to detect. Even if they did see this loan, I very much doubt this loan was in the name of Sean Fitzpatrick, more likely some company name which wouldnt mean anything to an auditor.

From a common sense point of view, how are a team of say 30 auditors meant to review the work of thousands of staffs work in a bank?

Propably the best way would be to separate the firms so that the audit business is spun off into a new company separate from the tax and advising companies.

Realistically there are only about 6 or 7 firms that are large enough to do the specialised work for the Government contracts so thats why they seem to win all of it.

Its the same in the legal profession, only about 5 or 6 firms would be big enough and specialised enough to handle the nama work.
 

TODevastated

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No, it was the 110 million loan to sean fitzpatrick that was going back and forth. This is on a loan book of 80 billion, so 0.14%. If the bank want to commit fraud and something its almost impossible to detect. Even if they did see this loan, I very much doubt this loan was in the name of Sean Fitzpatrick, more likely some company name which wouldnt mean anything to an auditor.

From a common sense point of view, how are a team of say 30 auditors meant to review the work of thousands of staffs work in a bank?

Propably the best way would be to separate the firms so that the audit business is spun off into a new company separate from the tax and advising companies.

Realistically there are only about 6 or 7 firms that are large enough to do the specialised work for the Government contracts so thats why they seem to win all of it.

Its the same in the legal profession, only about 5 or 6 firms would be big enough and specialised enough to handle the nama work.
notwithstanding your comments re the limited number of people capeable of doing work it is a sickener to see the same brigade make a fortune on the way back as what drove us to this mess!!
 

Hewson

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No, it was the 110 million loan to sean fitzpatrick that was going back and forth. This is on a loan book of 80 billion, so 0.14%. If the bank want to commit fraud and something its almost impossible to detect. Even if they did see this loan, I very much doubt this loan was in the name of Sean Fitzpatrick, more likely some company name which wouldnt mean anything to an auditor.
The Fitzpatrick loan was small beer and just another example of the rotten core at Anglo. The funds I was referring to are as quoted below.

'The major focus of the Garda’s investigation into Anglo centres on the lodging of €7.45 billion in deposits by Irish Life Permanent (ILP) over Anglo’s 2008 year-end, said Garda sources.'.
 

firefighter

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Btw our dream was to find something wrong. Auditing is seriously boring and the only excitement was finding something wrong with the accounts. Only happened to me twice in 6 years.
I'd say the driver of the PWC bus has more banter, is happier in himself (and has better pay and conditions) than many of the gimps in the back flicking through the pink pages and getting the morning brief on their blackberrys. One day, it could all come true. Until then, keep pawing at that carrot dangling in front of you.
 

Nipper

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Eu Commissioner for competition to look at Audit profession

EU commissioner intends to break dominance of 'Big Four' audit firms - The Irish Times - Thu, Oct 14, 2010

"EU INTERNAL markets commissioner Michel Barnier has called time on the dominance of the “Big Four” auditing firms, calling for more competition and diversity in the market for large audit contracts.


PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte & Touche dominate Europe’s audit market and each has significant operations in Ireland.

In a new consultation paper on reform of the sector, Mr Barnier questions how banks received a clean bill of health from their auditors immediately before the eruption of the financial crisis.

“The crisis has highlighted failings in the audit sector,” he told reporters yesterday. Calling for improvements, he said the discussion should be frank and open. “No subject should be taboo.”
 
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