Comments on: Accountants in the firing line A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: ScottVE Tue, 28 Dec 2010 17:57:07 +0000 I agree with your general criticism that accounting firms need to work on their PR and that maybe more upfront cooperation with Cuomo would’ve yielded an ally further down the line.

But I have three disagreements with the above post;

1) The E&Y-Lehman suit was a foregone conclusion, even moreso after the Valukas report (which stated there was evidence of a colorable claim, which, in legalese, requires less presumption of wrongdoing than a civil or criminal charge). I have doubts that E&Y really could’ve avoided this lawsuit, and it is telling that only civil charges have been filed using expanded powers of the Martin Act.

2) The Main Stream Media’s coverage of accounting matters is, as you state, abysmal. But there is a reason why, accounting rules mirror those used in law, except tend to be more technical and thus, more boring. I see no attempt by the MSM to cover the particulars of accounting literature, or even the over-arching purpose – which is not to protect us from all failures or fraud, but to have some type of system of consistency in standards which is verified by an independant third party. E&Y will wage a losing battle trying to communicate this to the masses without assistence by an informed member of the MSM.

3) There are 4 major accounting firms auditing tens of thousands of companies and with 100k plus employees each. Cherry picking specific failures is no great accomplishment or evidence of general erosion of standards. In this case, the tax and audit divisions share little overlap in leadership or standards, and a couple failures are no implicit presumption to change the entire structure or internal workings of an organization.

By: jpe12 Sun, 26 Dec 2010 14:01:29 +0000 Agreed that the Bloomberg story sure looks bad, but that’s why I’d prefer to see more background on what the accounting standards. As is, it’s structured in kind of a slimy way: “PWC did something that looks horrible. *Some say* that it was perfectly OK under GAAP, but it really, really looks horrible.”

Or: it’s standard MSM journamalism, albeit brought to bear on a topic that doesn’t get much play elsewhere.