I wonder how many bn the EU economy would save every year if Big Four companies were banned everywhere.
EY gets banned from new audit business in Germany
81–90 of 303 posts
Re: EY gets banned from new audit business in Germany
#82TBH, I don’t understand why anyone would be naive enough to hire EY and then actually trust them.
Re: EY gets banned from new audit business in Germany
#83EY, Mckinsey, Accenture, BCG all of them should be banned.
They were the big proponent of the the just in time management principles in the hospitals in the Netherlands.
Then when covid came they were the first the market on twitter & linkedin for advice how to improve your health inventory & deal with covid challenges.
Serious impact with zero skin in the game. These consultants are parasites.
They are mainly used as proxies to make decisions managers dont want to be responsible for.
Re: EY gets banned from new audit business in Germany
#84TBH, I don’t understand why anyone would be naive enough to hire EY and then actually trust them.
As a publicly traded company, you have to hire auditors. If you don’t like EY you can go to PwC, KPMG or Deloitte, but what’s the difference?
Re: EY gets banned from new audit business in Germany
#85If a CEO mismanages and goes bankrupt, they cannot start another company for 5 years; a two-year ban seems mild, but better than nothing, as the reputational damage is substantial (why would any non-criminal pick EY afterwards in good faith if there are others?).
Really? 5 years? That seems really harsh. Is it all business failures or does it have to be due to mismanagement? I've heard the climate is very hostile to businesses in Germany; my sister in law was trying to sell art on etsy and apparently she had to get a business license to do so in Germany. She's now back in the USA where she can just sell stuff online and the only thing she needs to do is file her taxes correct…
> Really? 5 years? That seems really harsh.
Bankruptcy is not a mild consequence. People can and often are ruined by a bankruptcy, not to mention the harsh impact that it has on employees who are suddenly forced out of a job. Declaring bankruptcy should not be considered as something mundane or yet another run-of-the-mill managerial decision.
Also, not being able to found a company is not what I would call "harsh". Even in a purely capitalist view of society, a entrepreneur needs to focus on ventures to ensure they are successful, and "failing fast" does not mean it's ok to file for bankruptcies.
Re: EY gets banned from new audit business in Germany
#86> Auditors insist that their services cannot be treated as a guarantee that accounts are truthful, and note that sophisticated frauds are by their nature difficult to spot. As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. I would naively assume that auditors have access to all financial accounts and records of cash flows and they make sure they all add up and are…
> Is it just a top-level glance at the numbers because there isn't enough time/money to scrutinize everything?
This seems to be the case for our EY IT audits anyway. Just send them the right screenshots and all the boxes will be ticked.
Re: EY gets banned from new audit business in Germany
#87Earlier quoted context omitted.
> Or can the numbers all add up but there's still fraud? Yes, of course. Consider that you've set up a separate company and you intend to steal money from your employer. You've got a buddy in accounts payable that you're in cahoots with. You get set up as a vendor, you send invoices to the company, they pay them, and you never deliver anything. The company's numbers add up. They pay vendors for services all the time.…
>you never deliver anything A thorough audit would reveal this as well though, as it would actually evaluate the entire supply chain is actually working as intended.
Version two of this fraud is you do supply something, but it's either a) something the company doesn't actually use, so you can provide a stand-in, knowing it will be stocked and later destroyed, b) something worthwhile that you've bought and marked up with help, etc.
Re: EY gets banned from new audit business in Germany
#88Earlier quoted context omitted.
The audited company often buys consulting services from the auditors which in effect is an extra incentive on top of the moneys paid for the auditing service. The mechanism that allows this is the ‘Chinese wall’ but that is a total joke. What really need to happen is to separate out consulting from auditing. That’s not going to happen though as there is just so much money is consulting.
What should happen is audit becomes a public trust financed by a tax on all public companies.
Which in turn creates the issue of how to keep this trust truly independent. There have been successful long term campaigns to wrest control of supposedly independent bodies and align them with special interest groups.
Re: EY gets banned from new audit business in Germany
#89Earlier quoted context omitted.
This is an ideological take, and an American one at that. Not necessarily a fact.
I mean, fair, but when even the Americans are saying to let the investors lose their shirts, you might want to at least think about it.
This isn't about investors, it's about creditors.
Re: EY gets banned from new audit business in Germany
#90Earlier quoted context omitted.
Really? 5 years? That seems really harsh. Is it all business failures or does it have to be due to mismanagement? I've heard the climate is very hostile to businesses in Germany; my sister in law was trying to sell art on etsy and apparently she had to get a business license to do so in Germany. She's now back in the USA where she can just sell stuff online and the only thing she needs to do is file her taxes correct…
> Really? 5 years? That seems really harsh. Is it all business failures or does it have to be due to mismanagement? There’s a big difference between bankruptcy and business failure. Plenty of businesses fail without entering bankruptcy, they’re wound down responsibly and their creditors are repaid in full. If a company fails due to bankruptcy, then it means that people who lent money to that business are out of pocke…
You can also screw over your creditors without declaring bankruptcy. Just stop paying your bills. Elon is famous for not paying creditors at twitter. Bankruptcy is just a way to get relief from creditors and prevent them from suing you.