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EY gets banned from new audit business in Germany

economist.com

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Re: EY gets banned from new audit business in Germany

#131

Post by anonymouskimmer »

DANmode wrote: post #129
mpweiher wrote: post #89

Earlier quoted context omitted.

This isn't about investors, it's about creditors.

Investors and/or startup loans, depending on structure, are generally right at the top of the list of creditors.

https://www.investopedia.com/ask/answers/09/corporate-liquid...

> Shareholders are often last in line to receive proceeds with preferred stock shareholders getting better treatment than common stock shareholders.

Loans aren't shares; not even early loans. Else they'd get much better returns from the successful businesses.

Re: EY gets banned from new audit business in Germany

#132

Post by koops »

sega_sai wrote: post #48

And then there is also this https://www.ft.com/content/5e6f15ce-9eda-4b04-883d-686617020... -- cheating on ethics exams by EY. It's all very funny that the whole system is built on assumption where the supposedly knowledgeable, ethical experts audit companies, but in reality, it nowhere close to that.

They cheated on the ethics exam, THEN they lied about their cheating.

Re: EY gets banned from new audit business in Germany

#133

Post by appleiigs »

version_five wrote: post #105
sega_sai wrote: post #48

And then there is also this https://www.ft.com/content/5e6f15ce-9eda-4b04-883d-686617020... -- cheating on ethics exams by EY. It's all very funny that the whole system is built on assumption where the supposedly knowledgeable, ethical experts audit companies, but in reality, it nowhere close to that.

"Cheating on ethics exam" sounds bad but it amounts to not taking some boring corporate CYA compliance training seriously, it's not actually unethical in my opinion. If anything it speaks to how bad corporate training is generally, not the ethics of the people "cheating".

Probably similar to you, I couldn't read the FT article because it's behind a paywall; however, I'm familiar with the general story. It's not some corporate training. They, plus many other accounting firms, cheated on professional licensing exams. Egregious because the accounting firms are doing the opposite of their sole purpose - add trust to the financial system.

Re: EY gets banned from new audit business in Germany

#134

Post by baxtr »

appleiigs wrote: post #126
baxtr wrote: post #115

Earlier quoted context omitted.

[flagged]

I think your comment is worse in nature than OP. Are you adding any counter-ideas to the conversation or just complaining? And now I'm complaining about your complaining.

Actually, I have to admit that you’re right!

The comment’s missing nuance triggered me. Also the word parasite. I should haven’t replied.

Re: EY gets banned from new audit business in Germany

#135

Post by hef19898 »

wouldbecouldbe wrote: post #83

EY, 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 a…

Well, EY didn't get banned from consulting, but rather accounting work. And the latter is crucial, and even legally required for all and every public company. The reasons are, among others, Enron and , yes, Wirecard. And the fact that EY screwed up Wirecard is the reason they got banned.

By the way, it was KPMG that caught the Wirecard fraud. And KPMG is in the same league and business as EY.

One of the reasons, IMHO, that Wirecard managed to get away with it for so long is, that as a German company, they didn't have to switch Accountants and have another accounting firm helping them in preparing the books. That would be a SOX set-up, and it makes perfect sense. It helps to prevent fraud and it protects retail investors, both of which are good things in my book.

Strategy consulting, the stuff BCG and McK does, is different. As is the outsourcing and consulting Accebture does, which is also different from what McK does. The topic so, is EY and accounting.

Re: EY gets banned from new audit business in Germany

#136

Post by looping__lui »

wouldbecouldbe wrote: post #83

EY, 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 a…

McKinsey and BCG do not audit companies. They are consultancies and do not certify accounts to be “correct and legit”. Think of auditing companies a little bit like of vehicle inspection shops certifying your car is safe for the road.

Consultancies are not doing that.

I’m not sure why certain businesses should be “banned” because YOU believe they do not add value. Do you pay them? No.

It’s not correct that they are proxies for decision making that mangers don’t want to be responsible for. Neither McK nor BCG could run at the scale they do for five decades if that was the case.

But I suppose that was just your happy Sunday rant of the day to let off some steam.

Re: EY gets banned from new audit business in Germany

#137

Post by zzzzsleep662 »

_fat_santa wrote: post #120
wouldbecouldbe wrote: post #83

EY, 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 a…

They are "professional scapegoats" IMO, companies pay them to take the blame and their business model seems to be: collect fees, do an "audit", pay the fine, keep the spread.

Audit results are taken very seriously by companies operating in heavily regulated industries that intend to stay in business, so healthcare, finance, insurance etc.

If you are a team lead doing programming for one of these sorts of companies and the auditors come round with some findings, I promise you that you need to take it deadly seriously. I've seen engineers fired for cause by the board of directors of a fortune 500 for failing to do so. Word gets around and nobody will touch them after that. Its literally career ending to poo poo audits.

Tech companies are the odd man out when it comes to audits, which is why its possible for so many in a thread like this to have opinions that are so wildly inconsistent with reality. Who knows how much longer that will last, particularly with advances in AI.

Re: EY gets banned from new audit business in Germany

#138

Post by simplotek »

martinald wrote: post #95
simplotek wrote: post #85

Earlier quoted context omitted.

> 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". E…

But a lot of businesses fail for reasons other than the directors "mistakes". The general macro trend has a lot to do with it. Should the owners of a cafe or bar that went under owing suppliers some money during covid be banned from starting a new business? Or someone who buys a failing business trying to turn it around and failing also be barred for 5 years? At the end of the day, creditors must (and generally do) r…

> But a lot of businesses fail for reasons other than the directors "mistakes".

All the more reason why entrepreneurs should not take lightly the prospect of filing for bankruptcy, and should focus their energy on ventures where they can minimize the chance of burning through cash right into bankruptcy. Otherwise it starts to sound like these serial entrepreneurs are just flinging crap at a wall to see which one will stick with little to no effort. This is a massive disservice to investors and employees alike, if not outright fraud.

Re: EY gets banned from new audit business in Germany

#139

Post by looping__lui »

_fat_santa wrote: post #120
wouldbecouldbe wrote: post #83

EY, 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 a…

They are "professional scapegoats" IMO, companies pay them to take the blame and their business model seems to be: collect fees, do an "audit", pay the fine, keep the spread.

No. This is nonsense.

You audit accounts that are falsified and give thumbs up: you close shop, are held liable for damages and could go to prison.

Auditing companies are crucially important for a working economy. Bank loans, bonds, equity markets would all be chaos and fraud mayhem without them.

Re: EY gets banned from new audit business in Germany

#140

Post by tom-from-july »

ChuckNorris89 wrote: post #97
tom-from-july wrote: post #72

Earlier quoted context omitted.

This is terrible advice and you or actually your Estonian company will be fined for tax fraud. In Germany income is taxed where it is generated, which includes the head of the person running the business. So if you run your foreign company from Germany - which is expect to be the case if you have no physical permanent office in Estonia, where you also have to be regularly present - you home is considered to be an bus…

>In Germany income is taxed where it is generated Only if you're a resident in Germany, But if I live somewhere in the EU and sell something to someone living in Germany I don't owe income tax to the German government. I pay my income tax where I'm a fiscal resident (Estonia, Romania, etc.)

Lucky you in this case, not having to learn and deal with all this then :) But the original comment was about someone living in Germany (at least at the time)
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