Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

EY gets banned from new audit business in Germany

economist.com

Post reply on HN
Print view View original

241–250 of 303 posts

Re: EY gets banned from new audit business in Germany

#241

Post by jsmith99 »

lordnacho wrote: post #226
SilverBirch wrote: post #168

I don't know if I have just enough knowledge to be dangerous, but it seems to me that auditors don't really do what people think they do. Auditors seem mainly to just double check the numbers they're handed. This serves a purpose, it provides some level of guarantee that companies that are acting in good faith are generally reporting correct numbers. Auditors don't do what people seem to think they should do - invest…

What never made any sense to me was the incentives. Is the company supposed to hire people to write a public report saying the company committed fraud? It doesn't really seem like it makes sense for anyone. If anything, you'd just do some minimal performative work to say you had a good look in the company, and then you pick up more work next year. If you write a critical report, how many companies will want to hire y…

The auditors are appointed by the audit committee which consists of board members who are non executive directors i.e. they are not involved in the day to day running of the company and so theoretically should be independent and interested in uncovering any wrongdoing by management.

Re: EY gets banned from new audit business in Germany

#242

Post by cuteboy19 »

itissid wrote: post #109
ryzvonusef wrote: post #96

Earlier quoted context omitted.

> As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. as some one who studied accounting and auditing, here is a page from my text: https://kfknowledgebank.kaplan.co.uk/audit-and-assurance/aud... but the tl;dr is that auditors don't provide "insurance", they provide "assurance", specifically reasonable assurance.... that the accounts are "true and fair" or to be put…

What Engineering tech/AI tech do you think could make the process more thorough but not proportionally expensive?

In crypto the auditing process is somewhat more sophisticated. They scan the contract for similarity to known scams and analyze it for possible backdoors. They also do due diligence on the promoter of the contract ("fully doxxed").

In reality of course all this work could have been replaced by def is_fraud():return True

And the accuracy would probably increase. Crypto fraud has the beautiful property that the people being defrauded actively defend the fraudsters. Moreover, in a lot of cases it isn't technically fraud since the contract is upfront about what it does but at the same time it is very exploitative but that doesn't matter to crypto people

Re: EY gets banned from new audit business in Germany

#243

Post by cjalmeida »

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…

Er… McKinsey and BCG don’t even do audit. What do they have to do with TFA?

Re: EY gets banned from new audit business in Germany

#244

Post by 23B1 »

californical wrote: post #240
23B1 wrote: post #234

Earlier quoted context omitted.

Well for my clients they're often up against maxed-out resources or employees who are just mired in their day-to-day and need a sort of entrepreneur-in-residence. For me, I'm given one or several major strategic initiatives and then my job is to build a 'demonstrator' that hits all of those without needing to fully build them out. My client (typically an executive) can then take the presentation to his or her leaders…

This sounds like amazing work, the best part of software engineering is coming up with a prototype and experimenting. Most of my personal projects are basically “I wonder if X is easy or hard, and if I can make it work” Do you stick to a particular business domain? Eg finance, transportation, e-commerce? I’d think it would help you to build MVPs if you stayed in a specific domain, but it could be fun to move around a…

1. Yeah I stick primarily to hospitality and consumer companies (B2C and B2B2C) with a large amount of tech debt; because they're so mired in keeping their current systems alive, they don't have time to innovate, so thats where I come in.

2. Word of mouth primarily. When they look at what I cost them vs. what the big consultancies – or even the midsize 'innovation consultancies' like Frog or IDEO cost, it's a no-brainer. I just blend basic financial rigor with a bit of visionary thinking and competitive research, and set my clients up for the win when they go ask for permission to go from idea to prototype to MVP to pilot.

Re: EY gets banned from new audit business in Germany

#245

Post by ethbr0 »

23B1 wrote: post #179

I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…

On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies.

It is not for performance.

It's for minimizing risk.

And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all."

When I've seen big consultancies fail, it almost always goes like this: (1) big idea sold with A-team, (2) contract won and lowest-cost B-team substituted in, (3) B-team screws up execution, and customer usually figures out on or right before target delivery date, (4) if smart, customer tears consultancy a new asshole, from people with VP et al. titles, (5) if interested in further business then consultancy profusely apologies and puts an A-team back on the project, (6) A-team delivers, albeit after schedule.

The difference between ey et al. vs smaller shops is (4). Smaller shops don't have extra senior bodies laying around to retask.

So a more accurate description of a VP hiring ey is probably "I know they're going to screw it up, but I know if I bitch enough they'll eventually get it done right."

Re: EY gets banned from new audit business in Germany

#246

Post by denlekke »

chinabot wrote: post #185
23B1 wrote: post #179

I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…

Lets face it, the answer from chatGPT would be almost identical to what these consultants say, however the main reason for consultants is to CYA so if the decision is bad, you can blame someone else.

just repackage chatGPT as a new consultancy, McKenzie, and hope no one notices

actually, brb

Re: EY gets banned from new audit business in Germany

#247

Post by 23B1 »

ethbr0 wrote: post #245
23B1 wrote: post #179

I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…

On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies. It is not for performance. It's for minimizing risk . And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all." When I've seen big consultancies fail, it almost always goes like this: (1) big…

Nailed it. My only beef is that when you’re going line-by-line on the deliverables, arguing over the “definition of done” that you’re actually crushing whatever good will and budget remains for the innovation a company actually needs.

And when I say innovation I don’t mean gravity boots, I just mean a progressive use of robust tech, easily understood processes, and a general aversion to complexity - so you don’t have to do it all over again in five years.

OTOH executive retention is tanking, so maybe it’s fine you one-and-done it, and move on to your next job before the truth is out - YOLO! (Barf).

Re: EY gets banned from new audit business in Germany

#248

Post by 23B1 »

denlekke wrote: post #246
chinabot wrote: post #185

Earlier quoted context omitted.

Lets face it, the answer from chatGPT would be almost identical to what these consultants say, however the main reason for consultants is to CYA so if the decision is bad, you can blame someone else.

just repackage chatGPT as a new consultancy, McKenzie, and hope no one notices actually, brb

My savviest clients are already on this - why hire a consultant for strategy when you can just suss out what the competition is doing and improve incrementally on that?

My only (personal) hope is that it’ll free guys like me up to soar through ‘creative configuration space’ and come up with those truly unique and unexpected tactics that are new to an entire segment or industry.

Sure I don’t get to be a millionaire MD with two hundred reports billing hourly, but maybe I can do value-based or outcome-based pricing and get my clientele to take ‘healthy’ risk - instead of sitting around fretting about shaving half a point off labor costs through a mindless re-org :/

Related anecdote: if you see someone on the airplane rejiggering a public company’s org chart - short the stock!

Re: EY gets banned from new audit business in Germany

#249

Post by sealeck »

mkl95 wrote: post #81

I wonder how many bn the EU economy would save every year if Big Four companies were banned everywhere.

That's part of the issue. Another big part is that we should put a whole load more money into investigating financial crime (so funding white collar crime investigatory units as well as tax authorities).

Re: EY gets banned from new audit business in Germany

#250

Post by jldugger »

Cazafr wrote: post #130
lumost wrote: post #42

Earlier quoted context omitted.

Curious, this seems like a good place to deploy AI tooling. If I’m involved in internal controls, I’ll know what the auditors look for. If an AI can augment the auditors to find more suspicious transactions such as to companies with no employees, or conflicts of interest - I could probably find more fraud.

Ex-IT Auditor and I agree. I was screaming for automation in the audit process for years and nobody would listen. Many of the employees are burnt-out and hate their jobs. My prediction is that governments will decide to audit companies using some kind of AI and report back any findings to shareholders, while ensuring correct taxes are paid. Big 4 has 5 years max to pivot their business or they're going to die.

> Ex-IT Auditor and I agree. I was screaming for automation in the audit process for years and nobody would listen.

Honestly, this seems like a lose-lose for decision makers: - automation reduces billable hours, a net loss to the auditor - automation finds more fraud, a net loss to the person who hired the good auditor

Of course, shareholders would appreciate less fraud, but have no seat at this particular table.

Post reply on HN