Could Lehman be Ernst & Young's Enron?

[babylonsister]

Could Lehman be Ernst & Young's Enron?
13 Mar 2010, 1714 hrs IST, REUTERS


NEW YORK: Ever since the fraud at U.S. energy trader Enron Corp brought down accounting firm Arthur Andersen eight years ago, global auditing firms have worried that a major misstep could be fatal.

Over the past few years, the firms have pushed for liability caps on litigation and settled dozens of cases, all amid concerns that each of the "Big Four" accounting firms faces potential litigation from undetected frauds at large public companies that could destroy them.

Ernst & Young became the latest auditor to come under fire this week after the court-appointed examiner in the Lehman Brothers Holdings Inc bankruptcy said the audit firm did not challenge accounting gimmicks that allowed Lehman to hide some $50 billion in assets in 2008, while claiming it had reduced its overall leverage levels.

"As an auditor, you're always concerned when you're auditing a large company that ultimately fails," said Lynn Turner, a managing director in the forensic accounting practice at consulting firm LECG and former chief accountant of the Securities and Exchange Commission.

"But a lot of those do occur where the auditors come out OK and the auditors aren't at risk -- obviously in this case the examiner thinks differently," Turner added.

At issue is a repurchase and sale program called Repo 105, which Lehman used without telling investors or regulators, and the examiner concluded was used for the sole purpose of manipulating Lehman's books.

In the examiner's report Lehman executives described the Repo 105 as everything from "window dressing" and an "accounting gimmick" to a "drug."

more...

http://economictimes.indiatimes.com/news/international-business/Could-Lehman-be-Ernst-Youngs-Enron/articleshow/5679591.cms

[Change Happens]

1. I sure hope so...............nt

[kywildcat]

2. why do you want E&Y to fail?

[Change Happens]

3. If they helped Lehman cheat us and help almost ruin our economy, I want them

Put out of business. Did they commit a crime?

[cutlassmama]

4. they were the same group that were tied to accounting in some S&L's in the 80's

looks like a pattern