Yes, the question is somewhat rhetorical. I ask it only because, via these legal strategies, the auditor most often escapes liability for their client's frauds, especially when the client ends up bankrupt.”
Moving very liquid assets makes sense. That;s the typical type used for these transaction under non-sales circumstances. Prices are easily established, no muss, no fuss. The Examiner's Report did mention that there had been instances of them trying to push crap into these deals. In a few cases they did and caught their mistake. In general, the report, however long and detailed, points to many things they couldn't, wouldn't and didn't investigate. I think we will find out later that they also did quarter end, round-trip transactions to establish sham pricing on Level 3 assets in order to defer writedowns. That;s what I said three weeks ago in speculating how they avoided the writedowns for so long. It makes that move even more likely when their balance sheet was becoming more and more heavily weighted to non-liquid assets every time they did Rep 105s with highly liquid securities.”
“PricewaterhouseCoopers was not "nominally" or otherwise independent in this dispute, notwithstanding their role as auditor to both. Although they are supposed to be on the side of the shareholders of both, there is an inherent conflict of interest given the material nature of this dispute. PwC lost their independence a long time ago. it continues to be compromised by 230+ million in audit fees from the combined entities as of 2008.”
“Wow, I'm really impressed! The big four audit firms have to be purer than Caesar's wife and there just not. You didn't even mention E&Y tax shelter problem. These firms need much better internal control but it's easier to sweep the problems under the rug.”
Thanks for your comments. I'm sorry to hear bout your daughters disillusionment with PwC, but if she is highly intelligent, I'm not surprised. What I don't understand is your description of her as "still an Ayn Rand capitalist." Doesn't she see that it is exactly that kind of self-centered, selfish type of capitalism that is at the root of the problem? Public accountants have a public duty for the common good. That concept is alien to, the antithesis of, the Ayn Rand philosophy. They're not compatible.
bodel on Feb 5, 2010 at 16:34:46
The point being public duty and common good are not in the syllabus at B.C.
Rather,it is contributing to the problem.Collusion is the operative word.
She does see the dire need for Glass/Steagel...to begin with...
Please...don't stop your excellent work.It is step one on the way to reform....