Comments on: Lehman and Ernst & Young

By: T R Santhanakrishnan

T R Santhanakrishnan — Tue, 06 Apr 2010 03:25:35 +0000

It was not Lehman or E&Y alone. I stumbled into this attached report of the Fed and the FDIC which sanctions the shady accounting: http://www.sec.gov/rules/policy/2006/34-53773.pdf... "Sound practices of risky financing"? That is a conundrum.

By: Basab Pradhan

Basab Pradhan — Sun, 21 Mar 2010 01:40:22 +0000

Or when sufficiently greedy.

By: T R Santhanakrishnan

T R Santhanakrishnan — Sat, 20 Mar 2010 09:50:40 +0000

If you marry on Tuesday night with an explicit agreement to divorce on Wednesday morning, it is prostitution; not marriage. If you sell an asset with a promise to buy back three days later, it is borrowing; not sale/repurchase. It is time accounting went back to principles (and the good old convention of "substance over form") instead of esoteric bright line tests. When sufficiently distressed, people tend to "game the rules".

By: Krishna

Krishna — Wed, 17 Mar 2010 12:59:40 +0000

In any year if there is a sudden upsurge in income from sale of assets, at least the institutional shareholders or its bankers (leave alone IRS) would trace the cost/year of acquisition of asset, its WDV to determine the profit/loss from such transaction. And Lehman will have to pay tax on that fictitious profits, mind you! Even if Lehmann cooked it all up, in case of doubt, the bank statements for the period should reflect the nature of transaction. A colossal whitewash to the order of $50 billion is possible only if banks, auditors, company managements, employees have all colluded in pulling wool over the eyes of everyone else. In comparison, Satyam looks virtuous…!!! Now we know why big JV agreements insist on having any one of Big Four as their audit firms ))

By: Jr Deputy Accountant

Jr Deputy Accountant — Wed, 17 Mar 2010 02:53:35 +0000

And guess what? PwC may be guilty too - surely they SAW something while they were digging through Lehman's corpse? http://www.jrdeputyaccountant.com/2010/03/did-pwc...