Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

9am lowdown: EY settles Lehman suit for $10m

by
16th Apr 2015
Save content
Have you found this content useful? Use the button above to save it to your profile.

Tired of tracking manifestos this week? We know how you feel. Have a break from politics this morning with an accountancy focused lowdown, beginning with some big regulatory news:

EY settles Lehman Brothers suit for $10m

EY reached a settlement with the New York attorney general yesterday to settle a suit that alleged the firm’s auditors facilitated a “massive accounting fraud” at failed investment bank Lehman Brothers, Reuters reported. While the prosecutor sought $150m in fees - equivalent to the amount the firm earned during 2001-8, plus damanges and relief for investors - EY managed to negotiate that down to $10m.

As New York Attorney General Eric Schneiderman pointed out, the case was the only regulatory action taken in connection with Lehman's 2008 collapse. The UK’s Financial Reporting Council dropped its complaint against EY early in 2013.

More analysis to follow…

* * *

Audit quality still an international issue

Coincidentally, while things were being tucked up happily in New York, Auditors Must address the International Forum of Independent Audit Regulators (IFIAR) was voicing its concern about “high levels of defiency” in public company audits.

The body’s 2014 Survey of Inspection Findings highlighted issues in the following main areas: Internal control testing (24%)

Fair value measurement (20%)

Revenue recognition (14%)

IFIAR said its dialogue with big audit firms “expanded all parties’ awareness of the need for deeper understanding of the causal factors of the underlying challenges to audit quality. This requires root cause analysis and responsive action.” That sounds deep - but whether it will achieve significant reforms is another question.  

* * *

Yorkshire merger creates regional giant

Yorkshire’s largest accountancy firm BHP  has swallowed up Cleckheaton-based Clough & Company, to create a regional powerhouse with six offices, 270+ staff and and fee income approaching £18m, reports Insider Media.

The merger took place alongside the planned retirement of Clough & Company partners Steven Gash and Nigel Westman, who will continue as consultants with the enlarged firm. According to BHP, the deal will strengthen BHP’s presence in West Yorkshire - and also put it into the profession’s top 40 league table.

* * *

And finally… some in-house news

AccountingWEB is pleased to welcomes Seth Fineberg to the team as the new managing editor for our US sister site. Seth has worked as a business editor and journalist for nearly 25 years, and was responsible for launching the Accounting Technology newsletter.

“AccountingWEB has always been committed to the CPA, as we continue to provide practical support and advice to help our members tackle the hard technical issues, as well as wider practice development strategies. And bringing Seth on board underpins that commitment,” said AccountingWEB international publisher Andy North.

He’s our boss so we had to quote him… But join us in welcoming Seth, we’re sure to see him around these parts once in a while.

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.