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What's Wrong With Accountants? Ernst & Young may soon be sued for its role as auditor of Lehman Brothers. What kind of oversight do accounting firms need?

Date: December 21, 2010

Author: Prof. John C. Coffee Jr., Esq.

QUOTE: Many accountants will say that there was no fraud because Lehman’s numbers were accurate on the day they were reported (even if it was understood by both Lehman and its auditor that Lehman would reborrow the same amount the next day). In years past, the S.E.C. would have said that an auditor’s responsibility was to provide a full and fair disclosure, and not simply to certify compliance with generally accepted accounting principles.

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Article MetaInformation:

Key People:

Key Organizations:

• Ernst & Young
• Lehman Brothers
• New York Times Company
• Securities and Exchange Commission (SEC)

Subject & Geographic Categories:

• Abstract Principles
  • Control / Access / Permission
    • Principles / Guidelines / Rules / Policy
  • Information
    • Truth / Honesty / Lying / Cheating
      • Hide/Mislead
        • Disclosure/Conflicts of Interest
          • Disclosure/Conflict of Interest (Organizational)
  • Timing / Delay / Procrastination

• Businesses & Organizations
  • Accounting / Auditing
    • Accounting/Budgets: Big Organizations
  • Organizational Structure
    • Corporate Directors
  • Professional Relationships
    • Intermediaries (non-Sales)

• North America
  • United States of America/USA

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