Professor Elam

Tuesday August 23 2016

One of my 12 Steps to Conquer Accounting is a  subscription to the Wall Street Journal. Assuming of course that one reads it daily.

Today several articles caught my eye but this one, DeLoitte Sued over Defunct Bank Audit rings true for both my intermediate and audit classes.

The intermediate class is all about statement preparation. The audit class is all about just what the assurance of an external audit means. This article details a $128 M lawsuit over the now defunct Lebanese Canadian Bank (Lebanon and Canada had a deal, who knew?). Did DeLoitte ignore a suspicion of money laundering and terrorist financing at hte Beirut based lender.

Meanwhile PwC is being sued  for $5.5 billion, not the b not an m, for failing to detect fraud in the collapse of mortgage firm Taylor Bean and "Whitaker Mortgage  Corp.

What constitutes a successful defense for these firms?  How will the audit working papers and evidential matter not to mention professional experience of the auditors play out in court?

This article provides a real background as to why we study the material in the audit class.