Loans and Finance

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Friday, March 12, 2010

Ernst & Young To Go The Way of Andersen's?

The Times reports that Ernst & Young (E&Y) could face legal action after a $38M 2,200 page US report into the collapse of Lehman Brothers accused E&Y of professional negligence over a number of years before the collapse of Lehman Bothers in 2008.

The report states that Lehman's used Repo 105 (an accounting "fudge") to remove temporarily up to $50BN from the balance sheet.

The report criticises Ernst & Young, who were Lehman's auditors:

"..for among other things its failure to question and challenge improper or inadequate disclosure in those financial statements".

Could it be that Lehman's will do for E&Y what Enron did for Andersen's?

1 comment:

  1. This must ne a similar "accounting gimmick" that Labour uses to keep PFI off of the balance sheet.