• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Billionaires Elon Musk and Mark Zuckerberg used mortgages to buy multimillion-dollar mansions. Here’s why that’s a savvy financial decision

2

AI CEOs from OpenAI, Anthropic, and Microsoft set aside their rivalry to warn Congress AI is making it too easy to design and create bioweapons

3

Social Security faces a 24% cut in 2032—that's a $345 billion hit to retirees nationwide, watchdog says

1

Billionaires Elon Musk and Mark Zuckerberg used mortgages to buy multimillion-dollar mansions. Here’s why that’s a savvy financial decision

2

AI CEOs from OpenAI, Anthropic, and Microsoft set aside their rivalry to warn Congress AI is making it too easy to design and create bioweapons

3

Social Security faces a 24% cut in 2032—that's a $345 billion hit to retirees nationwide, watchdog says

No sympathy for the auditors in Lehman case

By
Colin Barr
Colin Barr
Down Arrow Button Icon
By
Colin Barr
Colin Barr
Down Arrow Button Icon
December 21, 2010, 11:26 AM ET

“Auditors who can’t say no” sounds like a support group in the making. But one embattled audit firm isn’t getting a terribly sympathetic hearing.

So says a quickie survey conducted Monday by the Argyle Executive Forum. The electronic poll of 498 members finds that nearly half of respondents — 48% — believe New York should move forward on civil fraud charges against Ernst & Young over its role in the collapse of Lehman Brothers.



I'll show you my audit trail

That compares with 27% who say the state shouldn’t press charges against E&Y, a deep-pocketed outfit that is one of the Big 4 accounting firms, and 24% who just don’t know what to make of the whole mess.

The survey comes on the heels of a report Monday that Ernst & Young could soon find itself hauled into court over its well documented failure to ask Dick Fuld (right)  just what he and his minions were trying to accomplish with some of their aggressive accounting.

Key among those maneuvers is the notorious Repo 105, in which Lehman and some other Wall Street firms booked loans as sales at the end of quarters in order to make their leverage levels look less irresponsible.

As feckless as E&Y seems to have been, passing the buck at every turn while claiming improbably that there is no reason to believe Wall Street ever tried to mislead anyone, there is also no doubting the utter absurdity of Lehman. This ends up working out in E&Y’s favor, at least to my reading of the response to the second question in the Argyle poll.

Some 39% of respondents say they believe the firm played a “material role” in the collapse of Lehman, which filed in September 2008 for the biggest-ever U.S. bankruptcy. Almost 36% said they believe Ernst & Young didn’t play a material role, however, while 25% say they have no earthly clue either way.

This last finding suggests that perhaps the nation isn’t completely spellbound by this story, in spite of the considerable dramatic possibilities. You have the greedy Lehmanites and the spineless auditors cashing so many big checks that they very nearly blow up the economy. Then, just when some well muscled foreigner should be talking about “payback time,” everyone sort of dozes off till two years later a publicity-seeking politician (is there any other kind?) decides it’s time to dig the whole thing up again. Call it SFAS 140: This time it’s personal.

As ridiculous as it all seems, it is about time the auditors got held to a standard higher than “there are too many damn lawsuits as it is.” KPMG has paid $70 million to settle its liabilities in two big subprime blowups, those of New Century and Countrywide, and you’d have to say given the size of those debacles that was probably not a terrible bargain for the firm. It will be worth watching how much E&Y has to pony up to call off the Cuomo express.

The whole issue raised enough eyebrows that Argyle, a New York-based group that says it brings some 25,000 business leaders together for “strategic collaboration and business development,” chose to take the membership’s temperature on it. A spokesman says the firm conducts such polls “a few times a year, based on what the membership is focused on.”

Previous poll subjects, he said, include Tiger Woods and Goldman Sachs (GS). The executives who join Argyle may well fashion themselves “senior operating leaders, board members, investment managers and policy makers.” But hey, they like a little rubbernecking just as much as the next guy.

About the Author
By Colin Barr
See full bioRight Arrow Button Icon

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

da
CommentaryIPOs
The short seller’s argument nobody on the coming mega IPO roadshow wants you to make
By Bhaskar ChakravortiJune 7, 2026
2 hours ago
Howie Headshot1 26
Healthmental health
How Howie Mandel turned a panic attack into a mental health movement and helped build a company now worth hundreds of millions
By Catherina GioinoJune 7, 2026
3 hours ago
The Strait of Hormuz is more open than previously thought as the U.S. shoots down Iranian drones threatening ships and provides ‘naval overwatch’
EnergyIran
The Strait of Hormuz is more open than previously thought as the U.S. shoots down Iranian drones threatening ships and provides ‘naval overwatch’
By Jason MaJune 6, 2026
8 hours ago
Illinois joins Ohio in ordering pause on data center tax credits
PoliticsData centers
Illinois joins Ohio in ordering pause on data center tax credits
By Yash Roy and BloombergJune 6, 2026
12 hours ago
Here’s where U.S. debt may become unsustainable with interest payments triggering a default crisis that even steep tax hikes can’t fix
EconomyDebt
Here’s where U.S. debt may become unsustainable with interest payments triggering a default crisis that even steep tax hikes can’t fix
By Jason MaJune 6, 2026
12 hours ago
Trump says he supports salary cap for Major League Baseball
North AmericaMLB
Trump says he supports salary cap for Major League Baseball
By Jordan Fabian and BloombergJune 6, 2026
14 hours ago

Most Popular

Billionaires Elon Musk and Mark Zuckerberg used mortgages to buy multimillion-dollar mansions. Here’s why that’s a savvy financial decision
Real Estate
Billionaires Elon Musk and Mark Zuckerberg used mortgages to buy multimillion-dollar mansions. Here’s why that’s a savvy financial decision
By Sydney LakeJune 6, 2026
1 day ago
AI CEOs from OpenAI, Anthropic, and Microsoft set aside their rivalry to warn Congress AI is making it too easy to design and create bioweapons
AI
AI CEOs from OpenAI, Anthropic, and Microsoft set aside their rivalry to warn Congress AI is making it too easy to design and create bioweapons
By Marco Quiroz-GutierrezJune 5, 2026
2 days ago
Social Security faces a 24% cut in 2032—that's a $345 billion hit to retirees nationwide, watchdog says
Economy
Social Security faces a 24% cut in 2032—that's a $345 billion hit to retirees nationwide, watchdog says
By Nick LichtenbergJune 5, 2026
2 days ago
The Strait of Hormuz is more open than previously thought as the U.S. shoots down Iranian drones threatening ships and provides 'naval overwatch'
Energy
The Strait of Hormuz is more open than previously thought as the U.S. shoots down Iranian drones threatening ships and provides 'naval overwatch'
By Jason MaJune 6, 2026
8 hours ago
Here's where U.S. debt may become unsustainable with interest payments triggering a default crisis that even steep tax hikes can't fix
Economy
Here's where U.S. debt may become unsustainable with interest payments triggering a default crisis that even steep tax hikes can't fix
By Jason MaJune 6, 2026
12 hours ago
Trump says 'situation with Iran seems to be going quite well' while U.S. shoots down more missiles and drones near Strait of Hormuz
Politics
Trump says 'situation with Iran seems to be going quite well' while U.S. shoots down more missiles and drones near Strait of Hormuz
By Michelle L. Price, Samy Magdy and The Associated PressJune 6, 2026
20 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.