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Hey you. I come bearing news.<\/p>\n
There\u2019s a trail underway across the pond to determine if EY was negligent in its audit work for collapsed hospital corporation NMC Health or if, as EY says, the firm was \u201citself a principal target and victim of the fraud.\u201d Reuters<\/em> reports<\/a>:<\/p>\n EY failed to spot a major fraud by main shareholders of UAE hospital operator NMC Health in what lawyers for the firm\u2019s administrators described as disgraceful auditing, at the start of a roughly $3 billion London trial on Monday.<\/p>\n The administrators of NMC \u2013 a FTSE 100 company when it collapsed in 2020 after disclosing more than $4 billion in hidden debt \u2013 are suing over audits from 2012 to 2018, when EY gave an unqualified opinion that NMC\u2019s accounts were accurate.<\/p>\n The company\u2019s administrators Alvarez & Marsal say EY, one of the world\u2019s \u201cBig Four\u201d auditors and formerly known as Ernst & Young, was negligent in failing to get proper access to NMC\u2019s books, missing billions in unreported borrowing.<\/p>\n EY, however, denies the negligence allegation and argues that it was NMC\u2019s own senior personnel who perpetrated the fraud and manipulated its accounts, hiding the fraud from EY.<\/p>\n<\/blockquote>\n Earlier: EY Reminds Us That Audits Provide \u2018Reasonable Assurance,\u2019 Not a Guarantee That Billions of Dollars Aren\u2019t Hidden From the Balance Sheet<\/a><\/p>\n Kyle Crockett, a Harvard Business School graduate who dipped out of KPMG at Senior Manager in 2006 and has been in the car space since, is heading to Ford as Chief Accounting Officer. There\u2019s a press release<\/a>:<\/p>\n Crockett brings a wealth of experience in accounting, SEC and financial reporting, internal controls, process and system transformation, and tax to his new position. Most recently, he served as Vice President, Controller and CAO at Carrier Global Corporation. In that position, he established the global controllership team, implemented a culture of quality, accountability and collaboration, and helped streamline Carrier\u2019s business portfolio and simplify its technology footprint.<\/p>\n Prior to joining Carrier, Crockett worked across industries and geographies, including spending more than a decade at General Motors. There, he launched process transformation initiatives to drive global standardization, improve quality and efficiency and enhance insight to drive better decision making.<\/p>\n<\/blockquote>\n Detroit Free Press<\/em> reported last week<\/a> that Ford is cutting 350 software jobs \u201cin its effort to improve efficiency.\u201d<\/p>\n Corporate Crime Reporter<\/em> covered a letter penned by<\/a> former SEC officials, PCAOB advisory committee members, and former auditors to the Congress warning that eliminating the PCAOB would be very bad for capital markets. As part of their report, they spoke to Lynn Turner, former Chief Accountant for the Securities and Exchange Commission.<\/p>\n \u201cThe House Financial Services Committee approved it last week,\u201d Turner told\u00a0Corporate Crime Reporter\u00a0<\/em>in an interview last week. \u201cI heard that there is an expectation that this and other legislation will be combined into the House Budget reconciliation bill and adopted at the end of May or the first week of June.\u201d<\/p>\n \u201cThe Democrats in the Senate are likely to go to the Parliamentarian and seek a ruling that some of this legislation that gets put into the so-called Big Beautiful Bill is not relevant to the budget and therefore cannot be included in the Big Beautiful Bill.\u201d\u00a0<\/p>\n \u201cThe question then becomes \u2013 does the parliamentarian want to keep her job or not? If you are in one of these senior roles in DC today, the question is \u2013 are you going to give them the answer they want, or are you going to give them what you think is the right answer? If you give them an answer and they don\u2019t like it, there is a good chance you are going to be unemployed within 24 hours.\u201d<\/p>\n Will the bill go through?<\/p>\n \u201cIf I were betting on this, I would bet that it will go through. I hope it won\u2019t.\u201d<\/p>\n<\/blockquote>\n The accounting department at Queens College in New York is getting an unusual amount of press this week related to the alleged ousting of some older Jewish adjuncts<\/a>:<\/p>\n Queens College purged its accounting department of Jewish adjunct professors after \u201cantisemitic hate speech and violence\u201d erupted on campus following the Hamas terror attack on Israel, according to a lawsuit.<\/p>\n Adjunct accounting professor Helen Schwalb says the City University of New York school declined to reappoint her in May 2023 \u2014 along with five Jewish colleagues \u2014 as part of an effort to \u201cclean house of its Jewish staff,\u201d she claimed in court papers.<\/p>\n The school \u201ckept younger, non-Jewish educators with lower performance ratings,\u201d Schwalb, 66, contended.\u201cThe only remaining Jews in the [accounting] department are those with tenure who are in their 70s and 80s and will likely retire soon,\u201d she said in the Brooklyn Federal Court lawsuit, which seeks unspecified damages.<\/p>\n<\/blockquote>\n Here\u2019s an interesting bit:<\/p>\n The school claimed there was a shortage of enrollment and budget issues, but Schwalb said in court papers the two classes she was slated to teach were fully enrolled and given to other, less qualified educators.<\/p>\n<\/blockquote>\n Chicago Tribune<\/em> reported over the weekend<\/a> that a tax preparer in the Chicago burbs is accused of orchestrating $10 million in COVID relief fraud:<\/p>\n According to the charges, from May 2020 to December 2022, 53-year old Hiam Hmaidan of Oak Lawn and others conspired to use personal information obtained from other individuals to fraudulently apply for unemployment insurance benefits from the Illinois Department of Employment Security, which was was providing enhanced benefits to anyone out of work because of the pandemic.<\/p>\n The applications submitted by Hmaidan, which were done online, used false employment information, false information regarding whether the claimant was unemployed as a result of the COVID-19 pandemic, and false contact information for the claimant, according to the charges.<\/p>\n<\/blockquote>\n Hmaidan\u2019s attorney said she \u201clooks forward to her day in court.\u201d<\/p>\n The Trib report includes this frightening bit about just how much the Illinois Department of Employment Security paid out that it shouldn\u2019t have:<\/p>\n The report stated IDES paid out over $5.2 billion in overpaid unemployment benefits during the first 18 months of the pandemic, with a large portion attributed to fraud. This overpayment included $6 million paid to 481 deceased individuals and $40.5 million in checks to incarcerated individuals, according to the report.<\/p>\n<\/blockquote>\n Speaking of Chicago\u2026the city itself has hired EY to help it find $1 billion in the couch cushions<\/a>:<\/p>\n Chicago is hiring Ernst & Young LLP to help the city slash costs and close budget gaps that are forecast to top $1 billion in each of the next two years.<\/p>\n The consulting firm will support Mayor Brandon Johnson and a newly appointed working group co-led by Loop Capital\u2019s Jim Reynolds to make recommendations to improve long-term financial stability.<\/p>\n Jill Jaworski, Chicago\u2019s chief financial officer, says EY was engaged to find efficiencies and determine ways the government could operate better. \u201cAll those things are going to inform the proposal this administration ultimately makes for the budget.\u201d<\/p>\n<\/blockquote>\n A PwC audit says Justin Bieber owes his former manager Scooter Braun\u2019s company Hybe $8.8 million, reports TMZ in a very he-said-he-said story about the Biebs and his old BFF<\/a>.<\/p>\n Hybe then did an internal audit and determined Scooter was actually underpaid commissions, and Justin owed him $1 million. We\u2019re told Scooter said he waived that amount, but Justin\u2019s people felt it was a corrupt audit because Hybe was just covering themselves.<\/p>\n Hybe then hired an independent auditor \u2014 Pricewaterhouse, or PWC \u2014 and after a 6-month audit which was completed in April, PWC determined Justin actually owed Scooter more like $8,806,000. TMZ has seen the PWC audit report and the $8.806M figure is on the document.<\/p>\n<\/blockquote>\n The Times<\/em> talks admiringly<\/a> about the boutique firms popping up to challenge the \u2018flabby\u2019 Big 4 and how they\u2019re getting partners on board:<\/p>\n Sources said that the firm will start with \u201cabout 30\u201d partners, some of whom were casualties of recent purges at the Big Four. It is promising payouts worth hundreds of thousands of pounds per year to potential recruits, according to sources. That could represent a steep pay cut for most Big Four partners, who typically earn about \u00a3800,000 a year, but Unity is understood to be tempting applicants with equity, which could potentially lead to a multimillion-pound payout in several years\u2019 time, if all goes well.<\/p>\n The hiring spree has created a stir in the City. Some sources claim that legal threats are flying, warning firms not to poach staff. Unity Advisory and Warburg Pincus did not comment.<\/p>\n<\/blockquote>\n OK that\u2019s it for now. As always, you are welcome and encouraged to reach out via email<\/a> or text<\/a> if you see an interesting story, have a tip, or just need to complain.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":" Hey you. I come bearing news. There\u2019s a trail underway across the pond to determine if EY was negligent in its audit work for collapsed hospital corporation NMC Health or if, as EY says, the firm was \u201citself a principal target and victim of the fraud.\u201d Reuters reports: EY failed to spot a major fraud […]<\/p>\n","protected":false},"author":1,"featured_media":248230,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11759],"tags":[90744,12843,78169,12846,2716,9557,1636,1315,10959,41661,16796,6333,35709,832,11549,1820,25899],"dealstore":[],"offerexpiration":[],"class_list":["post-248229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-5-19-25","tag-accounting","tag-bieber","tag-chicago","tag-couch","tag-cushions","tag-deep","tag-dive","tag-find","tag-hires","tag-justin","tag-monday","tag-monday-morning-accounting-news-brief","tag-money","tag-morning","tag-news","tag-pwc"],"yoast_head":"\n\n
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