What will make Ernst & Young different from the rest of the Big 4? Will it be an Executive Decision or…
Published on: 09 Jul 2010
This is a major move for the accountancy profession.
The profession has been under increasing regulatory pressure for a while now and the decision to appoint non-execs is reportedly in response to the new audit firm governance code that was published earlier this year.
The revised Ernst & Young advisory council structure will in broad terms mean that Ernst & Young will have a board structure which is similar to the multi-national companies that are their clients. Their remit will include monitoring strategy and risk.
Their global advisory council currently includes 36 senior partners. These partners will soon be joined by 4 non-executive directors drawn from the business and regulatory world.
The names of these non-execs will be disclosed later this year and although I’m not a betting man I’d probably have a wager that their CVs will not include the names of Deloitte, KPMG or PricewaterhouseCoopers.
Published on: 08 Feb 2010
Enron is arguably the best known corporate bankruptcy in recent years. The US energy and communications giant collapsed in 2001 owing approximately $60 billion. The collapse of Enron is well documented. Jeffery Skilling, the CEO of Enron, was keen on mark-to-mark accounting systems which allowed notional value to be given to ideas which might pay off in the future. Billion dollar losses were disguised as profits. Skilling was sentenced to 24 years in jail for fraud and Kenneth Lay, Enron’s founder, died before sentencing.
Enron was also a major factor behind the introduction of the Sarbanes-Oxley Act and also the collapse if its auditor Arthur Anderson resulting in the “Big 5” becoming the “Big 4”.
Whilst on the face of it a play about accounting fraud at a US corporation doesn’t sound the most exciting thing to watch it really was very well put together. Theatre, dancing, singing and puppets all added to the drama!
The play was great and if you do get an opportunity to see it I’d strongly recommend that you do so.
My husband is in the medical profession and he is always joking that accounting and finance is easy. Unfortunately the play was so good at explaining complex financial issues in a relatively straightforward way that he is now even more convinced that finance concepts are easy to understand!