E&Y Fights Back After Lehman Bankruptcy Examiner Criticism
E&Y aren’t taking the allegations that they may have been “professionally negligent” lying down…
Ernst & Young partners have sent letters to the firm’s clients over the past few days, defending their firm’s audit of Lehman and how it dealt with a whistleblower’s letter about the bank’s accounting policies. And someone got a hold of one…
Reuters: According to a copy of the letter [ID:nN22210897], the audit firm said it believes it “will prevail” if any of the examiner’s potential claims against the firm are pursued by Lehman or its creditors and said some recent media coverage of the firm’s role, such as the firm’s use of “sham transactions” to hide bad assets, has been “inaccurate.”
“The months leading up to Lehman’s bankruptcy were among the most turbulent periods in our economic history,” the accounting firm said in the letter.
“Lehman’s bankruptcy was caused by a collapse in its liquidity, which was in turn caused by declining asset values and loss of market confidence in Lehman. It was not caused by accounting issues or disclosure issues.”
For a full (serious) and interesting dissection of the issues check out this post from re: The Auditors.
