Auditors to the Fallen

There has been plenty written about the impact on law firms from the current financial crisis but what about the auditing firms?  As Matt Kelly, editor of Compliance Week, pointed out yesterday, all of the “Big 4” have taken hits lately as each “has (or had) at least several clients in the financial sector that have recently been forced into acquisition, government oversight, or bankruptcy. That means greater litigation risk … and the probable loss of a client engagement.” Kelly also lines many up many of the recently departed companies with their auditors, as follows:

  • AIG: PricewaterhouseCoopers
  • Bear Stearns: Deloitte
  • Countrywide Financial: KPMG
  • Fannie Mae: Deloitte
  • Freddie Mac: PricewaterhouseCoopers
  • HBOS (Bank of Scotland): KPMG
  • IndyMac Bancorp: Ernst & Young
  • Lehman Brothers: Ernst & Young
  • Merrill Lynch: Deloitte
  • Wachovia: KPMG
  • Washington Mutual: Deloitte

As he notes, Deloitte “has the distinction of auditing the largest bank to fail so far (WaMu), the investment bank that started this panic (Bear Stearns) and one of the two largest banking companies in the whole mess (Fannie Mae).”

Read the post from “The Big Picture” on Compliance Week