To trade. Join me for a deep dive into the green transformation for me, for you, for the plans. Ah, theyve been called the watchdogs of capitalism, the conscience of the free market and the pin striped mafia. The big full audit is ernst and young. K p. M g, p, w c. And then what the big 4 are incredibly influential in a market because they are indispensable experts with an in depth knowledge of companies and tex local. Theyre much too powerful to me. They influence politics and legislation with the wilkerson or to come to work with to big for they have an Important Role ordered in corporate Financial Statements. Its extremely important for us as consumers and for people who are in this, this to trusts the information we are given that are they doing their job in 2020 the why cant scandal shook germany from bows and from the stock market favorite to fraud company. So i never before, has there been such a plumber till attacks and sing . Lung audited . Why cuts Financial Results for years . Without uncovering, the fraud is counties signed as feler. D for mistakes from 90 years ago, which led to our profession should not have repeated us here. You dont have to be an angel in order to make a good audit. You just have to be independent. Each new scandal put the big order his in the spotlight. Are they taking shortcuts . Are they overwhelmed . Or is the system at fault . Oh, yes, ah. Thomas haggard is beside his passion is building guitars with a pension of just under 2000 years. The former High School Teacher says he is enough to live comfortably, but his also managed to put a little aside. Now, no wonder scared. I thought if you put money in a checking account, inflation takes it wouldnt. Oh. Instead, he invested most of his savings in a promising german company, which did i did kind of these equal florida. Im inch. Im not a risk taker mission, which is why i didnt buy just any stock. Even i bought wire card activity, coughed all it had seemed a safe bet. But then the company suddenly crashed along with the chairs and started to computers. I printer afford so big that the stock would become almost worthless. I didnt think it was possible. Is my terribly shy why cant lost a total of 10000000000 euros in market capitalization . Raising many questions. These though is how could you go to the following along that the Payment Processing company was fudging as well in scenes here . Younger finance minister blames the private auditors, the foot ice climb on a small investor like me cant check where the wire card statements are true. Austin managed thomas had get his joined a Class Action Lawsuit against white cards, auditor clift. They carry some blame. They should have been more careful, but who are thomas hair gut and the other small investors up against ernst and young or e y became the song auditor of y cod in 2011. Together with p w. C, k, p m g and deloitte e. Y is one of the big for the full largest accounting firms. Together they employ 1100000. 00 in and around 150. 00 countries and they ordered the Financial Statements of almost all Major Companies. Silas styles home is doing her ph. D at copenhagen business school. Shes been researching that big for and the role they play in the economy in society for years. Auditing is something that is required. This is something that is extremely important for well functioning market economy every medium or Large Company is required to have its annual Financial Results reviewed by an independent auditor. For a market economy, its extremely important for us as consumers and for people who are invest this to trust the information we are given. And our only weapon really is their audit. Ah, in 1929, the start of the great depression, companies and banks around the world rush to hide their financial problems. And countless people lost their jobs and savings, including hundreds of thousands in germany, one indies. And this was the context in which legislators introduced statutory audits for Stock Companies in 1931. Hes the auth garbage in, virtual twin about harden globalism accelerated the economy. Companies grew quickly informed, International Networks audits grew to in the 1980s, 80 counting fence dominated the International Industry expanded and merged forming the big c then it became the beek 5. And just a short while later, the big for k p and g, a y, d light, and p w c. In germany, the institute of public auditors or i d. W, helps influence auditing rules. The privately run organization represents the interests of more than a 1000 public auditing firms in germany, including the big 4 ah, close by no means says the jobs and auditor is clearly defined ah, desk auditors are required by law to carefully verify annual Financial Statements proof mm. They are also supposed to maintain professional skepticism toward the companies they audit, and follow a specific procedure ah, unnatural, perform east of us. An audit is designed to detect errors and Financial Statements of to the weather due to fraud or not is irrelevant. Would any good between interesting for camida when a Company Opens its books, its business is i bet numbers order to see where money flows in and where it then flows out. Bank accounts, marketing costs, operating expenses and acquisitions. The big of the company, the more complicated this flow of money can be ordered is generally cannot examine a company in its entirety. They instead choose an area to focus on the one with a suspect, the highest risk they compare the companys statements with the actual Financial Transactions to get an understanding of each of the transactions. If the order to find no fault in the companys annual financial statement, they give whats called an unmodified opinion, a seal of approval for the company. The audit is verdie to wire card was trusted for many years. And to this day, e y maintains it audited, why cant to the best of its knowledge. And according to protocol, when by voicemail inter name initial for him thursday, if Companies Like land and auditors dont notice because then we can no longer rely on the very foundation of slim. Namely mister number is for philosophy. Fabio de monte co chair. Germany is why cant Parliamentary Inquiry Committee together with parliamentarians from all political parties, democracy began investigating the German Companies collapse. October 2020. The Committee Questioned a 110. 00 witnesses of the 9 months. What is the key questions . Did e, why make mistakes . The why cant, scandal was not the 1st time the big auditors had to face criticism me for 5 years. Horizontal Boring Machine company flow checks inflated, its results with fake sales. And k, p. M g didnt notice then either leading to damages of more than 5000000000, deutsche marks the biggest White Collar Crime ever in germany. Whos in the us energy company. Enron inflated its profits for years. Its ordered to Arthur Andersen was one of the big 5 back thin. And once again, the order just failed to detect the fraud and wrong found for bankruptcy in 2001. And senior anderson employees destroyed Company Documents without permission following the scandal, the order to surrender the license to ordered listed companies. But it never recovered and was essentially dissolved ah, in 2008, it was Investment Bank lehman brothers, filing for bankruptcy. Lehman had used to counting tricks to hide its financial situation. Yes, and he was kept approving the cookbooks ah, the boat markets are in shock. The stocks are plummeting. Lehman brothers eventually collapsed and a massive debt in 2008 triggering the largest financial and economic crisis since the 2nd world war taxpayer money was used to save banks around the world. 59000000000 euros in germany alone escaped diesel for an certain failure from these are isolated cases of corporate fraud that auditors failed to detect at sophia. And each case is one to many than ost scenes. But can we say that is because of these 10 scandals in 90 years . Thats auditing tra, which checks thousands of Financial Statements every year. How it doesnt work was performed. We should auditors really help uncover corporate scandals on possible explanation, is that there are conflicts of Interest Companies hire and pay their auditors themselves. A practice based on a government assumption that companies have an interest in being properly audited. Been dissolved trust spoofing, east div from auditing booths, the public trust in a company on its finances in im on lucas vote. Truffle intern named staton with ali rica is an expert on Financial Statements and a consultant. She says the fact that Companies Pay their auditors is problematic. Are many lies happening to is still in the chin, the sign bud loosely agree on the deadline and i dont meet it. Increasing costs then declined, might say, i see that you stay within it or next year will hire another auditory mission and non profit on swan dell to its all too familiar with this pressure. He worked as a junior auditor, p w. C in luxembourg for 2 years. Already through the course, the garage was basically given auditors to something feel its against his interest to speak up, especially if they dont want to correct it deducted. Its impossible to audit well, m m and abner room. And as an additional factor complication the Auditor Company relationship next to auditing the big 4 also offer consulting. They advise clients on digitalization, sustainability, and taxes. The big 4 are incredibly influential in a market economy. They have a lot of services that really impact how business is done. Silas styles home says this creates yet another conflict of interest. Ah, you cannot see someone as your client and then also investigate them critically. As to regulator, you have to be on one side or the other. The big fall was called business use to be order thing, but now it only accounts for around a 3rd of their revenue. Around 2 thirds comes from consultancy. Then hes not really vice. If i know the auditing market is limited, and fees are essentially stagnant, and consultancy is the opposite. That then it makes sense to offer the latter, using it not to 1st end date, does unlike them, and so beaten virtuously here at folk c kept valley. Tate endeavor trots woo from school thereafter. When he moved to not doing well financially, insurance quality at the auditing firm. Im in the oh, id like to add such doing well financially also secures financial independence. Not ping hes. Im the only one who hasnt financially independent and is probably most likely to look via the way him for a client. Theyre auditing when they shouldnt, just been a neat tune. Loiter profit made from consulting, and she was, auditors can remain independent, at least according to class. Peter norman. But is this theory true . Its our oldest is independent from their clients. Its another form of pdf. You see employee shared his experience in the us. Now robot out worked as an auditor at p w. C for 18 years. The problem is that Many Companies that i experience the them to have the comp or bouncing house to document the complexity of the transactions that they were doing. But the, instead of hiring 3rd Party Consultants to do that for them, the auditors was doing this for them. Because again, once you do that, management likes, you will be auditory not supposed to do that because the auditors should audit if the other part ends up doing it. Then who are these the auditors bought have repeatedly reported his findings to his superiors. Famous. I thought that they were part of those things internally in my performance writing starter to get annually the line. And i was not allowed to work on jobs progressively in this is how our water says it recalled shows that his superior said bottle was too critical of his clients management and to hire comp auditor that are more friendly or less inclined to give negative control opinions which men to that if we alone, what are the one that were giving adverse control opinion when the other 3 did not, we will not have been high ever be in the market. Morrow bottle was fired in 2017. His suit for reinstatement was dismissed by California Court in august 2021. Ah, michelle destroys the Certified Public Accountant and chairman of the association for Medium Sized Company auditing. He says the big for a forcing small or auditing firms out of the market. Just one of the reasons why hes been campaigning for years for strict a separation between odyssey and consulting her values and just did not ping his child. So you just cant phrase what a fact consulting has on the independence of the auditor as mission for falling invasion. Influenced us in proof of hunch, post moore, with following the financial crisis, the topic was put on the easy, which ended in 2010 e commission. And michelle banging, also felt the independence of auditors, was at risk with it. You. So is it healthy for the same firms to be auditing and consulting into casa, docile context, or is complete independence even possible in that context . Im all bushy. Dominance calls are often when we hoped what he said would become reality. Veterans criteria benet wanted to strictly separate auditing and consultancy. He also said company should be required to change orders every 10 years is faulty and of course a lobby. What followed was the lobbying campaign, which Michelle Bonnie correctly described as the Biggest Campaign ever in brussel tub san diego was the coordinator of the e committee on economic and Monetary Affairs until 2021. He saw lobbyists working for large auditors exit political influence in brussels. The reading a to list within a child pagan, theyre talking to the decision makers. And theyre meeting them early on him and when its crucial, as of at the commission, your, at the ministries of the members state why in the end had anything remained of michelle dannys ideas. Member states themselves got to decide which e auditing reforms, they introduced me as a specific date get. Everything was watered down. Justin established fresh, lorden gemini, introduced several exceptions. Auditors could still act as consultants to companies. They audit. And they could order to company for longer than 10 years. How this reform developed reveals another potential conflict of interest. New this we know the big for regularly getting lucrative consultants to contracts with german ministries in san offloading, e y, and even after wire card or not, these consultancy contracts still exists will begin by a few problems. These problems show that the best people no longer work in the ministries ishmael, the best lawyer to harbor this problem also applies to the order to watchdog known as a pos in germany. A period checks with the order is maintain their independence. As a half, its employees used to work at one of the big food so if you have a system where there are 4 organisation that have penetrated the Government Institution that are supposed to oversee them, they are essentially untouchable. Governments often have to rely on external experts in the big for a very happy to offer their expertise skipped stood in peak for when it comes to the big for theres a kind of Conspiracy Theory about house them shady power influences everything buys its. But thats just part of a desperate search to find a physical power not behind. Global capitalism include knocked her in global is yet. And capitalism was open. But they are obviously examples, windshield players, misty, got to i was like a nomic power gives them political weight. Ah, for antoine dell to getting a job or the big fall was a great opportunity. He started working for p. W. C in luxembourg in 2008. I did associate, im interested in numbers and im analytical. You thought this was a good fit and for middle up, he believed auditors could positively impact society. Some its year, very important for auditors to be independent issue to kill us societies rely on Financial Data being corrected at the national sir. P w. C is demanding employer with long working hours and high pressure. I have a time antoine dealt, who began to understand how luxembourg worked as a Financial Center in a demo system. So digital fits memorial superscripts did the some audits really shocked me because i was investigating empty Shell Companies called no implies no revenue. Her neural Economic Activity and luxembourg, collectively taken and were supposed to create transparency lifted up vomiting. But whats the point with empty shell . So they could either, and if i could have a song that was a dont want l to became disillusioned about the societal benefits of working as an auditor. A pete other you said he lost his motivation. After 2 years he resigned that before leaving he came across confidential tax returns. I showed that luxemburg glued International Companies with deals tailor made by p w. C. That slashed Corporate Taxes to less than one percent. Thats english gets down beside the every tax trick. Just short of illegal is being used to move profit made in one country high into another country to be taxed at a lower rate in an unknown land. First oil dragonball done not foolish destroy herbalist only to the ghost p w. C. Even prepared tax rollins with the letterhead of luxembourg tax authorities. Government officials just had to sign and Price Waterhouse coopers. I o t w. C was practically a division of luxembourg financial administration. Its unreal, wendy, on tom del to a share. The documents with a french journalist and he was then charged by luxemburg authorities in 2014 for leaking documents, bought in 2018, he was recognized as a whistleblower. He w. C isnt the only firms selling such tax strategies. They bring in a lot of money for k p. M g, e, y, deloitte, and other Tax Consultants all over the world. Yeah, of course that is some extras by 3rd. So the discussion and the big for particularly when you think about how important they are for of functioning maggard economy. Its a little bit worried that they are also in the ones who undermine the society in some ways, by showing it businesses how they can practice it. Takes aggressive us according to the european commission, the e you lose is up to 70000000000. 00 euros a year to 2 Corporate Tax tricks. Around half of the use annual budget. Where glister sha biggest damage is that people feel like some people are above the line. And those who get expert at biasing, have an International Network and dont pay their taxes on this low as the entire systems legitimacy for the schism to sawyer, this team, the common z in any z, ashley, l. Z 2 or to one vanderbilt, a smaller, vaster, difficult area. He to one is that morally objectionable to use tax laws put in place. But the legislator whos the sovereign ed skibo does as yet is vain. Zips, gazette st. Her tax competition also causes tax avoidance, because immune when is an incentive for some is a strategy for someone else. And consultants are supposed to tell their clients about the various opportunities ministers out style bladder would have a trust spoof anita if its a tax consultant or auditor. Hm. I dont do that. His, again, my clients can like their say, i caused them financial damage vide because i didnt tell them all the options isnt one of the legal options, legalities to reduce their taxes. It would, you want managed wireless skipped but the big for arent just advising their clients. What is very problematic is that many are also involved in legislation and other things in ministries thats cable alone being retarded, and ministerial every country has its own tax laws and the resulting complexity leads to a need for expertise exactly what the big for, and their International Networks offer via zene by the but i to get one to niemen. Var consulting allows us to see where the problems and the tech systems are. One of decent mingo and retail politicians, the government, the finance ministries to you on the Parliaments Parliament of mexico is concentration. Oh, its okay to speak with experts off heathen Business Experts about but when theyre practically co writing laws, without the public or even parliamentarians knowing thats a problem with us. So somebodys in problem string 2021 e y audit has come on to scrutiny. By the way, i caught Parliamentary Committee with a team of oranges was appointed, a special investigate is the committee asked them to review a wise wire card audit they findings was summarized in the when back report pulled out confidential. It was late to some journalists ah, felix haltermans works the handle, split the gym and financial paper, and had been following the wire card case for a long time. His desk also got a copy of the one back report to have amber placed at 60 gaster. The van back report is the 1st public audits of one of the big fours work order. First with findings are crucial. Hannah keaton, c o. Offish dish be investigators looked at recalls from 2016 until 2021 and try to ascertain with an e. Why should have uncovered the fraud early l mm. I cut of an in flight in 2016 to wire card. Bought a dubious indian Payments Firm for a great deal of money. If the suspicion arose that wire card managers, i made money off the deal at home in response, in my started project ring a forensic orders according to the went back report. But there were problems with z, a cleaning from by wire card managements i didnt sufficiently explain why they had overpaid for the take over the one that proposed into just a lesson from march 29th, 2017. Written by the e g y aud, sir, and addressed to the chairperson of wac had supervised report to todd. So sandys appointed mr. Abaski called jets and if these points are not conclusively clarified accident, there may be a modified opinion for the Financial Statements. We would also like to inform you that we will decide whether we can continue to Work Together based on your reaction to this letter. E y is threatening to not give an unmodified opinion or by going on to withdraw from the auditing mandate targets. This would have been a disaster for wire card. A modified opinion alone is enough for investors and banks to lose trust. But it would have also been a bit liability for the auditors. It never got out even the week after this letter. We dont know what happened during that time, the why delivered opinion modified . Did e y receive the information they needed . The special investigators said the following in their report. The information includes verbal and written explanations by the Management Board. A proper clarification of the open points cannot be found in the documents finished, you dont even want unsafe, im just having the board confirm things. Then theres no point again, then i may as well skip it. I need to maintain a skeptical attitude and assume something is incorrect, mistimed. Blue. This is the only time e y spotted top lives at y a cart. In the Supervisory Boards notes which handles black obtained the auditors said the following in 2019 to tots fife, under into quote, doubts about the managements integrity. Life at e, y doubts, the boards. Integrity, pretty much the strongest statements and auditor to make and goof about clifton can put in 2019 e y again gave why i caught an unmodified opinion, but they did refer to fraud investigations against white cod employees and singapore in their final report. E y said the following in a written statement. Very few annual Financial Statements of Tax Companies have contained such statements. This alone shows that this was an unusual measure. But the auditors comments to see little attention and why con, skilfully concealed its true value in the final report as a family plan. If you look at the Balance Sheet, you see 2700000000 euros in cash and cash equivalence. Nothing about how this also includes money in escrow, get down with a common kind of light and from a to one on the Financial Statements. It looked as if why a car was swimming in money and sent young hut in idaho through all the years. It was auditing has armed ernst and young have failed to obtain an independent confirmation that these funds existed. The desk instead, e y relied on trustees selection in a written statement, e y said the complex criminal web was designed to deceive numerous stakeholders, including investors, bank regulators, Supervisory Boards, auditors, despite their diligent and extensive efforts. E y had become suspicious, but it seems that none the less continued to trust while cots Management Board in keen moments fences if i a y, relied on board statements while simultaneously doubting its integrity by ford even as an external observer level. But that makes you wonder how e y could have issued audit certificates all those years. Wanted to this day, its unclear why e y auditors did not heed. The many warning signals, the damage to the reputation is considerable. Clients such as Commerce Bank to which a telecom in k w a Government Bank ended, they aud sing agreements with e y. In 2020 munich state, prosecutors opened investigation into the partners at e was ordered at wire card. June 2021. The Parliamentary Inquiry Committee presented its final reports on why i caught these up between this broad should have been stopped. Early on, ladies and gentlemen, again, playing with young law coolish, the auditors should have verified whether the 1900000000 euros one 3rd of the Balance Sheet was actually in a philippines escrow account of the lump sum of my m. Well, im going to, in the philippine leaked your e wise, high earning auditors failed because according to the committee was not in the audit to failed to find the case has exposed a radical failing by authority. I did, especially by boffin, my dear buffing boffin, is germanys Financial Supervisory Authority responsible for monitoring small banks. Insurance companies and security is trading ah. When in 2019 fresh fruit allegations against one cod caused a steep drop and share price barf in band investors from betting against the Company Without verifying whether they were problems with why a current Balance Sheet the financial regulated claim to that was outside its responsibilities. Ah, if im not responsible for something, its not my fault. I lost all of shelter. The finance minister at the time and the head of baffin, he held that position from 2018 to 2021 shalt. Told the Parliamentary Committee. He didnt feel baffin had protected. Why cant . But he conceded that state controls to prevent and detect financial fraud were insufficient. This up as a society does for you. Thats why its so important for us to do everything by ensuring our powers and rules are strong to prevent a repeat num does employ hitting my pursuit. The german act to strengthen Financial Market integrity or fisk was passed in june 2021. The law was supposed to help strength and confidence in the gym and Financial Market and placed more comprehensive rules on auditors. With fisk, germany implemented the e auditing reform proposed by Michelle Bonnie in 2011 p obligation to separate the auditing and consulting for Major Companies was taken seriously which is now no longer allowed to audit a publicly traded company for more than 10 years. And auditors also have more liability related to audits under civil law. Listed Stock Companies must have affected internal controls and baffin has more power and is directly responsible for monitoring Balance Sheets. Descript i know that some parts of this law a useful but when it comes to auditing, it doesnt go far enough. I would have liked a stronger separation of auditing and consulting. I know for perform bottle. Vention is skipped in cisco. I need to go to and the 1st comment has some good points to stuff, but it wont improve the quality of audits shy god. In the end, the fisk may lead to an even more concentrated, ordered market. Oh, rules means more bureaucracy, which often goes beyond the capacities of smaller firms san diego that says this disk doesnt address the actual problem. Schultz at yet, and it shows introduced strict of public supervision above in the thousands of on. But if the thousands of auditors have conflicts of interest into im intestines. Conflict like then just adding supervision on top is attacking from the wrong. And i english, thus, viet from prior, an elf, a club of his organs with early sign. Lets be honest. Non law can always prevent a wire card from happening and in fact, we way i cant definitive finan cook was an opportunist. He missed thomas hag, it is disappointed. The law hasnt restored his trust venue, shaun who is does money in my ear, and since they say pensions are safe as we move and that everyone should fend for themselves, done the government and politicians have to make sure that auditors keep an eye on things organ does uber charge prove her . Oh will please all hatch fraud and before it happens in full head, he in the talk of all shes kind what would need to happen to that to be guaranteed by would hitting i believe that in every country, the auditing job should be done by the governments not by private companies, private corporations as always, the for profit as it goals. And the conflicts that exist as far as independence, it will never be solved. Fabio did monsey would like to see radical changes to the market system. The paulson, border team and consulting fi need to be strictly separated isnt actually quite so long. We need to break up the big plays and we need to require the inclusion of mid sized auditors from middle initial boyfriend, her name when it comes to incorrect Balance Sheets, class pete. And now mom says the companys a primarily responsible of the Supervisory Board has to ensure a compliance. If the board isnt doing its job, authorities must intervenes and buffet needs more. Right. And how much public involvement you would want in any solution and much, much market based involvement, you would want in any solution. That is a political question. Why a card shows once again that audits cannot office is tisha protection against financial fraud. Markets need reliable monitoring free of conflicts of interest. With shift your guide to life in the digital world. Explore the latest online trends. Navigate your way through the digital jungle. Get a global perspective. Well be your guide and show you whats possible. You decide what really matters to you. Shift in 15 minutes on d, w. The 77 percent. Governments should realize that we tally seen the never solve for me because gambia, rob, michaela is agrees with me. Here we only demanded, call yall to let us get mystery in please. What were seeing is that the internet, they said no need to get us out because we only demanding quite out to help us out. Im calling the north african roost. We like to piece Bully Assembly to 77 percent. We can no longer give you a 30 minute response to have w numbers. Oh. And these places in europe were smashing the records, stepped into a bold adventure. Its the treasure map for modern globetrotters. Discover some of europes record breaking sites on. I know also in book form ah ah, this is w news alive from berlin, ukraines president orders all civilians to evacuate from the east and province of done yet. But he was lensky warned, fighting will intensify. Us. 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