The AuditorsYesterday’s appointment of Big 4 accounting firms PricewaterhouseCoopers and Ernst & Young
to oversee the $700 billion Wall Street bailout program is a slap in the face to the American taxpayer.
PricewaterhouseCoopers has been appointed auditor for the bailout program under which Treasury
will buy billions of dollars worth of preferred stock in a move to help recapitalize struggling banks.
Ernst & Young will provide general accounting support.
But the US Treasury has let
wolves
into the hen house. All the Big 4 audit firms are
complicit in the
malaise now sickening the global financial services sector. They are
partly to blame for the gangrene that threatens capitalism worldwide.
It is an insult
to taxpayers that firms with numerous examples of poor
performance – and failure
to identify some of the largest corporate
frauds in history – are now are being asked
to audit the biggest
financial transaction in history.
If only the Big 4 audit firms had told us that some of the banks were
technically
insolvent or potentially illiquid under certain scenarios.
If only they had warned
us or stood up to their clients sooner.
Instead, they are benefiting from their
professional ineptitude.
The Treasury’s
press release does not state who will monitor
PricewaterhouseCoopers and Ernst & Young in performing their duties.
Credit rating agency Standard & Poor's was on the hot seat
Wednesday as
employees testified before the House Oversight Committee
for overinflated
ratings of bonds that turned out to be risky. CNBC
divulged the text of an
incriminating instant message exchange between
two unidentified S&P officials
over a mortgage-backed security deal
on April 5, 2007:
S&P Officials: We'd Do a Deal 'Structured by Cows'