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Speaking of Deloitte, they were the auditors when the Spanish bank Bankia (then a newly formed conglomerate of 6 saving banks, with Caja Madrid as the cornersto

Speaking of Deloitte, they were the auditors when the Spanish bank Bankia (then a newly formed conglomerate of 6 saving banks, with Caja Madrid as the cornerstone) went public. A report was produced by Deloitte saying that the financial statements provided by the bank were accurate and that going public was a viable strategy. The moment the bank went public their valuation went down and months later the Spanish central governement had to inject 23 billion euros (of EU money) into the bank. We know now that that Deloitte's report was based not on actual independently collected and analyzed information but on "possible future scenarios" outlaid by Bankia's executives. In court, Deloitte's representatives argued that they really hadn't had access to the necessary information to produce the audit. So what did Deloitte's dozens of employees worked on for months? Why did they produce a report that couldn't possibly know if it was accurate? Bankia, Abengoa, Livent, Standard Chartered, Carillion... the pattern is always the same: "we can make it go any way you want".

harperlee 7y ago
You are mixing 2 different tasks that create your confusion: - the tentative review of a proforma version of accounting used for the IPO, which Deloitte did not sign but where heavily discussed and to which Deloitte have access. - the formal audit of the financial statements, for which Deloitte did NOT give the ok (Francisco Celma, the responsible partner, did not sign), as it was not given all the information (but they did have items to work on, just not everything needed). Rodrigo Rato, then Bankia’s CEO, pushed Celma to sign without having reviewed all info; when he refused, Rato went forward with the IPO nonetheless. Also I think it is Celma in particular, and not Deloitte as a company, who is being sued (or is the one legally liable, irrespective of the suit; can’t really remember )

harperlee 7y ago

You are mixing 2 different tasks that create your confusion: - the tentative review of a proforma version of accounting used for the IPO, which Deloitte did not sign but where heavily discussed and to which Deloitte have access. - the formal audit of the financial statements, for which Deloitte did NOT give the ok (Francisco Celma, the responsible partner, did not sign), as it was not given all the information (but they did have items to work on, just not everything needed). Rodrigo Rato, then Bankia’s CEO, pushed Celma to sign without having reviewed all info; when he refused, Rato went forward with the IPO nonetheless. Also I think it is Celma in particular, and not Deloitte as a company, who is being sued (or is the one legally liable, irrespective of the suit; can’t really remember )