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They haven't done anything wrong AFAIK; they didn't sign off on an audit, and withdrew, which is the reality of many smaller accounting practices taking on unfa

by rchaud 4y ago

They haven't done anything wrong AFAIK; they didn't sign off on an audit, and withdrew, which is the reality of many smaller accounting practices taking on unfamiliar clients. Arthur Anderson knowingly fudged the numbers at Enron, and provided both accounting and consulting services, which was a big conflict of interest. The consulting arm came up with new type of revenue opportunities (energy contracts), and the accounting arm cooked the books to show that these were profitable.

jacquesm 4y ago
Mazars has already been cautioned - together with BDO - regarding their oversight on crypto, the regulators have essentially told them to improve their quality before they grow these branches of their corporation further. That puts them on petty thin ice. Arthur Andersen messed up big time, not in the least because their Chinese walls failed in every way imaginable but the parallel is pretty close: all of these companies are chasing new markets with abandon when in fact they should out of caution rather than regulatory pressure slow down and do their jobs properly because the financial world depends to a very large extent on that.
josh2600 4y ago
It’s actually so nuts. People rarely get into the details of how crazy accounting was in Enron. They made an agreement to build a power plant, then booked 50 years of profit from operating it before they broke ground.
- Bayart 4y ago
  I knew about accounting for lifetime costs, but accounting for lifetime profits is a new one hahaha.
  - willcipriano 4y ago
    https://en.m.wikipedia.org/wiki/Mark-to-market_accounting https://en.m.wikipedia.org/wiki/Mark-to-market_accounting
- perlgeek 4y ago
  ... and shortly after the deal was signed (and the projected profit added to the books), the contract was swapped out / "sold" to a subsidiary mostly owned by Enron, and selling this propped up the books even more. The associated debt was in the subsidiary, and thus didn't show up on the balance sheet.

by rchaud 4y ago

jacquesm 4y ago

Mazars has already been cautioned - together with BDO - regarding their oversight on crypto, the regulators have essentially told them to improve their quality before they grow these branches of their corporation further. That puts them on petty thin ice. Arthur Andersen messed up big time, not in the least because their Chinese walls failed in every way imaginable but the parallel is pretty close: all of these companies are chasing new markets with abandon when in fact they should out of caution rather than regulatory pressure slow down and do their jobs properly because the financial world depends to a very large extent on that.

josh2600 4y ago

It’s actually so nuts. People rarely get into the details of how crazy accounting was in Enron. They made an agreement to build a power plant, then booked 50 years of profit from operating it before they broke ground.

Bayart 4y ago
I knew about accounting for lifetime costs, but accounting for lifetime profits is a new one hahaha.
- willcipriano 4y ago
  https://en.m.wikipedia.org/wiki/Mark-to-market_accounting https://en.m.wikipedia.org/wiki/Mark-to-market_accounting
perlgeek 4y ago
... and shortly after the deal was signed (and the projected profit added to the books), the contract was swapped out / "sold" to a subsidiary mostly owned by Enron, and selling this propped up the books even more. The associated debt was in the subsidiary, and thus didn't show up on the balance sheet.