What 5th, hulu. Live being called the watchdogs of capitalism. The conscience of the free market and the pin stripe mafia. The big full audit is ernst and young tape e m. G, p, w, c, and duluth. The big 4 are incredibly influential in america because they are indispensable experts with an in depth knowledge of companies and tax law. Theyre much too powerful to make. They influence politics and legislation model, cuz thats when you come to work without the big for they have an Important Role auditing, corporate Financial Statements. Its extremely important for us as consumers and for people who are in this, this to trust the information we are given. But 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 climate in the docs and sing lung audited . Why cause Financial Results . Fee is without uncovering, the fraud is county signed as feler d for mistakes from 90 years ago, which led to our profession should not have repeated. See, 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 . I ah, thomas haggard is replied. 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. And though, and i 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 musicals already damage. Im not a risk taker. Oh, which is why i didnt buy just any stock. Even i bought why i got caught up in cost of it had seemed a safe bet. But then the company suddenly crashed along with the chairs with a stop 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 he owe to the following that the Payment Processing company was fudging as well and seen the 0 younger finance minister blames the private auditors short. I climb under is a small investor like made con, check where the wire cod statements are true. Austin managed thomas haggard, has joined a Class Action Lawsuit against white cards, auditor clift. They carry some blame. They should have been more careful missing. But who are thomas haggard . In the other small investors up against ernst and young o e y became the song auditor of y card 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 townhome is doing her ph. D at copenhagen business school. Shes been researching the big 4 in the role they play in the economy and size 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 us to trust the information we are given. And our only weapon really is the 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 off guard back in virtual twin about harden globalization accelerated the economy. Companies grew quickly informed, International Networks. Auditors grew to in the 1980s, 8 Accounting Firms dominated the International Industry a expanded and merged forming the big 6 then it became the b 5. And just a short while later, the big 4 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 or the scene rules. The privately run organization represents the interests of more than a 1000 public ordering firms in germany, including the big 4 ah, close by no means says the job, the auditor is clearly defined. Ah, desk auditors are required by law to carefully verify annual Financial Statements spoof mm. They are also supposed to maintain professional skepticism toward the companies they audit, and follow a specific procedure ah, an actual perform east of us. An audit is designed to detect errors in Financial Statements of to the weather. Due to fraud or not is irrelevant, would only be between students for camida when a Company Opens its box, its business is laid there in 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 examiner 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 Statements, they give whats called an unmodified opinion. A seal of approval for the comp. The oldest is verdict, a wire card was trusted for many years. And to this day, e, why maintains it audited . Why cant the best of its knowledge and according to protocol, when by social inter name initial for him posted if Companies Like that land and auditors dont notice it, because then we can no longer rely on the very foundation of lim. Namely mister number is philosophy. Fabio de monte coche . She had germanys why ca, Parliamentary Inquiry Committee. Together with parliamentarians from all political parties, demands, he began investigating the German Companies collapse. Not tobar 2020. The Committee Questioned a 110. 00 witnesses of 9 months. When 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. 5 years, Horizontal BoringMachine Company flow checks in places. Its results with fake sales. And k, p m g didnt notice then either leading to damages of more than 5000000000. Toich 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 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 why kept a proving they cooked books ah, developments its are in shock. The stocks are plummeting. Lehman brothers eventually collapsed and a massive debt in 2008, triggered 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 fy uncertain fiddler font. These are isolated cases of corporate fraud that auditors failed to detect at sophia, and each case is one to many than oust scenes. What can we say that is because of these 10 scandals and 90 years . Thats auditing truck, which checks thousands of Financial Statements every year. How it doesnt work was performed. We should auditors really help uncover corporate scandals and 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. Then the vote trust is crucial. East div from auditing booths, the public trust in a company on its finances. In an on leesville trust fund intern named staton. With honoring k is an expense on Financial Statements and a consultant. She says the fact that Companies Pay their auditors is problematic, or when he lies, the shopping 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 auditor. He makes 99 proof on swan del 2 is all too familiar with this pressure. He worked as a junior auditor at p w. C in luxembourg for 2 years already during the course, the garage was basically of an auditor, see something feel its against his interest to speak up, especially if they dont want to correct it deducted. Its impossible to audit well, im only in abilene, i am. And as an additional factor complication the Auditor Company relationship next to auditing the big for also of 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. You cannot see someone as a your client and then also investigate them critically. As the regulator, you have to be on one side or the other. The big fall was called business use to be order thing. But now at any accounts for around a 3rd of their revenue. Around 2 thirds comes from consultancy. Many centrally via 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 and lies them and so beaten virtuously here at folk c. Kept valley tate endeavor, trots with homeschooling traffic when he mixed in. Not doing well financially. Insurance quality at the auditing firm. Im in the all. Id like to add thought is doing well financially. Also secures financial independence. Not pinkies. Im the only one who hasnt financially independent and its probably most likely to look via the way him for a client. Theyre auditing when they shouldnt just be 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 as 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 3rd of 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 it for them. Because again, once you do that, management likes to be auditory not supposed to do that because the auditors should audit if the other part ends up doing it. Then who are the, the auditors what have repeatedly reported his findings to his superiors. Famous. I thought that was part of those things internally in my performance ratings started to get annually decline, and i was not allowed to work on jobs progressively. This is how our water says it recalled shows that his superior said bottle was too critical of his clients management. And to hire the thought that are more friendly or less inclined to give negative control opinions, which meant 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 been the market. Morrow bottle was 5 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 forcing small 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 solstio opinions. China, you just cant trace what a fact consulting has on the independence of the auditors mission for, for the vacant emphasis of in proof. Of post moore with following the financial crisis, the topic was put on the easy, which ended in 2010 each. Commissioner michelle banging, also felt the independence of auditors was at risk if you so is it healthy for the same firms to be auditing and Consulting Agency . Docile context or is complete independence even possible in that context . Im all bushy. Domlyn schools are often and we hoped, what he said would become reality veterans criteria. Vanya wanted to strictly separate auditing and consultancy. He also said, company should be required to change orders, his every 10 years is faulty, and of course, a lobby. What followed was a lobbying campaign which michelle bonnie, a 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 2015 in china striegel, 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 in hattie anything remained michelle daniels, 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 Ministry since and 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 hobble this problem also applies to the order to watchdog known as a pos in germany. A peer, yes. Checks with the order is maintain their independence. As a half, its employees used to work at one of the big for 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 approachable. 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 by 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 i. But they are obviously exactly when she plays this misty doctoral. I was like a nomic power gives them political slate. 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. At that associate, im interested in numbers and im analytical that you thought this was a good fit. And for mid law, he believed auditors could positively impact society. Some its years, very important for auditors to be independent is, would kill us societies rely on Financial Data being corrected with the national sir. P w. C is demanding employer with long working hours and high pressure. By the time antoine del to a began to understand how luxembourg worked as a Financial Center in the demo system. So did offered memorial soup as good 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 actually 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 it, so that was a non to until to became disillusioned about the societal benefits of working as an auditor. P w. C. He lost his motivation. After 2 years, he resigned that before leaving, he came across confidential tax returns. I showed that luxemburg Lloyd International companies with deals tailor made by p w. C. That slashed Corporate Taxes to less than one percent. Thats english gets dam by