Why . Oh, theyve been called the watchdogs of capitalism. The conscience of the free market and the pin stripe mafia. The big full audit is ernst and young k, p m g p, w c. And to know what 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 me. They influence politics and legislation with wilkerson. We cant work without the 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 las vegas 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 know never before has there been such a plummeting dax and sing lung audited . Why cant Financial Results for years . 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 orders, his in the spotlight. Are they taking shortcuts . Are they overwhelmed . Or is the system at fault . Ah, yes, ah thomas here it is replied. His passion is building guitars. The 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 would. Oh. Instead, he invested most of his savings in a promising german company. Id id, kind these equal floyd, im inch. Im not a risk taker, omission. Which is why i didnt buy just any stock. Even i bought wire card. Octave coughed all it had seemed a safe bet, but then the company suddenly crashed along with the chairs and started to computers. I rented a food so big that the stock would become almost worthless. I didnt think it was possible at my service guy. Why cant lost a total of 10000000000 euros in market capitalization . Raising many questions. Me though is how could he owe to the following . And i think that the Payment Processing company was fudging as well in senior year. Younger finance minister blames the private auditors. He should, i climb under a small investor like me cant check where the wire card statements are true. Austin managed Thomas Harris has joined a Class Action Lawsuit against white cards, auditor clift. They carry some blame. They should have been more careful. But who are thomas haggard and the other small investors up against ernst and young or 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 tells home is doing her ph. D at copenhagen business school. Shes been researching the big for and the role they play in the economy and 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 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 when indies. This was the context in which legislators introduced statutory audits for Stock Companies in 1931. Hes off go about invo trust. We flew but hard. Globalization accelerated the economy. Companies grew quickly informed, International Networks. Auditors grew to in the 1980s, 8 Accounting Firms dominated the international industry. He expanded and merged, forming the big sea then it became the b 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 orders in 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 job them 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 spoof from 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 any good between entities for camida . When a Company Opens its books, its business is late. Theyre 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 his gen, a tenant 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 snow falls in the companys annual Financial Statements, they give whats called an unmodified opinion, a seal of approval for the company. The oldest is verdict, a wire card was trusted for many years. And to this day, e y maintains it audited. Why cant the best of its knowledge and according to protocol, when by voicemail inter name initial for him pushed it, hes Companies Like that land and auditors dont notice its over, because then we can no longer rely on the very foundation of slim namely mister number michigan philosophy fabio de monte coach shed jeremys was caught Parliamentary Inquiry Committee. Together with parliamentarians from all political parties, demands, he began investigating the German Companies collapse. Not till the 2020. The Committee Questioned a 110. 00 witnesses of 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 takes inflated its results with fake sales. And k, p. M g didnt notice. Then either leading to damages of more than 5000000000. Deutsch 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 filed for bankruptcy in 2001. The 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 it financial situation. Yes. And he was kept to proving they cooked books. Ah, the bell markets are in shock. The stocks are plummeting out. 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 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. But can we say that because of these 10 scandals and 90 years . Thats auditing truck, which checks thousands of Financial Statements every year. How 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 east de from auditing this the public trust in a company and finances in i own use book trust, fund. Antonyms that and me ring is an expert on Financial Statements and consultant. She says the fact that Companies Pay their auditors is problematic, or many lies to happen to this student in the chin the sign. But if we agree on the deadline, and i dont meet it, increasing costs, and then decline might say, i see that you stay within it or next year well hire another old, non profile on swan del to is all too familiar with this pressure. He worked as a junior auditor, p w c in luxembourg for 2 years or the call figures was basically an auditor. See something, you know, its against his interest to speak up, especially if they dont want to correct it. Just, its impossible to audit well a moment. Mm. And theres an additional factor complication the Auditor Company relationship. Next to auditing. The big 4 also offer consulting. They advise clients on digitalization, fillasy and texas. The big 4 are incredibly influential in a market economy. They have a lot of services that really impact how business is done. Sinus style 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 falls, cold business used to be order thing, but now at any accounts for around a 3rd of their revenue around 2 thirds comes from consultancy, then hes not to revise. If i know the auditing market has 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 had a fluke. Z kept valley. Tate endeavor trots boom square traffic when he moved to not doing well financially. Insurance quality at the auditing firm. Im in the or id like to add thoughts doing well financially. Also secures financial independence. Not pinkies. Im the only one who isnt financially independent and is probably most likely to look the other way. And for a client, theyre auditing when they shouldnt have been a neat tune. Zoe, to profit major consulting, and she was, auditors can remain independent, at least according to class. Peter norman, but is this theory true or this 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 didnt have the comp or bouncing house to document the complexity of the transactions that they were doing. But 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 the, the auditors bought repeatedly reported his findings to his superiors. Since i started to report of those things internally and my performance ratings started to get annually decline, and i was not allowed to work on jobs progressively in this is how much of 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 forcing small auditing firms out of the market. Just one of the reasons why hes been campaigning for years, restrict a separation between odyssey and consulting her values and foster you. Not pinkish china, you just cant trace what a fact consulting has on the independence of the auditors. Mission for falling invasion, influenced us of improve, havent plus mila. With following the financial crisis, the topic was put on the e, which end in 2010 e commission. And michelle, danielle also felt the independence of auditors was at risk a if you so is it healthy for the same firms to be auditing and consulting . It you can say 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 auditors every 10 years. As for the 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 to this within a shadow striegel, theyre talking to the Decision Makers and theyre meeting them early on him and when its crucial, as of at the commission or at the ministry of the members state. Often in the, in hotly anything remained of michelle dannys ideas. Member states themselves got to decide which e orbiting reforms, they introduced me as a special needs kids. Everything was watered down. Justin is up to special origin. Mm. Gemini, introduced several exceptions. Auditors could still act as consultants to companies. They audit. They could order the 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 his hand. Al clothing, e, y, and even after wire card or not, these consultancy contracts still exist will begin by a ton to problem was these problems show that the best people will no longer work in the ministry as ishmael. The best law 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 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 untouchable. Governments often have to rely on external experts in the big for a very happy to offer their expertise skips it in peak for when it comes to the big for theres a kind of Conspiracy Theory about house them. Shady power influences everything, but its, but thats just part of a desperate search. Had to find a physical power not behind. Global capitalism include knocked her in global is yet, and capitalism was open. But they are obviously example when she plays misty goc to i was like an army, howard gives them political slate. Ah, for all torn del, to getting a job, the big fall was a great opportunity. He started working for p. W. C. In luxembourg, in 2008, i did, i switched new. Im interested in numbers and im analytical. And so this was a good fit sample nebula. He believed auditors could positively impact society. Some its you very important for auditors to be independent sort of careless societies to rely on Financial Data being corrected with the national sir. P w. C is demanding employer with long working hours and high pressure. Over time, antoine del to a, began to understand how luxembourg worked as a Financial Center in a demo system. So digital fits mormon loyalty passcode, which did the some audits really shocked me. Because i was investigating empty Shell Companies called no implies no revenue, her no real 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 it either. And if i could have solved that was a dont want l to became disillusioned about the societal benefits of working as an auditor, a 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 glued International Companies with deals tailor made by p w. C. That slashed Corporate Taxes to less than one percent. Thats english gets down bys and every tax trick, just short of illegal is being used to move profit made in one country that high into another country to be taxed at a lower rate in an unknown land. First oil bradon vol. Done. Not foolish destroyer blast only to the ghost. P w.