$30 Billion of Shareholder Losses with One Thing in Common
In 2020 Wirecard, Luckin Coffee and NMC Health collectively cost shareholders $30 billion dollars in 2020. All three were accounting frauds that took years to uncover, and all three had been audited by Ernst & Young. Per an article in the WSJ:
EY is one of the Big Four accounting firms, whose audits are meant to give investors confidence in companies’ figures. EY missed red flags or failed to aggressively pursue them at some of the companies ahead of their scandals, and for the most part it was outsiders who raised questions first, a review based on publicly available documents and interviews with people close to the events shows. Now, regulators are scrutinizing EY’s work.
What do you believe the role of the auditor should be?
Source: Patricia Kowsmann, Mark Maurer and Jing Yang | “String of Firms That Imploded Have Something in Common: Ernst & Young Audited Them” | The Wall Street Journal | 10/16/2020 | Visit