Professional Services Monitor: Today

 

June 18, 2007

BDO Loses First Phase of ES Bankest Negligence Case

Filed under: Firms,Liability — psmtoday @ 10:14 am

Last Friday, BDO Seidman lost the first phase of an neglicence suit in Miami.

In a verdict that could have severe consequences for BDO Seidman, a Miami jury on Friday decided the world’s fifth largest accounting firm was negligent in failing to detect a massive fraud that cost a Portuguese bank $170 million.

Banco Espirito Santo had sued BDO Seidman in 2004 over the collapse of a financial services firm, E.S. Bankest, that the bank helped start. BDO Seidman was E.S. Bankest’s auditor for seven years.

This first verdict allows Banco Espirito Santo to pursue punitive damages as high $510 million. The second phase of the trial begins this week.

In January, the Wall Street Journal covered the start of the trial in this case, and noted that BDO was bucking the trend of the Big Four to settle high-stakes cases. According to that WSJ article, BDO said that an award of $170 million could “lead it to forgoing its position of one of the top accounting firms in the United States, and to the displacement of thousands of accountants, auditors and staff.” The article quoted BDO’s general counsel, Scott Univer, “We do settle cases. But there are situations where, if we’re accused of fraud or collaboration or misconduct, we have to draw a line. We’ll see you in court.” Prior to this case, BDO had taken six cases to trial in the US during the past 12 years, and won all of them.

Via AccMan: “BDO Seidman negligent – on the hook for $510 million”

June 15, 2007

Accounting Camp for High Schoolers

Filed under: Careers,Ernst & Young,Firms — psmtoday @ 9:19 am

Via a posting at JobsInTheMoney, Ernst & Young and the University of Arizona’s Eller College of Management are sponsoring a summer program for minority high school students to promote careers in accounting.

This year, 21 juniors and seniors are staying in UA dorms for a week and getting a taste of both college life and the field of accounting.

“Accounting has a geeky, green eye shade kind of image,” said Mark Stephens, managing partner of the Phoenix office of Ernst & Young, where the students spent Tuesday learning about the company. “We want to share with them how interesting and diverse a field it is.”

Better yet, this is the third year of the program.