There has been a lot of focus lately on cosy client-auditor relationships that allow companies get away with fiddling their books, even fraud. The uproar over the way Ernst&Young allowed its client Lehman Brother to hide toxic assets through accounting trickery, something I looked at in my blog entry here, is a case in point.
There is no doubt that E&Y had a close relationship with Lehman. As Tax Guru points out in his blog , Lehman Brothers had paid E&Y $160 million in audit fees since 2001 and the relationship goes back to 1994. Now, $160 million represents a significant auditor-client relationship.
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