Saturday, March 14, 2009

Merrill's Controls

"Ineffective internal controls at Merrill Lynch caused the firm to understate its 2008 losses by more than $500m, the investment bank said yesterday in its annual report. ... Auditor Deloitte & Touche concluded that Merrill had 'not maintained effective control over financial reporting' as of the end of 2008", Greg Farrell at the FT, 25 February 2009.

What's new? Why didn't Deloitte, which got paid $57 million in 2007 find this before? What's really going on here?

1 comment:

Anonymous said...

Geez... the economics of this are beautiful...

Spend $57 million and save $500 million... (haha)

I gotta think laxity pervaded the accounting methods at ol' Mother Merrill for awhile... like how was the structured junk valued by the auditors?

Stinky problem?