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With Deloitte Humiliated, A Quick Look At Its Other, Best Known Client

Tyler Durden's picture


HP is about to throw Deloitte under the bus for its epic bungling and lack of auditing of Autonomy, which if HP's allegations are true, and there is no reason to believe they aren't, has been cooking its books for years. But don't weep for Deloitte. It will retain that other, far more lucrative client, the Federal Reserve System of the United States. Surely those numbers could never be cooked. Forget about "Audit the Fed" - it is time to start thinking about "Auditing the Auditors of the Fed."

Source: Fed


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Tue, 11/20/2012 - 12:03 | 2998844 SokPOTUS
SokPOTUS's picture

Haskins, Sells, Touche and Ross are rolling over in their graves...

Tue, 11/20/2012 - 12:15 | 2998893 Buckaroo Banzai
Buckaroo Banzai's picture

They don't call 'em "Toilet and Douche" for nothing.

Tue, 11/20/2012 - 12:28 | 2998953 Bananamerican
Bananamerican's picture

"time to start thinking about "Auditing the Auditors of the Fed.""

 I'm going to hit the ground running on this one...

a new concept in best business practices:

The Amerikan Association of Auditors of the Auditing Auditers Korporation



Tue, 11/20/2012 - 12:42 | 2999027 gmrpeabody
gmrpeabody's picture

Never happen..., TBTA!

Tue, 11/20/2012 - 12:42 | 2999030 knukles
knukles's picture

Word has it there are no books to cook at the FED.
Already been done.

Tue, 11/20/2012 - 12:55 | 2999091 doomandbloom
doomandbloom's picture

HP is not blaming Deloitte .


"The board relied on financial data audited by the Deloitte accounting company and, during an extensive due diligence process, HP brought in KPMG to audit Deloitte’s work, she said.“Neither of them saw what we now see after someone came forward to point us in the right direction.” FT

Tue, 11/20/2012 - 13:01 | 2999112 irishlink
irishlink's picture

Of course KPMG found nothing wrong!! They were only double checking the numbers presented by Deloitte. I am sure they did not have access to years of financial documentation presented by Autonomy

Tue, 11/20/2012 - 13:28 | 2999191 fourchan
fourchan's picture

Deloitte is a name on every stock i short, they are the last bastion of shitty accounting and zero credibility companies.

Tue, 11/20/2012 - 13:49 | 2999260 Blankenstein
Blankenstein's picture

Especially when they have partners like this douche:

Tue, 11/20/2012 - 12:04 | 2998847's picture

this has to be a joke....right?

Tue, 11/20/2012 - 12:07 | 2998856 fonzannoon
fonzannoon's picture

I am laughing but I am pretty sure it's not funny.

Tue, 11/20/2012 - 12:16 | 2998899 Buckaroo Banzai
Buckaroo Banzai's picture

It's a joke all right-- and the joke's on YOU.

Tue, 11/20/2012 - 12:15 | 2998894 vast-dom
vast-dom's picture

OT quote from comment:


"The 21st Century Act: Final Amendments to Regulation CC Section: 

"Prohibits" reimbursement of Credit, Loan, and Finance Balances to a "Bank Entity" leaving only "Nonbank Consumers" able to receive reimbursement, as specified on Pages 85 and 86.The 21st Century Act states on pg. 85 and 86 that "Only Nonbank Consumers can suffer losses and File for 

Re-credit or Re-claim on any Accounts under the Federal Reserve System" also "Any Second or Third Party Presenters utilizing a Banks Documentation, Contracts and/or Agreements to seek Claims shall be considered to be that Bank under the Rules and Regulations", the Expanded Definitions also includes Credit Cards and Home Equity Lines of Credit. 

Also on Pages 100 and 101 "In any Financial Claims the Indemifying Bank (Parent Bank) must be Identified".(Left-Click to Search Link)

21st Century Act: Final Amendments to Regulation CC This Federal Law signed January 1, 2006 makes it "Fraudulent" and therefore "Illegal" for the 3 Major Personal Credit Reporting Agencies: Equifax, Experian, and TrasUnion to allow the Banks and the Banks "Third Party Presenters" to place any claim of "Negative" or "Potentially Negative" Accounts on your Personal Credit Based upon the fact that they have no "Legal Grounds or Claim" to the Money. This is an "Unfair Practice" that diminishes our Financial ability to support ourselves and adversely affects our ability to gain work in many areas which breaks "Antitrust Laws". These Rules also back claims of: "Aiding and Abetting" Racketeering and Extortion (of Finance Accounts and Personal Credit Reports), Pandering (of Credit and Loan Accounts, and Conspiracy to wit), Theft, Fraud, Federal Mail Fraud, and Telephone Harassment. Also "Threatening of the U.S. Financial Infrastructure", which is a "Capital Crime".In order to engage the Federal Trade Commission to act against this injustice we must File many Claims, as these Reports must be Filed by a large number of people in order for the Federal Trade Commission to pursue "

Tue, 11/20/2012 - 12:06 | 2998851 Cdad
Cdad's picture

LOL!  Just the perfect cherry on the top of this steaming pile market. 

MOAR accountant pink slips, please!

Tue, 11/20/2012 - 12:17 | 2998902 Cdad
Cdad's picture

Not only is the Federal Reserve Bank coming into the public eye now as the true source of financial corruption [thank you Mr. Bernanke for all the bank bailouts], now we enter the phase where it literally could f'n laughing stock.

MOAR Princeton professors in charge of everything, along with Goldman bankers!

LOL!  Just perfect.  Keep it up there, Wall Street criminal syndicate!  You are doing more to finally fix this whole situation than anyone could reasonably wish for.  Bring on Earnst and Young!!  And rally the S&P while you are at it!

LOLOLOLOL! Whew!  lolololololololol   lol.  

Tue, 11/20/2012 - 13:00 | 2998914 Cdad
Cdad's picture

Quick!  Announce the next QE plan!

Tue, 11/20/2012 - 13:03 | 2999114 Cdad
Cdad's picture

And here he comes....the laughing stock, aka Ben Bernanke, to tell the world that all is well.  Can't wait.

Higher!  Higher as SPY volume goes to ZERO!

Tue, 11/20/2012 - 12:07 | 2998857 centerline
centerline's picture

That letter says a whole lot of nothing.  I write the same sort of fluff all the time in my career to make non-technical knuckleheads go away.

Tue, 11/20/2012 - 12:08 | 2998858 arkel
arkel's picture

As if Deloitte would have the balls to report anything negative about the Fed. I would think the Fed just tells them what they must report.


Tue, 11/20/2012 - 14:44 | 2999427 machineh
machineh's picture

... then credits Deloitte's account with newly-created thin-air dollars upon 'compliance.'

And reminds Deloitte that there's more where that came from ... INFINITELY MOAR!

Tue, 11/20/2012 - 12:09 | 2998861 JPM Hater001
JPM Hater001's picture

These aren't the droids you are looking for.

Tue, 11/20/2012 - 12:10 | 2998867 NoDebt
NoDebt's picture

"Where's that rubber stamp?  Dammit, I just spilled coffee all over my new tie.  Great.  Just great.  Dolores, could you get in here and find my damned rubber stamp for me, please?"

"Yes, Mr. Deloitte.  Right away."

Tue, 11/20/2012 - 12:10 | 2998870 Frank N. Beans
Frank N. Beans's picture

does it really matter who does the audits??  does it really matter??

Tue, 11/20/2012 - 12:23 | 2998934 JPM Hater001
JPM Hater001's picture

It ALWAYS matters who counts the ballots the gold the silver the debt the...

Tue, 11/20/2012 - 12:10 | 2998872 Lendo
Lendo's picture

LOL you can't make this stuff up!  Or in Deloitte's case, you can for only so long.

Tue, 11/20/2012 - 12:11 | 2998874 cherry picker
cherry picker's picture

Accounting is so far off its original purpose the term books doesn't mean anything anymore.

Tue, 11/20/2012 - 12:17 | 2998901 optimator
optimator's picture

Well, the second set of books is important because it tells them the real shape they're in.

Tue, 11/20/2012 - 12:12 | 2998875 Northeaster
Northeaster's picture

"Special thanks goes out to the FASB for making this all possible"

Tue, 11/20/2012 - 12:13 | 2998881 williambanzai7
williambanzai7's picture

As a reminder, Arthur Anderson did not go down based on the similarly flimsy letters it issued for Enron. This is the garbage these firms are paid to generate.

It went down for shredding documents and the ensuing cover up.

Tue, 11/20/2012 - 12:18 | 2998911 Buckaroo Banzai
Buckaroo Banzai's picture

"shredding documents"... you mean "adhering to their document retention policies", right??

Really one of the perfect Orwellian moments of recent times.

Tue, 11/20/2012 - 12:21 | 2998925 williambanzai7
williambanzai7's picture

The whole system is rigged. It really is just like that Thomas Nast cartoon, he did it.

Tue, 11/20/2012 - 12:32 | 2998978 WillyGroper
WillyGroper's picture

Isn't that the Fawn Hall generally accepted accounting practice?

Tue, 11/20/2012 - 12:13 | 2998883 Yen Cross
Yen Cross's picture

 One can only hope this opens a much bigger can of worms... GAP, what a fucking joke!

Tue, 11/20/2012 - 12:28 | 2998964 ekm
ekm's picture

It looks like Deloitte & Touche will become Toilet & Douche.

Tue, 11/20/2012 - 12:39 | 2999014 moonman
moonman's picture



Tue, 11/20/2012 - 12:57 | 2999098 Jr Deputy Accountant
Jr Deputy Accountant's picture

If you meant "GAAP," the Fed doesn't use it like everyone else does. They write their own accounting rules:

The financial statements of the Board of Governors and the consolidated LLCs are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"); those of the Federal Reserve Banks are prepared in accordance with the Financial Accounting Manual for Federal Reserve Banks ("Financial Accounting Manual"). Accounting principles for entities with the unique powers and responsibilities of the nation's central bank have not been formulated by accounting standard-setting bodies. The Board of Governors has developed specialized accounting principles and practices that it considers to be appropriate for the nature and function of a central bank. These accounting principles and practices are documented in the Financial Accounting Manual.

If you meant GAP the store, I agree.

Tue, 11/20/2012 - 12:13 | 2998884 Rustysilver
Rustysilver's picture

You see only what you want. Why dig deeper. That involves work.

Tue, 11/20/2012 - 14:18 | 2999336 hidingfromhelis
hidingfromhelis's picture

You only see what you're paid to see.

Tue, 11/20/2012 - 12:15 | 2998889 optimator
optimator's picture

If these companies find an auditor that's pretty sharp and coming up with fraud?  They hire the guy!  Next auditor please.

Tue, 11/20/2012 - 12:15 | 2998890 Gandalf6900
Gandalf6900's picture

Deloitte: Whats for dinner?

Da Bernank: Cooked Books?!?!

Tue, 11/20/2012 - 12:17 | 2998905 ebworthen
ebworthen's picture

What is accounting again?

Is that the "2 for me, 1 for you" counting method?

Tue, 11/20/2012 - 12:33 | 2998988 WillyGroper
WillyGroper's picture

I think it's 2 for me none for you.

Tue, 11/20/2012 - 14:46 | 2999433 machineh
machineh's picture

'One for you, nineteen for me.' -- Beatles, Tax Man

Tue, 11/20/2012 - 12:17 | 2998908 mess nonster
mess nonster's picture

Looks like Kol Nidre to me.

Tue, 11/20/2012 - 12:18 | 2998910 Nobody For President
Nobody For President's picture

Is it because of the Thanksgiving holiday that the Friday night humor is WAY early this week?

Tue, 11/20/2012 - 12:20 | 2998916 optimator
optimator's picture

"I see, so I can make more money with a flop than I can with a hit!"

Tue, 11/20/2012 - 12:25 | 2998939 Dr. Engali
Dr. Engali's picture

 It's surreal that a corrupt accounting firm is auditing the both fed and a maker of printers.

Tue, 11/20/2012 - 12:47 | 2999060 gmrpeabody
gmrpeabody's picture

You just can't make this shit up..., too funny!

Tue, 11/20/2012 - 14:49 | 2999442 machineh
machineh's picture

They probably audit the CFR and Opus Dei, too.

Tue, 11/20/2012 - 12:23 | 2998940 falak pema
falak pema's picture

After  Arthur Anderson, Deloitte the next castrated eunuch.

If you include all the regulatory industry : accountants, lawyers, notationals and law enforcers you have the target of all the lobbysits and insider traders of WS. Manipulating them is like stealing the official consort of a Prince of WS like HP. Down goes the prince when his mistress is exposed as money grabber and fake woman of standing. 

At every court in the ages you had the powerful; you had their "minions" or mistresses, who influenced their decisions, and you had the buzzards and vultures who lived off the left overs. 

Whats new at WS, its only more corrupt and more opaque in insider and BOT trading,  in the pristine town of transparent market screens working 7/24...

Can the Gods be such fakes to allow the devil to be God in their places? Or is it a preordained scheme to fool the peope to head for hell?

Dante, where r u?  If he had to write his inferno today, WS would be the place. 

Tue, 11/20/2012 - 13:30 | 2999198 Clashfan
Clashfan's picture

You ask, "Can the Gods be such fakes to allow the devil to be God in their places? Or is it a preordained scheme to fool the peope to head for hell?"

I answer that a Luciferian system is in charge.

Tue, 11/20/2012 - 12:28 | 2998966 fuu
fuu's picture

I was wrong a few weeks ago when I said peak farce was near, I see now we have a long way to go still.

Tue, 11/20/2012 - 12:39 | 2999001 Rainman
Rainman's picture

The Big 4 Bagmen have all gone Sgt Shultz...they know nooothing ! ....the truth is not listed as one of their duties. E&Y and Lehman's Repo 105 come to mind. Continue to not bite the hand that feeds you.

Tue, 11/20/2012 - 12:39 | 2999012 Gloeschi
Gloeschi's picture

What are "Government Auditing Standards"? Can I have them, too?

Tue, 11/20/2012 - 12:43 | 2999036 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Tue, 11/20/2012 - 12:46 | 2999057 Quinvarius
Quinvarius's picture

I declare I have 10 billion dollars and I would like to open a line of credit against it!  All I need is for these guys is say it is so for a 10% cut.

Tue, 11/20/2012 - 12:50 | 2999069 Jr Deputy Accountant
Jr Deputy Accountant's picture

You're misunderstanding the purpose of an audit.

Not to mention that the Federal Reserve writes its own accounting rules loosely based on GAAP. No other client has that luxury. Audits do not exist to detect fraud, they exist to provide reasonable assurance that the financial information presented can be relied on by investors. Not absolute assurance (that would put EVERY auditing firm out of business). Who invests in the Fed?

Tue, 11/20/2012 - 13:12 | 2999136 LongSoupLine
LongSoupLine's picture

so a $5-6 billion mistake (50% error) is reasonable assurance?


Who invests in the Fed?...why, the middle class of course.  Albeit, not by choice nor chance of profit.

Tue, 11/20/2012 - 14:58 | 2999474 machineh
machineh's picture

Who invests in the Fed?

The folks with $1.483 trillion of reserves at the Fed might like to cash or transfer those balances some day.

As might the foreign central banks with $3.193 trillion in the Fed's off balance sheet custody account.

These sums exceed the GDP of most countries. 

Tue, 11/20/2012 - 14:25 | 2999359 Papasmurf
Papasmurf's picture

CNBS: "I'm a buyer of HP at this price"

Tue, 11/20/2012 - 14:40 | 2999413 kevinearick
kevinearick's picture

there's a running joke among MBAs that goes: what's the difference between an accountant and a lawyer...

my response was one is a riser and the other is rung, on an escalator to a cliff.

Tue, 11/20/2012 - 15:12 | 2999510 robnume
robnume's picture

This is fucking great! I hope the chickens come home to roost! My mother worked for Touche, Ross, Bailey and Smart for many years. She was at the executive secretarial level and knows MANY secrets about them, which she imparted to me over the years. It was from my mother that I first learned - at age 8 - what a "holding company(ies) was. Jump Fuckers, Jump!!

Tue, 11/20/2012 - 16:54 | 2999877 No Euros please...
No Euros please we're British's picture

Nah, Delloite are on the level. They audited the German gold held by the Fed didnt' they?

Tue, 11/20/2012 - 16:57 | 2999884 orangegeek
orangegeek's picture

Not Deloitte and Touche, but Toilet and Douche.


Could you imagine "check the checker" legislation?  Who wins?  Toilet and Douche.


Who pays for it?   Every audited company out there.  Sarbox was bad enough.


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