Well, it is a mistake to commit fraud.


Except that's not what happened here. E&Y was going to give a going concern qualification. How bad do things need to be before that happens in the world of "signing stuff" and "keeping the customer happy"?

what they are saying is, that they would have given that classification during the acquisition in 2016, if they had known back then, what they discovered in 2017.
these guys know how to cover their asses.

the company told them the spaceX loans would be refinanced.
can they be expected to talk to spaceX investors about the refinancing of their loans to scty? i guess that would be up to a court, my guess is no. so plausible deniability obtained.

good fortune for everyone involved i guess. /s

One of my major beliefs is that audits can never be independent as long as the client is the company being audited


From a practical standpoint the company bullies the audit firms far more than the other way around

Yeah, I wonder what the corporate landscape would look like with public companies paying audit fees into a country-wide audit pool with 10% kept aside as bonuses for catching proven fraud.

The qualification basicly meant E&Y said that the company would most likely go bankrupt without some sort of miracle happening.

Like others have pointed out here, audit firms:
1/ Corporate audits are mostly a joke for huge, mature companies.

2/ Audit firms are usually the biggest bulls because they have significant financial interest in giving a good audit, especially for the large, mature groups who have 100s of subsidiaries that all bring in money.


I do think audits serve a function in mid-sized & young companies. I've seen it happen countless times that a small company gets audited for the first time and they have to take a huge loss because the accounting was ****, or they had to book huge expenses because internal procedures were ****.

But like others have said obviously the whole sector is organized in a way that doesn't really make sense, and could easily be improved.

This is such lay-up troll fodder I'm not even going to take it.

You realize this is a plaintiff's motion for summary judgment right? Do you understand how that works? It's going to be ultra lop-sided for obvious reasons.

yeah i guess they just made that up and it's definitely not like the guys from EY said that in a testimony or something.

everything is fine, stock will be at $4000 soon, maybe tomorrow.

You realize these are factual statements based on hard evidence from discovery? Do you have any idea how a court works?

Fact: Solarcity was on the border of insolvency and was tracking far below guidance which was not publicly disclosed. The only reason it wasn't insolvent was Musk stealing SpaceX money to prop it up, and investors were agitating for those hundreds of millions back given the highly improper use.
Fact: This was not disclosed to shareholders
Fact: Musk was supposed to be recused given the self-dealing - and claimed he was publicly - but was extensively involved in pressuring the board to do it
Fact: The board soundly rejected the acquisition and the accounting team told him it was a disaster and he pressed and pressed until he got his way.

This is serious criminal fraud. I do not know what will come of it but this stuff nails Musk to the wall and prominent people have gone to jail for far less. Why do think Musk started mega-panic-tweeting about solar and trying to ramp up the business when discovery proceeded in the trial, after shutting it down progressively?

Oh, I know how audits work. I was a CFO for NGOs for many years. Something like this happened almost every year:


First year associate auditor - The way you did this is not right.
Audit manager - I've looked into it and it appears you didn't treat that correctly.
Audit partner - Sure, why not.


Ironically, all the official hedging and butt covering got worse after Enron.

Lol. Just, Lol!

It drives like an 85 year old grandma who is off her meds

I always thought the twitter supporting Elon conspiracy theories are unlikely, now I’m not sure

https://twitter.com/aarongreenspan/s...716463617?s=21

Aaron Greenspan runs @plainsite

I don’t really agree with any of this, I’ll respond in full later

Lol, no


I can’t speak for NGO audits but I would agree they probably get less scrutiny

My turn to say "lol, no". I'm not talking about some local charity to beautify the park. Organizations with +$100million in revenue get plenty of scrutiny from watchdogs and governments. Audit firms treat them accordingly.

Big NGOs, if anything, are audited more closely than corporations because a lot of those NGOs are also getting government money that has strings attached. Even the NGOs not getting government money are always toeing the line of being a non-profit. Some of the biggest NGOs have for-profit entities that are legally siloed from their non-profit arms (AARP is a poster child for this) but work very closely with their non-profits. This predictably creates a lot of auditing issues.

This is the case when it comes to income anyway. Where they spend money and how they hold their assets are much less audited by accounting firms.

Just to clarify my previous post, my opinion is based on:

1/ Am credit analyst for a living, so obv read a ton of auditor reports. The auditor reports usually correctly assess the major risks/elements, but mitigation/conclusion on the risks is very optimistic pretty much all of the time. I understand that it's not necessarily the auditor's job to be highly critical, either, especially since a critical auditor report is a big deal.
But the end result for 99,9% of auditor reports for large corporates is basicly that the auditor report says "we did all the checks checks and sparred with management, and the results are satisfactory", and I think there is a lot of value left on the table.

Obviously, it's hard to judge how much shittier the world would be if the audit process was not there in the modern world, so I might be too critical .

2/ Have had to interact closely with external & internal audits on the job (though I'm not management, so not involved in the whole process). I work as a credit analyst in a business active in financing, so it's an important part of the audit. From my experience, the external audit is a joke compared to internal audits. The internal audits are always extremely well done, and identify most of the issues even if they're not easy to identify. The external audit is a "box ticking"-process.



Is there any research done on how good external audit firms on predicting fraud/inconsistencies/financial issues? Would be interested to see it, and wouldn't mind if it changes my mind.

Fwiw in my country audit rules are very strict for NGOs & non-profits, which is a good thing for the reasons mentioned in your post.

bbfg,


What do you think the role of an external auditor is?

Police officer forced to give up chase as Tesla electric patrol car runs low on battery

https://news.sky.com/story/amp/polic...q_hvkykii9yNZ4

Consecutive posts, you have lost my willingness to engage

Back engaged, this is a good question because The right answer and the real answer are probably diffferent

Can't believe how well they are selling in Netherlands.

Those posts were not contradictory. But let's get back to -



A) Musk is a visionary leading us to a utopian future.
or
B) Musk is a con man.