The New York Times brutalized the accounting industry today by suggesting that auditors should have caught bad numbers on the books of financial companies much earlier. The paper reports that "attention is turning toward yet another steward of financial reporting ensnared in the subprime debacle: accounting firms."
The viewpoint may not be entirely unfair and its goes to the heart of a question which has been raised about accounting firms on countless occasions. Why do the stewards of letters approving the P&Ls and balance sheet of firms get their analysis wrong so often?
The next question is whether the subprime crisis will cause shareholders suits against the large accounting operations, another part of the cycle of blame which hits when public companies begin to fail.
Douglas A. McIntyre