Lotto odds

[crystalline]

Slightly off topic: this discussion of Ernst and Young made me curious about Arthur Andersen and their fraud.
It's interesting reading. To wutang's point, it seems that an aggressive cross-selling culture incentivized one or two accounting partners at AA to sign off on some sketchy stuff. The entire firm didn't fully assess the risk. (I don't know how accounting firms work today, seems likely they have centralized risk management and their managers place more emphasis on risk than on maximizing profits via selling.)
But to ghm's point, AA made about $50M a year from Enron. (Which brought down a company with $9B in revenue)

 

[wutang112878]

 
Why would it not effect their revenue?  First, they'd get sued for consumer fraud, and it would certainly be a class action.  They'd certainly lose millions, at least in attorney fees.  Also, they'd certainly take a reputational hit and they'd lose the NBA account and possibly any other pro sports franchises, whatever that is worth. 
 
They aren't going to do it.  Your point that E&Y has no risk is wrong, and frankly, the converse is a better question - what does E&Y get out of participating in the fraud?  I mean really, if they don't get fees for doing it, what is the point?
 

 
I'm not suggesting that EY is a participant, more that they couldnt care less about their audit of the NBA lottery and the guy who is auditing the process is probably playing Cwazy Cupcakes on his phone while its happening.  As for it affecting their revenue, I'd point to my Lehman Bros example again, I concede they had more incentive to take risk there but they survived and they admitted they completely screwed up in the realm of their core business and they've survived.  I just really dont think EYs accounting clients really care what happens with their NBA audit, I dont understand why they would. 
 
Also no class action lawsuit came out of the Donaghy situation, and there was a guy who came out and basically said refs influenced games and Stern was a smug a-hole about the whole thing.  If that cant draw a lawsuit, outside of the NBA being exposed as being as scripted as the WWE, I just dont know what would.

 

[lexrageorge]

 
I'm not suggesting that EY is a participant, more that they couldnt care less about their audit of the NBA lottery and the guy who is auditing the process is probably playing Cwazy Cupcakes on his phone while its happening.  As for it affecting their revenue, I'd point to my Lehman Bros example again, I concede they had more incentive to take risk there but they survived and they admitted they completely screwed up in the realm of their core business and they've survived.  I just really dont think EYs accounting clients really care what happens with their NBA audit, I dont understand why they would. 
 
Also no class action lawsuit came out of the Donaghy situation, and there was a guy who came out and basically said refs influenced games and Stern was a smug a-hole about the whole thing.  If that cant draw a lawsuit, outside of the NBA being exposed as being as scripted as the WWE, I just dont know what would.

If there was some fraud in the NBA draft that was not caught by Ernst & Young, it would be tremendously embarrassing for the accounting firm, but survivable.  If E&Y was found complicit in the fraud, their leading clients would desert them faster than the rats on a sinking ship.  Thinking otherwise shows little understanding how the auditing industry actually works.  
 
There is really no evidence of any fraud in the NBA draft lottery, even in the Ewing sweepstakes.  The Pacers or Warriors earning the top pick would not have been much of a problem for the NBA either.  A team with the 3rd worst record in the NBA winning the lottery is hardly unprecedented.  It's time for the tin-foil hat crowd to either cite compelling evidence or stop recycling the same old tired story line about frozen envelopes.  
 
Donaghy is a convicted felon who has yet to provide any evidence of refs fixing games.  Any lawsuit over that situation would likely be dismissed as frivolous, so it's not surprising one hasn't been brought.  

 

[Brickowski]

If there was some fraud in the NBA draft that was not caught by Ernst & Young, it would be tremendously embarrassing for the accounting firm, but survivable.  If E&Y was found complicit in the fraud, their leading clients would desert them faster than the rats on a sinking ship.  Thinking otherwise shows little understanding how the auditing industry actually works.  
 
 

You mean, like Arthur Anderson LOL?

 

[PedroKsBambino]

You mean, like Arthur Anderson LOL?

 
The billings are radically different, though...the NBA is very likely a prestige account, not a financially spectacular one.