Mazars

Is it usual for an accounting firm to fire a client and disavow the last 10 years of accounting work? Asking for a friend.

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No idea.

However, I’m guessing that they think that received faulty info from the company, and were reluctant to audit or peer-review, cuz Client and aggressive lawyers.

The unconditional probability of that is very low. The conditional probability, given that the client lied to them in the information given, is considerably higher.

Maybe not so publicly

But if an accounting firm knows a criminal audit is coming
and now knows or believes they have been lied to and working off faulty information
I can see why they would want to distance themselves as much as possible

If I was the investigator I would question when they knew this. And can they separate themselves from the coming shitstorm

Is this about a Chinese firm

So how exactly does this work? They sign off, but disavow the work later. Can they do that* without new information? *ducking without possibility of professional censure. I would guess the accounting version of the ABCD will be busy.

They are a global accounting firm headquartered in France. But lately they seem to to be popping up on most lame stream news feeds with the exception of the most excellent fair and balanced network.

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points finger

I did not have fiduciary relations with that company.

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I would guess there is new info as Trump gives them the other set of books to match what the Govt has

Have a friend at Mazar, can’t ask him though

What a shitshow! Mazar is saying “We had no reason to distrust the information given to us and treated it appropriately” and the T***p Organization responded, “That means all the investigations are fake news!”

Completely ignoring the (generously: inaccurate, plausibly: criminally altered) incorrect data.

LOL, in all seriousness I would think the answer to this is whether they were engaged in the accounting activities of the Trump firm or the auditing activities. I think if you’re just doing accounting services you’re supposed to take your clients word on things and if you’re doing auditing work you’re supposed to push back on things.

Either way this doesn’t smell good. Hopefully this will at least push Trump into court and out of the 2024 election.

Why couldn’t they? Think of it in terms of actuarial work. You’re asked to do work, you’re provided info, you do some reasonable research to verify and don’t find anything to create doubt, you use that info to create an actuarial work product that conforms to applicable ASOPs.

Later on, you find out the info you were provided was crap and other info comes to light showing it’s crap, but (1) you weren’t provided it at the time you did your work, (2) your own research showed the info you were given seemed reasonable and accurate, and (3) you had no reason to suspect the info you were given was crap given (2). [You’re expected to do reasonable research, not put in heroic efforts.] I would expect you have a professional duty to notify the intended users of your actuarial work product that it should no longer be relied upon.

I would be shocked (disappointed - but somehow not surprised) if the ABCD suddenly decided hey, you should have done an exhaustive search to uncover anything that might have uncovered the inaccuracies in the data you were provided and that you used to create an actuarial work product that ultimately was faulty but you told others they could rely on it; here’s your punishment.

If you knew the inputs were crap and still went forward with it, that’s a different story. Until/unless that info comes to light, I would presume Mazars didn’t know that was the case.

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Yes, I agree with this. My question is did Mazars get some new information that caused them to think there is a problem with what they were given, or is this a CYA (Oh sh!t, they’re being investigated!).

Putting it in terms of actuarial work: If I were a consultant signing a blue statement, for instance, of a company under investigation, getting a call by the ABCD asking to show my work on how I complied with the appropriate ASOPs would not be unexpected.

And I forgot the accounting services/audit distinction while considering the story. Which were they?

The letter from Mazars, in the tweet seems to indicate that they did not do any due diligence as far back as 2014.

Does that include considering who is the head of the organization providing the info?

Great point. I could see the ABCD checking to make sure everything was on the up-and-up [could they initiate this themselves, or do they need a non-ABCD actuary to register the complaint?] but provided you’ve got all your documentation, I can’t see anything come of it.

I think our actuarial standards are higher, because fraudulent/incorrect reporting by an insurer or pension fund could cause financial protection of policy/pension holders to vanish. So, that’s why states require the actuarial services.

For Trump Corpse-oration? Just cheating the government out of paying taxes.

of course assuming that the documented work was sufficient to comply with the ASOPs.

I’m just trying to get a sense of where on the spectrum of professional liability Mazars USA is between (pay us and we’ll sign whatever) and (this is beyond what reasonable accountants could be expected to notice). It isn’t like there weren’t major accounting scandals in the early 2000’s to make folks careful.

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I have not seen anything wrt tax filings n this episode.

As a privately held company, Trump Inc is not held to standards like regulated entities and public companies. Their financial statements are way more relaxed in both form and content.

Having worked many years at a privately held LLP, which in turn owned a cluster of LLCs, the financial statements were primarily related to loans. Loans, and bonds, have covenants. If the covenants are breached it creates a technical default. The lenders get augmented powers. The financial statements we produced were done to satisfy those covenant reporting requirements. Tax filings were an entirely different work product.

So in the end, it’s not a government/tax thing. It’s a fraud issue, where lenders are mislead.

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Ok, so, just cheating lenders. Like that time his name was worth an extra $4 Billion so he could buy the Buffalo Bills?

Cohen said Trump exaggerated his personal wealth when it benefited him over the years and submitted portions of financial documents, or “statements of financial condition,” from the years 2011, 2012 and 2013 as evidence. Cohen testified that Trump misled banks and insurers about his cash holdings, outstanding debts, and the value of his real estate assets to obtain a loan to buy the Buffalo Bills.

The documents were submitted to Deutsche Bank in 2014 as part of a loan application for buying the Bills. According to Deadspin, Trump’s net worth jumped from $4.6 billion in 2012 to $8.7 billion in 2013.

Cohen said Trump kept two sets of books to inflate his assets by $4 billion that year, and credited the jump to his “brand value.”

“Mr. Trump is a cheat," Cohen testified Wednesday. "It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.”

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