Accounting, Love, and Audit: How Nice But Sorry, They Won’t Bring Food on the Table

Let’s get mushy~~

One time, I was scrolling through my FB news feed and saw this picture with a hashtag:  #auditorLOVEaccountant

Since I’m this curiosity monger, and this topic piqued my interest way too much, I searched the internet for related cases. And so I stumbled upon this Romeo and Juliet love story of Pamela Hartford and Robert Brehl.

Actually, I think a “Romeo and Juliet love story” is bit….

Anyway, it ended up tragically nonetheless.

So Hartford is a partner of Ernst & Young and served as the engagement partner and later as the coordinating partner on the EY engagement team that provided audit and review services to the Issuer, Ventas Capital Corp. whilst Brehl served as the Chief Accounting Officer of the Issuer. It was said that from March 2012 to June 2014, both parties were engaged in a romantic relationship therefore causing the auditor’s independence to be impaired.

The two continued their relationship in secrecy although a lot of employees within the Issuer’s accounting observed the interactions between Hartford and Brehl. Eventually, one of the Vice Presidents of the Issuer raised his concern regarding the issue until internal investigation on the side of the Issuer discovered the romantic relationship between the two. EY was then informed about this and so the firm immediately removed Hartford from the Engagement Team and conducted its own internal investigation. (I think this is taking me so long).

And so to cut the story short, the inappropriate relationship between the two was then exposed, later on sanctioned. Ernst & Young, Hartford, Kamienski, and Brehl all violated the rules concerning the issue on auditor’s independence.

And so the harbinger of bad luck brought upon them this sanction: for Hartford, the auditor, she was not allowed to practice accounting for three years while Brehl, the accountant, was only suspended for a year.

Anyway, I’d like to quote SEC for this: Their relationship was marked by a high level of personal intimacy, affection and friendship, near daily communications about personal and romantic matters (as well as work-related matters), and the occasional exchange of gifts of minimal value on holidays such as Valentine’s Day and birthdays.

How romantic~

Okay, so much for that.

In my opinion, if I am in the position of the auditor, and if I really like the guy, I’d raise my concern to my superiors and have myself removed from the engagement. Perhaps dating him after that wouldn’t result in this disaster. If I am in the position of the accountant on the otherhand, and if I really like the girl, I’d rather lose my job. (Well, I guess I’m a fan of this thing called “sacrifice everything for love”).

Ugh, I hate being cheesy.

Enough of my side. I haven’t found myself in such situation yet, and hopefully, never. But just in case, at least I have an idea of what will happen.

So, what about you? Have you ever been in this kind of awkward situation? Lemme know so I can shatter your dreams. (No, I don’t mean it)

Perhaps you might want to leave your comments. And if you want a legit source, here’s the link:  https://www.sec.gov/litigation/admin/2016/34-78873.pdf

ぢゃ、また明日〜〜!

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