Monday Morning Accounting News Brief: Chicago Hires EY to Find Money in the Couch Cushions; PwC Does a Deep Dive on Justin Bieber | 5.19.25

A gray kitten drinks from a mug while sitting at a table next to a laptop.

Hey you. I come bearing news.

There’s a trail underway across the pond to determine if EY was negligent in its audit work for collapsed hospital corporation NMC Health or if, as EY says, the firm was “itself a principal target and victim of the fraud.” Reuters reports:

EY failed to spot a major fraud by main shareholders of UAE hospital operator NMC Health in what lawyers for the firm’s administrators described as disgraceful auditing, at the start of a roughly $3 billion London trial on Monday.

The administrators of NMC – a FTSE 100 company when it collapsed in 2020 after disclosing more than $4 billion in hidden debt – are suing over audits from 2012 to 2018, when EY gave an unqualified opinion that NMC’s accounts were accurate.

The company’s administrators Alvarez & Marsal say EY, one of the world’s “Big Four” auditors and formerly known as Ernst & Young, was negligent in failing to get proper access to NMC’s books, missing billions in unreported borrowing.

EY, however, denies the negligence allegation and argues that it was NMC’s own senior personnel who perpetrated the fraud and manipulated its accounts, hiding the fraud from EY.

Earlier: EY Reminds Us That Audits Provide ‘Reasonable Assurance,’ Not a Guarantee That Billions of Dollars Aren’t Hidden From the Balance Sheet


Kyle Crockett, a Harvard Business School graduate who dipped out of KPMG at Senior Manager in 2006 and has been in the car space since, is heading to Ford as Chief Accounting Officer. There’s a press release:

Crockett brings a wealth of experience in accounting, SEC and financial reporting, internal controls, process and system transformation, and tax to his new position. Most recently, he served as Vice President, Controller and CAO at Carrier Global Corporation. In that position, he established the global controllership team, implemented a culture of quality, accountability and collaboration, and helped streamline Carrier’s business portfolio and simplify its technology footprint.

Prior to joining Carrier, Crockett worked across industries and geographies, including spending more than a decade at General Motors. There, he launched process transformation initiatives to drive global standardization, improve quality and efficiency and enhance insight to drive better decision making.

Detroit Free Press reported last week that Ford is cutting 350 software jobs “in its effort to improve efficiency.”


Corporate Crime Reporter covered a letter penned by former SEC officials, PCAOB advisory committee members, and former auditors to the Congress warning that eliminating the PCAOB would be very bad for capital markets. As part of their report, they spoke to Lynn Turner, former Chief Accountant for the Securities and Exchange Commission.

“The House Financial Services Committee approved it last week,” Turner told Corporate Crime Reporter in an interview last week. “I heard that there is an expectation that this and other legislation will be combined into the House Budget reconciliation bill and adopted at the end of May or the first week of June.”

“The Democrats in the Senate are likely to go to the Parliamentarian and seek a ruling that some of this legislation that gets put into the so-called Big Beautiful Bill is not relevant to the budget and therefore cannot be included in the Big Beautiful Bill.” 

“The question then becomes – does the parliamentarian want to keep her job or not? If you are in one of these senior roles in DC today, the question is – are you going to give them the answer they want, or are you going to give them what you think is the right answer? If you give them an answer and they don’t like it, there is a good chance you are going to be unemployed within 24 hours.”

Will the bill go through?

“If I were betting on this, I would bet that it will go through. I hope it won’t.”


The accounting department at Queens College in New York is getting an unusual amount of press this week related to the alleged ousting of some older Jewish adjuncts:

Queens College purged its accounting department of Jewish adjunct professors after “antisemitic hate speech and violence” erupted on campus following the Hamas terror attack on Israel, according to a lawsuit.

Adjunct accounting professor Helen Schwalb says the City University of New York school declined to reappoint her in May 2023 — along with five Jewish colleagues — as part of an effort to “clean house of its Jewish staff,” she claimed in court papers.

The school “kept younger, non-Jewish educators with lower performance ratings,” Schwalb, 66, contended.“The only remaining Jews in the [accounting] department are those with tenure who are in their 70s and 80s and will likely retire soon,” she said in the Brooklyn Federal Court lawsuit, which seeks unspecified damages.

Here’s an interesting bit:

The school claimed there was a shortage of enrollment and budget issues, but Schwalb said in court papers the two classes she was slated to teach were fully enrolled and given to other, less qualified educators.


Chicago Tribune reported over the weekend that a tax preparer in the Chicago burbs is accused of orchestrating $10 million in COVID relief fraud:

According to the charges, from May 2020 to December 2022, 53-year old Hiam Hmaidan of Oak Lawn and others conspired to use personal information obtained from other individuals to fraudulently apply for unemployment insurance benefits from the Illinois Department of Employment Security, which was was providing enhanced benefits to anyone out of work because of the pandemic.

The applications submitted by Hmaidan, which were done online, used false employment information, false information regarding whether the claimant was unemployed as a result of the COVID-19 pandemic, and false contact information for the claimant, according to the charges.

Hmaidan’s attorney said she “looks forward to her day in court.”

The Trib report includes this frightening bit about just how much the Illinois Department of Employment Security paid out that it shouldn’t have:

The report stated IDES paid out over $5.2 billion in overpaid unemployment benefits during the first 18 months of the pandemic, with a large portion attributed to fraud. This overpayment included $6 million paid to 481 deceased individuals and $40.5 million in checks to incarcerated individuals, according to the report.


Speaking of Chicago…the city itself has hired EY to help it find $1 billion in the couch cushions:

Chicago is hiring Ernst & Young LLP to help the city slash costs and close budget gaps that are forecast to top $1 billion in each of the next two years.

The consulting firm will support Mayor Brandon Johnson and a newly appointed working group co-led by Loop Capital’s Jim Reynolds to make recommendations to improve long-term financial stability.

Jill Jaworski, Chicago’s chief financial officer, says EY was engaged to find efficiencies and determine ways the government could operate better. “All those things are going to inform the proposal this administration ultimately makes for the budget.”


A PwC audit says Justin Bieber owes his former manager Scooter Braun’s company Hybe $8.8 million, reports TMZ in a very he-said-he-said story about the Biebs and his old BFF.

Hybe then did an internal audit and determined Scooter was actually underpaid commissions, and Justin owed him $1 million. We’re told Scooter said he waived that amount, but Justin’s people felt it was a corrupt audit because Hybe was just covering themselves.

Hybe then hired an independent auditor — Pricewaterhouse, or PWC — and after a 6-month audit which was completed in April, PWC determined Justin actually owed Scooter more like $8,806,000. TMZ has seen the PWC audit report and the $8.806M figure is on the document.


The Times talks admiringly about the boutique firms popping up to challenge the ‘flabby’ Big 4 and how they’re getting partners on board:

Sources said that the firm will start with “about 30” partners, some of whom were casualties of recent purges at the Big Four. It is promising payouts worth hundreds of thousands of pounds per year to potential recruits, according to sources. That could represent a steep pay cut for most Big Four partners, who typically earn about £800,000 a year, but Unity is understood to be tempting applicants with equity, which could potentially lead to a multimillion-pound payout in several years’ time, if all goes well.

The hiring spree has created a stir in the City. Some sources claim that legal threats are flying, warning firms not to poach staff. Unity Advisory and Warburg Pincus did not comment.


OK that’s it for now. As always, you are welcome and encouraged to reach out via email or text if you see an interesting story, have a tip, or just need to complain.