It is beginning in earnest. As predicted by many, regulators and in particular the SEC, seem to be setting their sights on the Big Four. (Notice that I no longer include Andersen.) And unlike with the criminal proceedings against Andersen, it is not for shredding documents. It involves a claim directly involving the auditor relationship.

On May 20 of this year, the SEC instituted public administrative proceedings against Ernst & Young in an auditor independence case arising from its dealings from 1994 through 2000 with PeopleSoft, one of its audit clients. It is alleged that E&Y and PeopleSoft jointly developed and marketed EY/GEMS for PeopleSoft, which incorporated components of PeopleSoft's proprietary source code into software developed by E&Y.

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