The best fiction is written in Excel, not Word. We know we're writing the church newsletter to the choir here, but accountants are not all boring. In fact, they can be very creative when presented with the right incentives. And unfortunately, EY is again being accused of turning a blind eye.

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• 💌 After heavy losses in its flagship fund, ARK Invest extends an open letter to the Fed suggesting the latter is 'misinterpreting what is going on'.

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Whistleblower allegations against Leonteq and EY

In echoes of the Wirecard scandal, whistleblowers have accused EY of failing to establish basic facts during an investigation it conducted earlier this year for long-standing client, Leonteq, a Swiss fintech company specializing in structured financial products. Leonteq’s share price fell 19% on the news.

The internal audit investigation centred on financial products Leonteq designed for a French workers’ cooperative. Large commissions were paid to a company in the British Virgin Islands, rather than the French broker that moved the products on Leonteq’s behalf, raising money laundering concerns. EY’s report into the matter concluded that 'no indication exists that would justify the allegations of money laundering or tax evasion'. Whistleblowers were not satisfied.

This comes as EY is likely to split its audit and consulting arms into separate firms. One reason given for the split is the improvement of audit quality that is likely to come from a firm that can stand up to management – where it is not also providing more lucrative consulting services. The new audit firm would keep the EY name and the consulting arm would be renamed. Hopefully, they spend a little more time thinking about a name than last time.

The content we're consuming today

• Billion Dollar Whale by Tom Wright and Bradley Hope – Excellent read on the 1MDB scandal and somewhat topical, given the Malaysian PM has called early elections.

Off-balance sheet items

• The New Yorker: Invasion of the Sports Cheaters! ($) – We discussed some possible dishonesty in accounting but there is some really interesting cheating going on in sports right now.

The bottom line