（2009）Financial reporting in a time of crisis.pdfVIP

February 5, 2009 Financial reporting in a time of crisis James S. Turley Chairman and CEO Ernst Young The Commonwealth Club San Francisco, California Good evening and thank you to the Commonwealth Club for inviting me to speak here today. I’m well aware of the club’s rich history, and I’m proud to have this opportunity to be with you tonight. I’ve just returned from the annual meeting of the World Economic Forum, which is better known simply as “Davos.” As you may know, this multi-day event brings together leaders in business and government, for discussions on a range of important topics. There were a number of useful discussions — some of them enlightening, one or two uplifting, many of them sobering. As you probably know, Ernst Young has operations in about 140 countries, and I seem to spend a great deal of my time across all of them. In conversations around the world, and certainly in Davos, I’ve heard a lot of blame directed at the United States, as the place that gave birth to the financial crisis that is impacting markets globally. The critics make a number of points. They talk about erosion in US fiscal discipline…reckless lending by mortgage lenders…and excessive leverage at financial institutions. They also point to the role of the credit-dependent American consumer…it’s not just the banks that need deleveraging, it’s the American consumer. The view is that the United States has created an illness in the financial system that has now infected everyone else. And you know what? I think a lot of these criticisms ring true. Yet, at the same time, in the middle of this financial crisis, I also heard in Davos a sense of determination and hope. Many see that there are important opportunities right now, and are looking for leadership. Many believe that the combination of the financial crisis, an enhanced appreciation for global interconnectivity, an