Question: Part II Merry Go Round Additional charges made against E

Part II: Merry- Go- Round. Additional charges made against E& Y included the following (recall that MGR hired E& Y for turnaround consulting services):
• E& Y had a close relationship with Rouse Co., one of MGR’s primary land-lords (E& Y was soliciting business from Rouse and provided significant tax services).
• Swidler (the law firm that recommended E& Y to MGR) and E& Y had participated in at least 12 different business arrangements, some of which resulted in Swidler receiving signifi cant fees from E& Y.
• E& Y did not disclose either of these relationships to MGR.

a. Do you think that E& Y acted unethically, given that it had these relationships?
b. How could these relationships have affected E& Y’s advice to MGR? In other words, refer to the charges above and speculate as to whether any of the charges against E& Y may have stemmed from the relationships described above. To assist you in answering this question, consider the articles about MGR in footnote 10.

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