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- Shell Fires EY After a Rookie Audit Screw-Up
Shell Fires EY After a Rookie Audit Screw-Up
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I share the 4-5 most important accounting that actually matter. I scroll so you don’t have to.
So grab your coffee, take a quick break, and lets catch up.
In this issue:
Shell paid EY $66M then fired them for breaking the rules
A $77M accounting error just wiped 24% off Hub Group's stock
Alphabet is spending more on AI this year than most countries' GDP
- Ledger Lowdown Team
WTF of the Day🤯
Shell Fired EY Over a Rookie Mistake
Shell chose PwC as its new auditor, replacing EY starting in 2027.
The reason? EY breached audit partner rotation rules, the ones that require firms to swap out the lead partner every five to seven years. It's basic compliance. First-year-auditor stuff.
Britain's Financial Reporting Council opened an investigation into EY's 2024 audit of Shell. Shell had to amend its 2023 and 2024 annual reports after EY failed to comply with SEC partner rotation rules. The financial statements themselves didn't change, but the optics are brutal.
Here's the thing. EY didn't lose one of the world's biggest audit clients because of bad work. They lost it because of sloppy governance. Because someone didn't rotate a partner on time.
If you're at a firm of any size, this is your reminder that compliance isn't optional. The boring stuff is what keeps the lights on.
Hat tip to reader Dan Ramey for flagging this.
What’s poppin in accounting🍿
Hub Group Lost 18% of Its Value Because Someone Couldn't Count to $77 Million
Hub Group, the logistics and intermodal company, delayed its Q4 2025 earnings release after discovering a $77 million purchased transportation cost understatement. They're restating all three quarters of 2025.
The stock dropped about 18% in a single day. Law firms are already circling with class action investigations.
The Cash balances and operating cash flow don't actually change. The business is still running. But none of that matters when the market can't trust your numbers. One accounting error and you torch a quarter of your market cap overnight.
The lesson for every accountant reading this, Internal controls aren't bureaucracy. They're insurance. Hub Group is about to spend years and millions rebuilding trust that one understatement destroyed.
Weekly Trend Chart 📊
Google Is Lighting $180B on Fire (On Purpose)
Google says it will spend up to $185 billion this year. That’s way more than last year. And way more than anyone expected. Almost all of it is for AI.
For context, with that money Alphabet could buy Uber outright and still have change left over. Or grab about 80% of every NFL team. Or buy both Starbucks and Chipotle and still have $20 billion for snacks.
This is a big change. Google used to make tons of money without spending much. Now it’s building massive data centers and buying expensive computers just to keep up in AI.
This is a huge bet. If AI pays off, Google stays on top. If not, they just burned a scary amount of cash. If you invest in Google or use AI tools, expect things to get more expensive before they get better.
Meme of the Day😂
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