PwC – Why Are You Hanging On To Dell?

I know it’s hard to sever a relationship of long standing, one that has been very lucrative. But the time has long passed. You’re starting to act like a neurotic girl, one who keeps talking about the “boyfriend” who really, really does still like her and feels something for her, but never calls anymore but always answers her text messages and sometimes comes over after he’s out with his buddies and is drunk… But I digress.

Once you’ve become part of the problem, and not part of the solution, it’s time to get the hell out of dodge, or Austin as the case may be. I understand the reluctance. I like Austin. I’ve spent many a fun night on 5th Street looking at art. Once, while I was still with KPMG Consulting, after a promotion to manager, I went to Barton Creek Resort for a new managers’ training. There was a really cute guy… But I digress again.

What is it about Fridays that makes focusing difficult?

Anyway, Jack Ciesielski over at the AAO Weblog does a great job getting into the details of the results of KPMG’s investigation. I like the line he uses to sum it up, “The investigation raised questions relating to numerous accounting issues, most of which involved adjustments to various reserve and accrued liability accounts, and identified evidence that certain adjustments appear to have been motivated by the objective of attaining financial targets.”

Sounds like WorldCom all over again. He makes the very important point too that this all happened while Sarbanes Oxley was in effect. Does that mean SOx is not effective? Not by a long shot. The fact that this is being revealed, that a formal investigation took place, that justice, of a sort, will be done, instead of everything going on business as usual in perpetuity shows that SOx has had its intended effect – to bring this kind of stuff out of the woodwork. What it also tells us is that boys will be boys. (Isn’t it true that almost all the perps are boys? I dare you to name me a high profile woman that has been behind one of these scams or the accounting team that closed their eyes to it. On the contrary, the heroines are women, women like Cynthia Cooper.)

5 replies
  1. Brian T.
    Brian T. says:

    Sounds like you and Tracey Coenen should talk…. From her book, Essentials of Corporate Fraud

    Men and women commit a fairly equal number of frauds at work. The most recent ACFE survey indicated that 61% of fraud schemes were perpetrated by men, while 39% were committed by women.19 The 2004 ACFE survey put the differential at 53% committed by men and 47% committed by women,20 while the 2002 survey cited that internal fraud were committed 54% by men and 47% by women.21 These differences are not terribly significant. Overall, the consensus is that men and women participate in a fairly equal number of fraud schemes.

    I think the gender difference is because 40 years ago accounting was a boy’s game only. My mum was one of the few female accounting graduates from her university in 1963. My CPA review courses now are 3/4 female, 1/4 male. I’ll submit to you that there aren’t many females in accounting fraud historically, but their turn is coming. It’s only been in the last 20 years that it’s become normal to have female CFO’s (name me some female CFO’s in 1990). The perps need time to get the job, get comfortable, get threatened, and make some bad decisions. By my reckoning, someone will be making the same arguments about male accountants being “more honest” in 25 years b/c so many of the Big 4 employees who will be public company CFO’s are female.

  2. Francine
    Francine says:

    @Brian T. You have a point. Since I wrote that post we’ve learned about Sue Sachdeva of Koss. She’s a pistol. And I talk to Tracy frequently. I’ve learned a lot from her.

    My point was that the majority of big accounting frauds, not embezzlement, are perpetrated by c-level executives circumventing controls. That’s been documented well. We are not seeing the number of women in Fortune 500 CEO and CFO spots increase as dramatically.

  3. Brian T
    Brian T says:

    @Francine, the fairer sex will have its turn – it will just be a couple of decades, IMHO. Fraud knows no race, gender, or creed.

Trackbacks & Pingbacks

  1. […] (No one should be surprised by the recent SEC sanctionas against Dell and its founder and executives.  This firm has been a problem for PwC for a while. “The […]

Comments are closed.