Treasury Appoints PwC and EY – The Wolves Are In The Henhouse

Yesterday’s appointment of Big 4 accounting firms PricewaterhouseCoopers and Ernst & Young to oversee the $700 billion Wall Street bailout program is a slap in the face to the American taxpayer. PricewaterhouseCoopers has been appointed auditor for the bailout program under which Treasury will buy billions of dollars worth of preferred stock in a move to help recapitalize struggling banks. Ernst & Young will provide general accounting support.

(Note 10/23/08:  Per a comment from a reader and, given the availability of the Blanket Purchase Order for PwC’s services, I went back and reviewed the nature of the services.  Although AP and other media reported that PwC would provide “audit services” this seems to be a misnomer for present services.  The BPO is entitled, “Internal Control Support Services.”  My reader indicated that there is nothing to “audit” yet, either as internal audit or an “external” audit that includes an opinion on financial statements.   The reader states, “PwC is setting up the internal control structure for the office that is disbursing these payments. (which they are very good at) There is nothing to audit at this point, so auditing an office that doesn’t exist would be pretty difficult.”

I  Twittered a couple of additional comments yesterday with my further thoughts on the contracting process.  When I see the detailed task orders and we see the ongoing development of services performed we can judge.  But my comment still stands:  PwC and EY should have nothing to do with TARP, whether setting up infrastructure, advising on accounting, or eventually performing either operational or financial statement audits.  They are not independent (and there is no mechanism set up to insure they perform independently,) PwC does not have adequate qualified staff in my opinion, and both have had performance issues with these issues in their audit clients.)

But the US Treasury has let wolves into the hen house. All the Big 4 audit firms are complicit in the malaise now sickening the global financial services sector. They are partly to blame for the gangrene that threatens capitalism worldwide. It is an insult to taxpayers that firms with numerous examples of poor performance – and failure to identify some of the largest corporate frauds in history – are now are being asked to audit the biggest financial transaction in history. 

The appointment of these so-called “independent auditors” to ensure the integrity of the Wall Street bailout demonstrates the bankruptcy of imagination of current US regulatory leadership. It also shows the enormous sway the Big 4 firms still hold on Capitol Hill – through lobbying, campaign contributions, and their presence on the boards and advisory committees of the very regulatory agencies that are supposed to keep them in check.

Many of you sent me this press release immediately and urged me to write. You could predict my point of view: The US Treasury is conducting business as usual with these purported “guardians of shareholder interests,” rewarding the very firms who could have blown the whistle in the first place, preventing or at least mitigating the financial crisis, and protecting shareholders and the American taxpayer.

Instead of investigating and challenging the valuation presented by mortgage-backed securities and the swapping and sale of non-correlated assets, the Big 4 firms helped design and market such highly leveraged offerings of debt, themselves building consulting practices on financial securitization throughout the 1990s and well into the current decade.

1) Both PwC and Ernst & Young have performed disastrously before, during, and after the crisis. PricewaterhouseCoopers is the auditor of AIG and has been sued by AIG’s shareholders.

2) PwC is auditor of Freddie Mac and now the behemoth banks JP Morgan Chase and Bank of America, as well as Goldman Sachs and Northern Rock. PwC hasn’t either adequate or qualified staff for their current responsibilities let alone more of the same. Neither has it proven it has the moral right to take on more such work.

3) Ernst & Young was the auditor of Lehman Brothers and IndyMac Bank, both bankrupt and now taken over. Ernst & Young now currently audits Societe Generale and UBS, poster children for loose internal controls.

4) Ernst & Young was also recently fined by the SEC for independence violations relating to paying hundreds of thousands of dollars to someone who sat on the Board of Directors of three of their audit clients, including on an audit committee responsible for retaining Ernst & Young.

5) Both these firms, operating as part of what is essentially a government-sponsored oligopoly, clearly do not understand or uphold their responsibility to protect shareholders – and not the executives of the firms that are their clients.

If only the Big 4 audit firms had told us that some of the banks were technically insolvent or potentially illiquid under certain scenarios. If only they had warned us or stood up to their clients sooner. Instead, they are benefiting from their professional ineptitude.

The Treasury’s press release does not state who will monitor PricewaterhouseCoopers and Ernst & Young in performing their duties. It would be inappropriate for either firm to audit or advise on transactions for clients they also currently audit or advise in another capacity or where those parties/transactions are in litigation. Or has the Treasury suspended these safeguards, too, in this age of financial system martial law?

It is time for independent voices to articulate these concerns. It is time for regulators, Congress, and the rest of the Federal government to assume their oversight responsibilities. And it is time for some reasonable level of independence to be mandated for Big 4 firms that at present only stand to profit from this crisis, at the expense of businesses and investors the world over.

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41 replies
  1. Luis in Chicago
    Luis in Chicago says:

    Great post! You don't pull any punches! Last night, Charlie Rose grilled U.S. Treasury Secretary Henry Paulson on why he didn't act before the financial crisis became a crisis, to which Paulson responded that Congress would not have acted until it was a crisis. Seems like Paulson failed to blow his whistle and was rewarded by keeping his job, for now. Now the firms that failed to blow the whistle for investors and taxpayers are similarly being rewarded by being asked to audit the "bailout." I nominate Francine to accompany Charlie Rose if/when he ever interviews PwC and E&Y to ask them how they can impartially audit the "bailout" despite all their conflicts of interest and, dare we say it, complicity!

  2. Francine McKenna
    Francine McKenna says:


    I have made my feelings known to Senator Chris Dodd. Federal Government should set up model like the independent prosecutor, using PCAOB and GAO as resources. There are plenty of professionals that would be interested in joining this service corps. In particular, any company that has been taken over by government such as AIG, Fannie or Freddie should cut out the Big 4. Too many conflicts. An independent prosecutor style model with a Lynn Turner or Don Nicolaisen type independent mind, should be watching independence, double dealing and self-interest by everyone involved.

  3. Anonymous
    Anonymous says:

    I’m not sure how many professionals would be willing to join your service corps to audit this bailout. What kind of infrastructure would there be? I would be worried if the government tried to create its own auditing corps and create another bureaucracy. Not that I think PwC isn’t absolved of everything that has happened, but how many other options are there? This is coming from someone who has seen first hand how PwC handles valuations against customer relations.

  4. Content
    Content says:

    To mark down assets that have a readily determinable fair value is in direct opposition to FAS 157 and if auditors had done so not only would shareholders have cried foul and filed yet another round of lawsuits targeted at deep pockets, the PCAOB would have considered everyone of those audits a failure.

    You can’t take an asset trading at $100 cry conservatism and mark it down to $25.

    Also, the comment a bout PwC’s staffing speaks of nothing but willful ignorance and spite. I’ve always enjoyed this blog, despite disagreeing with you on a daily basis but that comment can’t even be considered opinion as it has zero basis in reality.

  5. Francine McKenna
    Francine McKenna says:


    I make no specific claims about which assets should or should not have been written down. I’ll leave that to the technicians.

    As far as PwC’s experience and capacity to handle what they’ve been handed recently, the facts speak for themselves. They will be provided in a later post.

  6. Anonymous
    Anonymous says:

    Francine you are correct.

    And to ‘Content’ – PwC did put up a ‘fight’ with AIG and made them take that 4b hit one quarter…question is what took so long…

    “The purpose was not to sock the punch to balance sheets. In the first place, mark to market accounting shouldn’t hit balance sheets that hard if the balance sheets aren’t filled with illiquid assets and lots of leverage. This is something that seems to escape even the cleverer on the Street and I still don’t understand why. An asset that no one will buy or lend against is worth… nothing. You can play all sorts of games and talk about prices “not reflecting long-term value,” but that requires a very subjective take on “long-term value.” That’s just another way to say “mark-to-myth.” Or maybe, mark-to-hope. Blaming mark-to-market accounting for some kind of market “punch,” presupposes that it’s inaccurate to say that something that cannot be sold is worth nothing.

    Props to EP…

  7. Content
    Content says:

    Anonymous, that is of course ignoring the fact that mark-to-market was working. Looking at any Fair Value footnote will teach you that. The problem is that the market for many of these “problem” assets dried up incredibly quickly. And now to say something truly controversial, a $4 billion writedown on available for sale securities on a $1 trillion balance sheet wasn’t really all that much. AIG did not run into trouble because it had to recognize losses.l

  8. Reality Check
    Reality Check says:


    I think that shows the unfortunate reality that accounting, as it is is, becoming less relevant. The whole point of the audit report and GAAP is to have a comparative set of books that speak to the financial health of a company so that investors can make informed decisions. If accountants are looking at a subprime loan or other loans that may not be fully realizable, there needs to be some impairment or some way that the the investors can see that there is not real value there. There are many assets that aren’t based on any real value, heck the whole fractional banking system works on creating this ghost value (otherwise known as commercial bank money). Couple that with a shaky independence foundation and you have a problematic situation. I think Francine made some interesting points, you don’t let the people that were involved in the nation’s biggest economic crisis in recent times back into the mix

  9. Anonymous
    Anonymous says:

    Hey a billion here and a billion there and pretty soon we are talking about real money.

    CDS did AIG in…collateral calls doomed them.

  10. Ray
    Ray says:

    More details (from in case anyone hasn't read the other news reports:

    For its part, PwC will help Treasury "establish a sound internal control posture," the department said. Ernst & Young will provide "general accounting support and expert accounting advice."

    The initial orders are worth $191,469.27 and $492,006.95, respectively.

    Treasury did not provide further details on why it selected the two accounting firms. Their agreements last until Sept. 30, 2011.

  11. Independent Accountant
    Independent Accountant says:

    Your a woman after my own heart. You're as critical of PWC and E&Y as I am of the mythical Big 87654. I've posted on the "consultants" and "lawyers" who are looking for a piece of the $700 billion action who are hopelessly conflicted like any "NY Big Law", like say Cadwalader. It's coverup of the coverup.

  12. Anonymous
    Anonymous says:

    Hey, Deloitte and KPMG auditors. Time to polish your resumes and send them to PwC and EY. Looks like that is where the work is going now.

  13. Edith
    Edith says:

    Francine, interesting post! I imagine it must be difficult for gov't to balance overriding and immediate public policy issue like the need for immediate audit or advisory services relating to the bailout, which require a certain level of technical expertise and bandwidth that may be more readily available at the larger firms, (and if their bid comes in within reason), weighing that against any concerns about the role of those audit firms vis-a-vis their troubled clients. Some will probably argue that, just like in the Andersen/Enron scenario, it may not be completely clear the extent to which, at a given client, there was (a) an audit failure (although certain basic errors at Enron seemed apparent)(b) fraud perpetrated on the auditor by the company, (c) a business model failure, (d) some combination of the above.

    Also, it would be hard to shut out those with ties to the Big 4, even the "independent prosecutor style model with a Lynn Turner or Don Nicolaisen type independent mind" (which may not be such a bad idea) which you recommend in your subsequently posted comment would be impacted if former Big 4 (indeed, former PwC folks) were not permitted to be involved; both Nicolaisen and Turner hail originaly from PwC (or its predecessor firms, PW and C&L), as does FASB chairman Bob Herz. You do a great job of keeping these tough issues in the public eye.

  14. Anonymous
    Anonymous says:

    1. The PwC staff comments are clearly spiteful and not supported by any facts.
    2. You make no suggestions in the article on who would be best suited to take on this audit task. Another government agency?? Please…
    3. You demonstrate a surprising lack of understanding of FAS 157, and auditing in general. I fail to see how the auditors should have been expected to predict the MBS market drying up. By your flawed logic, any company with significant investments should receive a Going Concern opinion because there is a chance, however minute, that those investments could lose almost all their value. Alright, Ms. McKenna has spoken – Going Concern opinions for all. As for your previous assertions that Material Weaknesses should have been disclosed – clearly these companies were able to report the losses on these investments under then-existing GAAP. Where is the material weakness?

    If you could back up your posts with more facts and less mis-interpretation of GAAP, it’d be more credible.

  15. Francine McKenna
    Francine McKenna says:


    1) I will be making a followup post which will provide more detail to the contention that PwC does not have the bandwidth or sufficient experience to take on so much of the remaining troubled financial firms’ audits and the TARP work. PwC or anyone else is welcome then (or now) to dispute my contentions with other facts or data. If they are unwilling or unable to disclose this data then que sera’ sera’.

    2) I have made some hints on a solution I would like to see in these comments. More information on this may come in a followup post, an OpEd piece for a major daily, as counsel to Barack Obama’s campaign, via an appearance on CNBC or as testimony before Congress. Or maybe you have to wait for my book. I’m not the one who should be proposing more viable solutions. But I can point out the bankrupt and self-serving solutions that have been proposed so far. I’m a US taxpayer and I have a right to scrutinize and criticize what my elected and appointed officials are doing.
    3) I was never an external auditor and admit I am no expert on the technical aspects of that product or various FASBs. However, as a reasonable person and one with much more knowledge and experience regarding how auditors do their job than most, I think I can safely say it seems like quite a major screw-up occurred somewhere given none of the companies that have failed or been taken over on the last 45 days had anything other than unqualified audit opinions. It seems the audit itself is not serving any purpose for inventors other than to provide fees to the audit firms. What “assurance” has it provided to anyone with regard to these firms? That the financials fairly present at a single point in time in the past the mucked-up risk profile and business model of so many companies that were imminently non-viable? So much for that. And your simplistic defense, ” how the auditors should have been expected to predict the MBS market drying up, ” assumes that the Mortgage Backed Securities market somehow suddenly “dried up” since January -February when most of these annual reports came out, with no warning, with no indication leading up to it, with no trends seen in all the complex valuation models, with no reason for the auditors to question the rosy and optimistic valuations that were being placed on these and other securities that were such a huge proportion these organization’s balance sheets. Strains credulity.

  16. Anonymous
    Anonymous says:


    I am not pleased with your lack or research into what is actually happening here. Usually you do a very good job of stating the facts as facts before giving your opinion. This time, however, you jumped in way too early to bash the “wolves”. PwC will not be doing the auditing as reported by the AP. PwC is setting up the internal control structure for the office that is disbursing these payments. (which they are very good at) There is nothing to audit at this point, so auditing an office that doesnt exist would be pretty difficult.

  17. Francine McKenna
    Francine McKenna says:

    @8:32:00 Thanks for clarifying. I am assuming you are “in the know.” I am just a girl, with no access to anything other than what’s reported on the outside. You, and not PwC’s PR folks are correcting, clarifying and adding detail.

    I though it was odd to call it audit, and I did see the actual contracts. It would be impossible for anyone on the outside to now what’s planned, since there was no RFP, no description of services needs, no detail provided. Reasonable journalists seem to have called it the only name they know. That’s actually what I’m trying to do – add to the knowledge given my interest and aptitude for the subjects. Most journalists have no more understanding of what the firms do and how they define their services than the average Senator or his constituents.

  18. Luis in Chicago
    Luis in Chicago says:

    Well, to say that reading the exchanges between Francine and “Content” has been entertaining would certainly be an understatement. So, lets break it down – PwC will help Treasury "establish a sound internal control posture." I know what an internal control environment is and what internal controls are (COSO helped us with those), but I’m not quite sure what an internal control "posture” is – that’s a new one for me. I’m sure there must be a 2 by 2 or even 4 by 4 “framework” with lots of colors on a “deck” somewhere! Regardless, as “Content” has told us, it’s not an audit. Ernst & Young will provide "general accounting support and expert accounting advice." Ok, that’s clearly not an audit either. So, that begs the question: Who will eventually audit this new behemoth? Who will make sure that corrupt execs don’t get their golden parachutes (as the candidates have promised), that taxpayers get a fair shake for their investment and that public moneys don’t get moved from one bucket to another, once it’s been disbursed, to pay for junkets to spas and resorts? Will we leave it to the poor Chief Audit Executives at these failed or nearly failed financial firms who never spoke up (or weren’t listened to) earlier and are desperately hanging on to their jobs already? KPMG and D&T, get ready, an RFP may be on the way!

  19. Anonymous
    Anonymous says:


    So PwC employees don’t have the knowledge or experience to work on this stuff, but a hastily crafted government agency will? Who do you think will be joining this task force? Probably the bottom performers of the Big 4 who just got layed off and are looking for work.

  20. Independent Accountant
    Independent Accountant says:

    I am an external auditor having audited dozens, dozens of publicly-held registrants, in most industries except life insurance and brokerage: commercial banks, lessors, non-bank finance institutions, coal mines, manufacturers, farms, metal processors, mines, petroleum extraction, oil field services, retailers, property and casualty insurers, wholesalers, real estate developers, construction contractors, etc. I agree in part with Anonyomous of 7:50. Anonymous can do a “perfect by-the-book audit”. So? Most audits are worthless! That is one of the many dirty secrets of the auditing business. As long as the typical CPA can fill in his program steps, he’s happy. Most CPAs are terrified to address “substance vs. form” issues. If the Big 87654 earned their say $47 million audit fees at large financial institutions, they would do things like see that risks are carefully disclosed.
    I agree with you, something’s wrong. What? Having audited banks and non-bank financial institutions, I can tell you many of them are unauditable. You heard it first here. They have bookkeepers all over the place, mechanically grinding out financials. So? The risks inherent in an investment bank that is leveraged 40 to 1 are such that it could fail at any time! Think about it. Would any broker extend you a 97.5% margin loan? Yet the public does that with investment banks. Crazy! Look at the leverage of Freddie and Fannie. Crazy. So?
    The Big 87654 are hopelessly politically compromised. Suppose one decided to put a “going concern” paragraph in Freddie or Fannie’s report, what then? Barney Frank would call for Congressional hearings! Can you imagine some gutless wonder Big 87654 partner being questioned by Frank and saying, “That’s the way I see it. That’s the way my firm sees it. And we won’t back down from our opinion, NO MATTER HOW YOU THREATEN US! Sic your PCAOB attack dog on us and we will fight it to the Supreme Court”. Not gonna happen. Big 87654 partners are not Audie Murphys.
    Should any of our recent failed companies gottern “going concern” opinions, based on my reading of the publicly available information? YES! Lehman, Freddie and Fannie at a minimum. Possibly others.
    I don’t care if your anonyomous poster is the senior technical partner of a Big 87654 firm, I’ll match my skills against his anyday. Seriously.
    The bottom line: most audits lack substance! Suppose Big 87654 wanted to put a “going concern” paragraph in its report. Would it ever have gotten to Barney Frank. Very unlikely. Big Investment Bank would have had its CFO call Chris “the compromised” Cox. What would Cox do? Call the Big 87654 firm and say, “fix this”! No going concern statement. That’s how the world works. If you follow my numerous posts on the SEC, you’ll see something is wrong there. Look at the SEC’s position on short-sellers or mark-to-market accounting. The SEC is another scam. As a practical matter, the SEC protects the politically powerful.

  21. Independent Accountant
    Independent Accountant says:

    If you haven’t, read my 23 October post on Stephen Cutler. That’s the way the SEC really works in my experience. Imagine, I’d rather deal with the IRS any day. Why? I’ve never, never felt that I encountered an IRS agent with a “hidden agenda”. I’ve encountered stupid IRS agents, stubborn ones, etc.. Never have I seen one I thought was corrupt. Read about the Aguirre scandal. This is everyday reality at the SEC.

  22. Anonymous
    Anonymous says:

    Without giving away too much information, I worked with many of the individuals at PwC who would most likely be working in this new oversight role up until less than a year ago. I am familiar with their names and faces, their capacity, and their qualifications. These are some of the most knowledgeable individuals I’ve ever met – they eat, breath, and live this stuff. I’ve been in trainings and conferences with them – it’s scary how smart they are. (Disclaimer – I was never told I was “too smart” to work at a Big 4, so maybe my views are slanted a bit).

    This is one area in which PwC is a world leader. I actually share some of your other views on the big 4, but no one is more qualified to handle this task.

    You seem pretty smart, and even you admit you do not understand the technical ins and outs of the accounting guidance. What basis do you have for claiming that a govermental agency could do it better than the world’s thought leaders on the topic? It just makes no sense.

  23. Francine McKenna
    Francine McKenna says:


    My concerns are these:
    1)PwC and EY may not be independent of the transactions they will be working with.

    2)There is no independent monitoring process set up to make sure that neither of these firms advise or make decisions in conflict with their independence responsibilities related to existing audit clients.

    3)Both PwC and EY are responsible, in my opinion, for not providing adequate “assurance” to investors regarding many of the firms that have failed, been taken over, or nationalized. These questions will be litigated, but I am talking at the most basic “prima facie” level, given what’s happened.

    3)PwC, in particular, may have smart people, but I can’t see them. If I can’t see who the key people are working on this client, how can I know they are not same partners as “key experts” working on their existing audit clients, or other failed or nationalized clients? They have too much now given their level of resources with appropriate expertise, given their responsibilities to current clients. I have data . Is PwC willing to show theirs to prove otherwise?

  24. Francine knows
    Francine knows says:

    The people defending the Big 4 and attacking Francine on this post are overlooking several facts. First of all, Francine, you may not have been an external auditor, but, as a former external auditor myself, i can assure you that you grasp audit issues and weaknesses better than many external auditors. The problems afflicting the audit profession do not require a genius to identify them. Second, ‘performance’ in the Big 4 is a very relative concept. I was a victim myself. People misrepresent other people’s performance all the time. If you don’t believe me, go see some of the posts on the Deloitte blog, Amazingly, often my clients could see exactly what i saw in some of my colleagues, and only the audit firm was blind to it – these guys were inept – and are still working for the firm. ‘Performance’ in Big 4 audit firms is too often based on sycophancy and blind following of directions, instead of actually being critical and carrying out an effective audit. And my clients could see that!! Too many Big 4 employees are just interested in the cozy salary and (fairly) cozy job security to care about audit effectiveness and integrity. Its the biggest ethical scam i have seen in my life.

  25. Krupo
    Krupo says:

    With something of this scale, I’m not surprised the US Gov went with big firms to help set things up. There’s only so much they would have in-house, and from I’ve heard, they’re not too good at policing this sort of thing either.

    With regards to auditing the after-effect of these operations, are you really telling me the US doesn’t have an equivalent of Canada’s Auditor General? I could swear I remember hearing that one existed, no?

    Oh wait, the GAO, right? And they are … audited by… Canada’s Auditor General?!?!

    Cool and weird at the same time. I guess you simply WILL have to call in the Mounties to help the FBI with the fraud investigations too.

    As for some of the wildest slams that’ve been discussed at some length already, you have to separate “the capitalist system has major flaws” point of view from the “it’s all the Big 4’s fault” position. Mixing the two issues up does everyone a big disservice.

    How about reaching out to those who want to improve things rather than tarring everyone with a hyper-critical brush?

  26. Anonymous
    Anonymous says:

    Independent Accountant: As much as you may want to, I’m not interested in comparing resumes with you. But, your comment about “I don’t care if your anonyomous poster is the senior technical partner of a Big 87654 firm” is much closer to fact than you may think. Keep bragging about matching accounting wits if you like, but it makes your arguments no more credible. You possess an antiquated view of auditing; the loner accountant in a dark room crunching numbers, checking boxes in an audit program, with a solitary partner signing an audit opinion. If you existed in the audit world post-Sarbanes, you would understand the current environment, where there is infinitely more collaboration among partners and between partners and senior management of the Big 4 firms. There is no longer an audit “checklist” of procedures, and the substance of complex transactions are looked at over form; where the accounting guidance allows it.

    I’ve witnessed first-hand cases where Big 4 have stood firm in their positions with clients and regulators. I’m guessing your experiences have not availed you of similar opportunities, and that’s why you conclude they do not occur. But let me assure you they do; they occur “behind the scenes” if you will.

  27. Anonymous
    Anonymous says:

    wow it is incredible how out of touch you are. A sideline observer… but not even that close to the sideline.

    1) Who should get the job?
    2) Why should an audit firm be telling the market a company COULD go insolvent? That is a serious breach of duty to the shareholders, mainly because auditrs are not hired to judge these things. That is the rating agency and investment analyst.

    These are not issues to be bantered about lightly. They require significant discussion and consideration. You cry foul, but many more shareholders, with FAR more at stake than you with your axe to grind, would cry foul when their investments are wiped out due to the ensuing panic of a false accusation by an audit firm.

    Simply put, there is no one better or more suited to setup the internal control stucture or provide accounting advice. Should the big 4 firms be challenged to be better? Or course, just like any enterprise. But you are overboard on this one… all wet.

  28. Anonymous
    Anonymous says:

    @Thu Oct 30, 08:21:00 PM CST

    No, the Big 4 should be broken up. They are the guardians fulfilling that important role yet they have failed. There have been no substantial warnings, no barks from the watchdogs.

    To be fair assets were moved off the balance sheets….but hey, business is war. The Big 4 should and would have known of this through their various “networks”.

  29. Anonymous
    Anonymous says:


    On 10/22,you wrote: “As far as PwC’s experience and capacity to handle what they’ve been handed recently, the facts speak for themselves. They will be provided in a later post.” Two days later, you reiterated that you “have the facts”. It’s been 2 weeks, and we still wait with baited breath for your “facts”. You claim to be in possession of these “facts”,yet two weeks have passed and you have not shared them.

    What are these “facts” concerning PwC’s experience and capactiy? Why are you withholding these “facts” for weeks without posting?

  30. Francine McKenna
    Francine McKenna says:


    No “withholding, ” just other stories and personal and professional priorities that have taken precedence for the time being. In the meantime, several other blogs and mainstream media journalists have agreed with and elaborated on my concerns.

    And so it’s just a matter of time before Congress and other demand more accountability from Paulson and his lieutenants with regard to the vendors and related decisions made during this “crisis.” I suspect that whatever additional agrguments or support for my contentions I’ll make will not be sufficient for some. But that’s why I raise the issue in the first place. In the end it will be up to these public servants and the vendors they choose to prove they are up to the job, or they will face additional litigation.

    And I am sure that given the change we have just seen in the results of todays elction we wil see Congress and others demand more accountability and investigate legitimate concerns.

    Yes, we did have an election today. Maybe it wasn’t the result some were hoping for. But it exceeded my wildest dreams. So I’m going back to enjoying the moment now.

  31. Anonymous
    Anonymous says:

    PwC is run like the mob.

    These guys knew two years ago that the off the book items were going to ba problems. They have been expecting a huge economic downturn for month and have perpared for it.

    I find it funny, having worked for these thugs for years, that they seem to think that Sarbanes-Oxley does not apply to them.

    They have zero internal cotrols on client data, and have 45 terrabytes of data that they keep on file servers across the US and have no clue what that data is.

    Some of the offices are like drunken frat parties, and a number of execs have been taged for dui.

    The drug use has not got out much, but there is a reason that the admin offices are in Tampa Florida. With idots that built a $25 million data center in a catagory one huricane evacuation zone.

    When hurricane Charley came in a few years back it was predicted to hit the Tampa area. The PwC dolts asked for volunteers to ride out the storm in the datacenter, until Hillsborough County goverment told them that the area was a mandatory evacuation zone.

    And these people are to be trusted?

  32. Jim Spence
    Jim Spence says:

    I was searching for Blogs about federal government grant scam and found this site. I am interested in your content and appreciate sites like this.

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  4. […] feelings about PwC and EY receiving long-term contracts to support the “internal controls” over the TAR… program are well known.  Outrageous.  Two years later, the Congressional Oversight Committee has […]

  5. […] Group, their numbers were not looking so good befoe the bonanza that was the financial crisis sent so much work their […]

  6. […] The Big 4 audit firms have struggled with independence expectations before.  EY lost the right to take on new audit clients for six months over its relationship with PeopleSoft.  PwC and EY professionals have been convicted of insider trading recently and now Deloitte is suing one of their own Vice Chairman over insider trading. The firms have had issues with alliances and PwC got caught taking kickbacks from alliance partners for government work. They do strange and mysterious work that muddies the waters over whose side they are really on. They have cozy relationships with their travel services providers. They join their audit clients pre-retirement in senior positions. They are asked by the government to work with assets from failed financial institutions they audited. […]

  7. […] to KPMG’s Professional Standards Office ?   Am I the only one who thinks this is another slap in the face of the taxpayers, the shareholders, the professionals? We need a strong regulator over the […]

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