@Going Concern “KPMG: That’s Just The Way We Roll”
My latest post is up @Going Concern.
Sex. Drugs. They didn’t mention rock and roll but I’m sure those stories will come out too eventually. Bernie and Elton John. Bernie and Mick Jagger. Bernie and Pink.
Scratch Elton John.
If it weren’t bad enough to have so many subprime lawsuits hanging over their head, the Big 4 – well everyone but Deloitte for some very odd reason – also have humongous Madoff lawsuits looming. KPMG was named yesterday in a suit for their audit of Bernie’s London operation. This is no “feeder fund” suit but more like a bottom feeder suit, with lots of nasty allegations and everything but the kitchen sink thrown in for kicks. Actually, plaintiff’s lawyers I know say it’s perhaps “too much” and may be sanctionable…
The rest of the post is here.
Reading the lawsuit between KPMG and Madoff it is clear that their client acceptance procedures were flawed. As a former KPMG employee i know that you have to look at the affiliated companies and see who is auditing them. The auditor of the holding company with such a small office should have been a red flag. KPMG dropped the ball and failed to properly evaluate risk. They did not get the big picture. This must be grim news over there.
I agree. For the feeder fund auditors it’s a more difficult case to make but with regard to Madoff’s London operation it’s an egregious mistake on someone’s part. I remember a post I wrote a while ago about KPMG’s leader in London Mr. Griffith-Jones. He asked the regulators (and his partners worldwide) to “just trust me.” I believe that trust was clearly unfounded. https://francinemckenna.com/2008/03/25/kpmg-uks-griffith-jones-trust-me/