It’s sort of sweet to see the CEOs of the Big 4 audit firms being treated like big deals at Davos. In the US, the media typically pays no attention to these guys unless there’s either a catastrophic accounting related failure – and the recent crisis is not being viewed as such by the media – or some icky accounting issue like mark-to-market or IFRS that necessitates an interview with any accountant. Some accountant. The US firm CEOs rarely give their opinion about politics, the economy or specific business issues unless guaranteed a friendly audience and coached by their media handlers to within an inch of their inauthentic humanity.
Davos is a big deal for the media and they’re hungry for content. Any content. The prepped and pre-scripted interviews are full of softball questions and carefully restrained probing. Whether giving air time to KPMG’s Flynn, Quigley from Deloitte, Deloitte’s Turley or PwC’s Nally, everyone sticks strictly to their assigned talking points. And repeats them, over and over…
“Regulators, central banks, governments and business leaders did a phenomenal job…,” Dennis Nally of PwC tells us in every video, one of which has their cheesy looking white type on red poster boards in the background touting their CEO Confidence Survey. That design is more than five years old! Will they ever retire it? I’m “cautiously optimistic.”
Nally fears,“a lot of populist statements, decisions, actions, etc that may sound good but don’t get us the substantive changes we need.” He was so slickly rehearsed, the Forbes journalist could only stand there and flip her hair. She couldn’t get a word in edgewise because he never took a breath. As the auditor to most of the most powerful, surviving financial institutions in the world – JP Morgan, Bank of America, Goldman Sachs, AIG, Freddie Mac, Barclays – I guess Mr. Nally knows who butters his bread.
“Different regulation, not more regulation,” was also a big theme. CNBC tries to throw Tim Flynn for a loop in a live interview. Questions came in from multiple correspondents all over the world speaking a Tower of Babel of accents. He clearly did not understand any of them because he kept repeating, “restore trust and confidence in capital markets, harmonize global regulation, it was a liquidity crisis that can be corrected with a global regulatory framework, we need long term sustainable growth…”
Mom, apple pie, hot dogs, and ice cream.
Tim Flynn got stuck being interviewed by CNN’s Richard Quest, the bombastic Brit with the “traffic light” gimmick, who loomed so large and bellicose he made Flynn look like a leprechaun. “We’re in a much better spot than last year, it’s fragile, confidence and trust, trust and confidence in capital markets, we act for clients with highest confidence and trust…” Was he trying to affect the jury pool for the KPMG/New Century trial? Save some of that for your panel, Tim.
CEO Jim Turley of EY and Jim Quigley of Deloitte must have been assigned IFRS as their homework. They were totally on, slipping it in whenever they could even when lovely Liz Claman gets confused and thinks she’s supposed to be conducting a serious interview. Liz asks Turley about black holes, gaping holes, sinkholes, potholes and Basel II. He changes the subject immediately and quite deftly, putting it back on program.
Repeat after me… “Better risk management, better accounting, and IFRS.” How ironic it is, given EY’s issues with Bally’s, tax shelters, and Hong Kong frauds, to hear this chant from Turley. Liz Claman even summed up for Turley, “Go for international accounting standards…” And then they headed to the bar for some hot toddies.
Quigley is also long Dubai, given that his firm got the big gig to help them work out their multibillion-dollar default. How is it that Mr. Quigley can prance like peacock about Deloitte’s role, even naming the partner in charge of the engagement, given client confidentiality issues?
Oh, I forgot. The auditors only claim “client confidentiality” when they’re asked about litigation.