I’m now writing for Forbes twice week, Tuesday and Thursday, under the title, Accounting Watchdog.
My first two columns were published this past week.
KPMG is in the news again about taxes.
Citigroup (NYSE:C), audited by KPMG for the last forty-one years, posted a profit for its third consecutive quarter after cutting its loan loss reserves. But the bank is potentially under reserved in the event Fannie Mae ( NYSE:FNM), Freddie Mac (NYSE:FRE), and the Federal Home Loan Banks prevail in forcing significant mortgage loan repurchases. Citigroup was heavily criticized prior to the earnings release by an analyst for, in his opinion, higher than justified balances for deferred tax assets – a “cookie jar” of sorts used to offset taxes on future profits. I’m guessing Citigroup is the unnamed “Issuer B” in the most recent inspection report for KPMGissued by the PCAOB, since one of the failures the regulator found was related to lack of scrutiny of the client’s deferred tax assets.
I’d like to make the accounting industry exciting for you. Maybe even sexy. It’s a tough job but somebody’s got to do it. My own website is peppered with music videos, photography, art, and illustrations intended to poke fun, add subtle sarcasm and, occasionally, inject irony. Truly, I’d settle for making the role and responsibility of the auditors a bit more interesting to a broader business audience. Even better, I want you to be mad as hell about accounting watchdogs with no bite during the bubble and no bark before the crisis.