Stan Correy, a reporter for the Australian Broadcasting Company, interviewed me for his radio show, Background Briefing and the segment, “Auditing the Auditors,” aired Saturday the 13th, at 7pm EST, 6pm CST and 9am Sunday August 14th in Australia.
It was repeated in Australia at 7pm Tuesday and is available as a podcast. There is also a transcript available.
Where does the buck stop when big banks and corporations, even nations collapse. Who signs off on the books? The auditors or the directors of the board? And who should tell investors when there’s something shifty going on? Who are the auditors answerable to? Reporter, Stan Correy.
Stan told me that I speak directly about a subject where so often other people try to obfuscate. One of the problems he had, I’m sure, and that I have every day is making news of auditing, accounting, and the business of the Big Four audit firms accessible to an audience that may think it’s boring or that nothing much happens.
Even general business professionals are sometimes confused or completely unaware of the role that Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers play in the capital markets and global financial system regulatory scheme.
Given the serious economic issues we are all dealing with, all over the world, I’m glad to see journalists like Stan Correy push the story of the audit firms and the accounting industry off the business pages and onto the front page.
Updated: I listened to the show live and had goosebumps. It’s a great summary of the state of the audit industry and, therefore, the accounting profession.
I was quoted generously based on Stan’s extensive interview with me. I was also pleased to hear so many other distinguished commenters including several university professors, John Carney from CNBC, and Richard Murphy in the UK.
Stan gives me the last word, in response to investor John Hempton who recently defended the audit firms, in particular Deloitte, for the Chinese reverse merger frauds.
John Hempton: What auditors do and what they’re expected to do is follow process. And there’s a perfectly good reason why you follow process; if you follow process in a world where most things are honest, the process works, and auditors get into trouble when they don’t follow process. The problem is that the process doesn’t work in China, ‘cos this is so pervasive that there’s no fixed point of reference.
Stan Correy: John Hempton from Bronte Capital.
Columnist for Forbes Magazine and herself an auditor, Francine McKenna, doesn’t buy the partial defence argument. She says auditors who take on these jobs should be looking at these clients as extremely high risk. After all, it hasn’t been a secret, even in China, that fraud is a problem in government and the private sector.
Francine McKenna: The audit firms are so… it’s so embarrassing to the profession for me, their most common response when they get hit with a fraud-I mean, I could show you several examples, quotes-they’ll say, ‘We were victims too. We were fooled; we were duped.’ What other profession is willing to say that they’re idiots and incompetent and can be fooled over and over and over again by their own clients, just for the sake of evading liability? It’s embarrassing! It’s embarrassing.