It’s a full time job.
I’m kidding. I divide my time between at least four firms and all of them have been keeping me super busy lately. Well, not just lately. I’ve been rolling this stone up the hill the last 6+ years.
Can you say “anecdotal evidence” there’s something wrong with the firms at the top of the audit industry?
(At the AAA-Audit Conference in New Orleans a few weeks ago, the first person with a question after my keynote set himself up as the devil’s advocate. He was going to tell me what some in the room may have been thinking about my speech, starting with the fact that my long list of audit failures, frauds, scandals and other illegal activities perpetrated by the firms and their clients in the last few years was just “anecdotal evidence” and not conclusive proof that anything was really wrong with the profession. There’s one in every crowd…)
Last week at Forbes.com, I updated readers on three of PwC’s clients that had been in the news recently for all the wrong reasons – Chesapeake Energy, MF Global, and Caterpillar.
Watchdog PwC never warned investors of faulty management and fraud that’s tanked shares, forced out top executives and resulted in expensive, ongoing private, civil, and potential criminal litigation.
PricewaterhouseCoopers LLP is, for 2012, again the largest accounting firm in the world, according to Big4.com, after losing the crown temporarily to Deloitte in 2010. PwC is also the largest audit firm, a distinction that must be made given the reemergence of the consulting practices at PwC, KPMG, and Ernst & Young ever since the expiration of non-compete agreements signed when their consulting arms were sold post-Sarbanes-Oxley. (Deloitte never sold its consulting arm and has, therefore, enjoyed a distinct advantage to the other firms, not losing any growth momentum between 2002 and 2007.)
All four – Deloitte, PwC, KPMG, and Ernst & Young – audit and consult, advise on taxes and manage bankruptcies, provide due diligence and accounting advice for acquisitions and investigate frauds when deals go wrong. You can’t throw a rock at a fraud or scandal nowadays without hitting three, sometimes all four, of the largest firms performing one role or another. The Big Four global accounting firms make money whether clients survive and thrive or flail and fail…
You get the idea… I hope.
Read the rest of, “Clients Flounder And Fail But Auditor PwC Prevails,” at Forbes.com.