Update: Botta v. PricewaterhouseCoopers LLP, Case 3:18-cv-02615-RS

A judge denied PwC’s motion for summary judgement. The case goes to trial in October. Mauro Botta brought an action in district court in California against PricewaterhouseCoopers LLP alleging that PwC wrongfully terminated him in retaliation for a whistleblower complaint he made to the Securities and Exchange Commission about PwC’s auditing practices. There’s been a lot written about the case, which is ongoing.

An SEC Fine for KPMG in the PCAOB Data Theft Scandal and Another Horrible Revelation

“Innovation demands risk-taking… which, in turn, entails redefining failure, stripping away its power to inhibit.” Chairman and CEO of KPMG Lynne Doughtie

The Question of the KPMG Whistleblower

The timeline of who told whom what and when, this time around for KPMG, is a bit more complicated than David Middendorf described in his testimony in the criminal case against him for allegedly conspiring to steal PCAOB inspection data.

McKenna On Buffett, Berkshire Hathaway, and Kraft Heinz

Has Warren Buffett run out of long-run? The stars aligned and Warren Buffett issued an annual shareholder letter that was forced to include an embarrassing charge for significant losses on Berkshire Hathaway’s investment in Kraft Heinz. Buffett’s letter was a rant against GAAP, and a 180 degree turn from his typical long-term focus. I was in New York […]

Deloitte US First Female CEO; There’s More We Don’t Know

Wouldn’t it be nice if investors and other interested parties could look up new Deloitte US CEO Cathy Engelbert in a public and easily accessible registry and find out about all the audit clients where she has been a lead partner or a Quality Control partner? Has she ever been named in a lawsuit or been sanctioned? Let’s hope not.

Piling Up For PwC

Update: The PCAOB is investigating PwC for its tax avoidance advice to Caterpillar, the Wall Street Journal is reporting. One down, more than 100+ PwC audit clients advised via Luxembourg to go…

Not That Satisfying: SEC Slams KPMG For Independence Violations

It’s been almost three years since I first broke the story of KPMG’s loaned tax staff arrangement with audit client GE. On January 24 the Securities and Exchange Commission (SEC) announced an $8.2 million settlement with KPMG over violations of auditor-independence rules. The wheels of justice turn very slowly. But the GE case was not one of the three cited as the subject of the enforcement action.

Winning! PwC Argues Both Sides Of The Partner Naming Debate

How do the audit firms keep winning the war while losing battles left and right? They use the law and the courts to delay, deter and distract from transparency by settling, and sealing what they can, before the public can find out what silly arguments they often make in their defense.

E&Y, Their Audit Client Wal-Mart, and Value Pricing

This post about Ernst & Young’s aggressive tax advice to audit client Wal-Mart was originally posted October 29, 2007. It’s worth everyone – I’m talking to you SEC and PCAOB – taking another look at this given Wal-Mart’s new Mexican bribery problems and the SEC investigation of Ernst & Young for tax lobbying to audit clients. (Ernst & Young has been silent and left out of most media discussion about Wal-Mart’s FCPA problems in Mexico and elsewhere.)

Big Four Auditors and Jury Trials: Not In The U.S.

You have to go outside of the US to see a trial of a Big Four audit firm to know what I’m talking about. Australia’s Centro case against PwC or Canada’s Nortel case where Deloitte partners testified recently tell you everything you need to know about why the Big Four will settle every time. Rather than have a jury and the public hear and see the pathetic state of the audit profession, its inability to stop executives who want to cheat, and its unwillingness to acknowledge liability as a firm when it screws up, the firms will reach into their seemingly bottomless pockets and pay up.

When Is A Hedge Not A Hedge? The Accounting For JP Morgan’s Bet

Yesterday’s column at American Banker digs into the accounting for JP Morgan’s reported “hedge”. I was shocked – OK, not really – that no main stream media outlet had explained the stunning announcement made by Jamie Dimon last Thursday.

Update: Mortgage Servicer Foreclosure Review Process

I was the first to report on December 6 the irony of Deloitte having been selected by, of all banks, JP Morgan Chase. The high likelihood of a conflict between the bank and the audit firm, and possibly the individual Deloitte partners assigned to the JP Morgan Chase review, should have been obvious to anyone at the OCC. It turns out I was right.