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
/in Audit Quality, KPMG, PCAOB, SEC, The Case Against The AuditorsThe 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.
Piling Up For PwC
/in Audit Quality, Independence, KPMG, Liability Caps, PCAOB, PricewaterhouseCoopers, Pure Content, Regulators, Laws, Standards, Regulations, Sarbanes-Oxley, SEC, The Case Against The AuditorsUpdate: 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
/3 Comments/in Audit Firm Management, Independence, KPMG, PCAOB, Pure Content, Regulators, Laws, Standards, Regulations, Sarbanes-Oxley, SEC, You Can Quote Me On ThatIt’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.
Big Four Auditors and Jury Trials: Not In The U.S.
/19 Comments/in Audit Quality, BDO, Deloitte, EY, Grant Thornton, KPMG, Latest, PCAOB, PricewaterhouseCoopers, Pure Content, Regulators, Laws, Standards, Regulations, Sarbanes-Oxley, The Case Against The Auditors, The FirmsYou 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.
KPMG May Answer For GE Tax Work
/4 Comments/in Audit Firm Management, Independence, KPMG, PCAOB, Pure Content, Regulators, Laws, Standards, Regulations, SEC, The Big 4 And ConsultingGoing Concern reported yesterday that KPMG professionals have been ordered to preserve all correspondence and documentation related to the tax “loaned staff” assignment it has with long-time client GE. That means someone – the SEC or PCAOB – is investigating.
Making Mortgage Fraudsters Pay…But Via Private Lawsuits (And Some Attorneys General) Not Law Enforcement
/9 Comments/in Audit Quality, Deloitte, EY, Fraud, KPMG, Latest, PricewaterhouseCoopers, Pure Content, Regulators, Laws, Standards, Regulations, SEC, Subprime, The Case Against The AuditorsThank goodness for the plaintiffs’ bar and class action lawsuits. And state attorneys general. Without them, there’d be very little justice yet – or compensation – for any of the mortgage-related fraud perpetrated during the real estate bubble.
Repurchase Risk (Put-Back) Getting Full Court Press At CNBC
/8 Comments/in KPMG, The Case Against The AuditorsJohn Carney at CNBC NetNet is talking a lot about repurchase risk. He’s tied it all together in a bow for us, mentions Citigroup and Bank of America, and has given me credit for having been on KPMG’s case for a while.
Treasury Votes To Reappoint KPMG As Auditor of Citigroup
/11 Comments/in KPMG, Regulators, Laws, Standards, Regulations, Writing for OthersThe US Treasury recently affirmed reappointment of KPMG as Citi’s auditor for the 41st consecutive year. Maybe Treasury married KPMG all over again because they’re cheap compared to what Goldman and AIG are paying PwC. Or maybe Treasury feels like the mother who puts up with a gold digging daughter-in-law because said daughter-in-law saw mom kissing the tennis pro and mom knows her son has slept with the baby-sitter…
Auditor Independence: Will “Crisis” Cause Compromise?
/13 Comments/in Independence, Internal Audit, KPMG, Latest, PricewaterhouseCoopers, Pure Content, Sarbanes-Oxley, The Big 4 And GlobalizationGiven the pressures on costs and the longstanding ties some finance, audit, and accounting executives have with the accounting firms, it is not surprising that the weakening of the independence commitment may come from the companies themselves. What’s the downside for them? The potential for scrutiny by corporate governance experts and journalists? You can’t argue with a recession. And in the event of an accounting scandal or restatement, plaintiff’s lawyers will have an uphill battle to penetrate the impenetrable auditor liability shields and caps.
What’s lost in all of this discussion of efficiency and cost cutting?
Independence protects shareholder’s interests.
It’s A Race To The Finish – But There Are No Winners
/85 Comments/in BDO, Deloitte, EY, Grant Thornton, KPMG, Latest, PricewaterhouseCoopers, Pure Content, The Big 4 And GlobalizationNot so long ago, Dennis Howlett and I went public with a bet:
Which Big 4 audit firm is the next to fail?
Dennis believes that I’m betting on PwC as next to fail. I don’t honestly remember committing to that, but I’m willing to go with it for the sake of argument. This is in spite of the fact that the other Big 4 have plenty to worry about and the next tier firms are in no way ready for prime time.
KPMG Has A $1 Billion New Century Problem
/36 Comments/in KPMG, Latest, New Century, Pure Content, The Case Against The AuditorsKPMG is being sued for $1bn by the liquidators of New Century, the collapsed subprime lender, in the first big case against an auditor arising from the current financial crisis. If the New Century trustee is successful, “it may embolden others to look more closely at the possibility of bringing [accounting] firms to some level of culpability for the things that happened,” that led to the credit crisis, Francine McKenna, president of McKenna Partners LLC, a corporate-governance consultancy, said in an interview in the Wall Street Journal.