The KPMG/PCAOB scandal is neither the first or last time a Big 4 firm reminded us that there’s nothing special anymore about being a Big 4 firm professional The firms, and their partners, are not capitalist eunuchs, immune from perverse incentives that advocates for free markets say, if big enough, can corrupt anyone.
My MarketWatch colleague Andrea Riquier took a field trip to Indiana earlier this year on a tip about a group that helps people struggling to get their act together and prepare for home ownership. It’s a nice thing to see, given all the ongoing struggles many still have with jobs, finances and the challenges of this economy, especially in the heartland.
Jim Doty’s term as chairman of the PCAOB, the audit regulator, expired in October. All summer since I arrived in Washington D.C., leading up to that date and since, there’s been speculation about whether or not SEC Chairwoman Mary Jo White would reappoint him to the job.
Bank regulators should start hiring the consultants that are responding to bank regulatory sanctions, consent decrees and NPA/DPA legal orders directly, and also strictly monitor them. It’s time to change for regulators to change their approach before another waste of time, money and public trust occurs.
I have two articles in the University of Chicago Booth Capital Ideas Magazine Summer 2014 issue. One is about bank monitoring of private company financials and the other is about bank stress test disclosure. Their cover story, “Think you’re not a racist?” is also worth a close read.
“If accounting errors were felonies in California, Fannie Mae would already be serving life under Three Strikes.” That’s what GoingConcern.com said. See what I told TheStreet.com about Fannie Mae’s latest multi-billion dollar “adjustments”.
There’s a conference planned for next week, May 15, at Gleacher Center in Chicago, “30 Years After the Failure of Continental Illinois Bank: Have We Solved Too Big to Fail?” I wrote about my experience at CINB, my first job, for American Banker back in 2011.
GM is in trouble again and this time it’s worse than some weak internal controls or even a bankruptcy. Cost cutting may have discouraged the prompt replacement of faulty ignition switches now linked to at least 13 fatalities and the recall of 2.6 million vehicles. Are you still glad we bailed the company out?
Should audit and auditor failure be solely defined by identified material misstatements that result in restatements, and internal control failures? I don’t think so but Jay Hanson, PCAOB Board member, said so recently.
My notes for guest lectures (there were two sections, back-to-back) February 10, 2014 for Bus F332/Law 725, Finance and Society, at Stanford University Graduate School of Business, taught by Professor Anat Admati. Emphasis: The auditors’ role in corporate governance in financial institutions and specifically how auditors not inadvertently stifle the actual use of compensation clawbacks.
Two new pieces, on ethics and investor protection, at Al Jazeera America Online.
Does the PCAOB’s proposal on naming lead audit partners for US listed issuer audits contemplate any exemptions? No, but they do exist in the jurisdictions that say they hold lead audit partners accountable.