@Forbes: Immigration and the Big 4, Fannie and Freddie Must Go
My Forbes column appears on Tuesdays and Thursdays.
Go here to read, Accounting Watchdog.
Columns for the week ending November 12, 2010:
Posts
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.
Put Your Money Where Your Money Is: The Auditors and the US Midterm Elections
/13 Comments/in Latest, Pure Content, The Case Against The AuditorsThe Big 4 audit firms prefer to contribute to candidates who are in powerful positions rather than focus on their party politics. It’s purely opportunistic largesse. They typically donate heavily to those in legislative leadership positions and to those in the position to take over leadership roles.
To use a hockey metaphor: The audit firms put their money more often where the puck is rather than where it’s going and hardly ever chase the puck for strictly ideological reasons.
Can I Have Your Autograph: Signing The Audit Report
/10 Comments/in Food for ThoughtWhen the PCAOB issued a Concept Release in late 2009 on requiring the engagement partner to sign the audit report boy oh boy were there a lot of comments. The firms came out en masse to denounce the proposal.
HP, Hurd, Deloitte and Tone at the Top
/29 Comments/in Latest, Pure Content, The Case Against The AuditorsLeaders of public companies, like policemen or firemen that do a job for money, also sign up for a public duty. As stewards of a public company, the CEO and CFO’s job is not a reward for years of service, an entitlement after achieving career objectives but a responsibility and honor that should be earned every day by setting an example for all those who work under them. The auditors serve the role of independent watchdog, guardian of shareholders’ interests in the capital markets. Their relationship to management should be adversarial – not friendly, cozy and comfortable.
Watch Banks Pull Rabbits Out of Hats, Ably Assisted by Their Auditors
/14 Comments/in Food for Thought, Latest, Pure ContentThe global money center banks are masters at managing financial reporting. Regulators repeatedly feign surprise at balance sheet sleight of hand, prestidigitation at the expert level intended to buy time until the banks can grow out of the black hole that bubble lending put them in. They announce their quarterly results, with all the details – they don’t even try to hide them anymore – and they’re ignored or the con is traded on for short term profits. We’ve yet to see the auditors called to testify to explain their role in blessing fraudulent bank balance sheet accounting.
Isn’t it about time?
The Auditors And Financial Regulatory Reform: That Dog Don’t Hunt
/28 Comments/in Food for Thought, Latest, Pure ContentI was invited to talk with Delaware Senator Ted Kaufman (D) and his staff last week about accounting industry reform. It’s not every day that a regular girl from Chicago has a chance to talk with a sitting US Senator about the subject most important to her.
No… I’m not talking about Rosie, my Rott.
I’m talking about the auditors’ role in the financial crisis and their place in the regulatory reform bills now being considered.
Fraud Happened: The No-Account Accountants Stood By
/31 Comments/in Food for Thought, Latest, Pure ContentThe financial crisis is now about fraud. The word that dared not be uttered, even behind closed doors, has now disturbed the peace of a nascent “recovery.”
In Pari Delicto: Are Auditors Equally At Fault In The Big Fraud Cases?
/16 Comments/in AIG, Fraud, Latest, Pure Content, The Case Against The AuditorsThe way I see it, the in pari delicto doctrine is being used like a pair of needle nosed pliers by audit firm defense lawyers to diffuse the bomb – huge liability for some of the biggest frauds in history. The in pari delicto doctrine attempts to pull the auditors’ tails from the fire by excusing any of their guilty acts due to the approval of those acts by potentially equally guilty executives.
Deloitte Wins Major Round Re: Alleged Inside Trader Flanagan
/57 Comments/in Latest, Pure Content, Your CareerDeloitte should be careful what they wish for. The Flanagan insider trading litigation has forced them to reveal their woefully inadequate policies and procedures regarding independence compliance. While trying to placate their clients who were dragged through the mud on this and exact revenge against their own leadership-level partner, a pillar of the Chicago social and philanthropic community, they’ve admitted to allowing Flanagan to breach their standards more than 300 times and to get away with it.
They Weren’t There: Auditors And The Financial Crisis
/25 Comments/in Latest, Pure Content, The Big 4 And GlobalizationWhen I ask, “Where were the auditors?” and decry the fact that “they weren’t there,” it’s not due to some unreasonable, unfair focus on the most milquetoast of potential culprits. I bang this drum because the auditors should have been there, as a last stop, where the buck should have stopped, as gatekeepers, watchdogs, advocates, and the last bastion of standards and expected values shareholders can look to.
But they weren’t.
Leadership: A Guest Post from Tenacious Truman
/20 Comments/in Pure Content, Your CareerLeadership: One Man’s Perspective by Tenacious Truman
At re: The Auditors we spend a lot of time talking about leadership—mostly the lack of it. We bemoan the “auditor” mentality, the substitution of management for leadership, and the lack of accountability.