My take on the latest at the PCAOB and KPMG
In Episode 449 of the FCPA Compliance Report, I spoke with Tom Fox to discuss the current status of the KPMG defendants and what their conduct means for the audit profession going forward.
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Update: Botta v. PricewaterhouseCoopers LLP, Case 3:18-cv-02615-RS
/in Audit Firm Management, Audit Quality, Featured, PricewaterhouseCoopers, Pure Content, The Case Against The AuditorsA 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.
Do Investors Care At All About Audits Anymore?
/in Food for Thought, Pure ContentWould investors still pay for an audit if it weren’t legally mandated? Are regulators and exchanges perpetuating a government-mandated oligopolistic exclusive franchise for the Big 4 and a few additional firms that produces information investors now ignore?
New research: Accounting students are not generally psychopaths but some slip through
/1 Comment/in Audit Firm Management, Your CareerNew academic research says accounting students are less likely to be psychopaths who will commit fraud but surprising admissions by some suggest a reason to be wary.
New Stories about the KPMG-PCAOB Scandal
/in Audit Firm Management, Audit Quality, Latest, Pure Content, The Case Against The Auditors“Innovation demands risk-taking… which, in turn, entails redefining failure, stripping away its power to inhibit.” Chairman and CEO of KPMG Lynne Doughtie
Another Update on the Case of FDIC v PricewaterhouseCoopers re: Colonial Bank
/in Fraud, Independence, Internal Audit, Latest, MF Global, PCAOB, Pure Content, Sarbanes-Oxley, SEC, The Case Against The AuditorsOn February 28 the US Justice Department fined Deloitte & Touche LLP $149.5 million for alleged fraud against the government related to its role as the independent outside auditor of Taylor, Bean & Whitaker Mortgage Corp. Also: The damages phase of the FDIC v. PwC case regarding Colonial Bank is set to begin in Washington DC on March 20.
Revenue Recognition is Coming: Part 2
/in Food for Thought, Pure ContentI’ve been coaching my colleagues on how to spot updates and interesting anecdotes about revenue recognition during the second quarter earnings season. Now we are catching up on the Qs filed and comparing disclosures after concentrating on what was said in earnings releases and calls.
Revenue Recognition is Coming: Following the Progress at MarketWatch
/in Food for Thought, Pure ContentOnce I returned from my Stigler Center fellowship I got to work catching up on the new standard, talking to experts everywhere and working with Audit Analytics to come up with the data to support stories–by my and my colleagues–about companies and their response to the new standard. My goal was to pick some of the obscure topics that were unique or focused on a specific industry.
At the Stigler Center Pro-Market Blog: Big 4 Lobbies Against SOx
/in Audit Firm Management, Audit Quality, Pure Content, Regulators, Laws, Standards, Regulations, Sarbanes-Oxley, SEC, Writing for OthersThe last time anyone attempted to “modernize” auditor independence rules it was the Securities and Exchange Commission, in 2000, before the Enron failure and Arthur Andersen’s demise, as a result of the growing concern that firms increasing focus on consulting was distracting them for their core purpose, auditing. The Big Four firms are now opportunistically lobbying to go back in time, before Enron, when the industry was self-regulated and mostly left alone, able to have as many conflicts of interest as their powerful public clients would allow.
More on KPMG and the Precedents for Possible Punishment
/in Featured, The Case Against The AuditorsWhy did they do it? The WSJ walks around the question but KPMG may face big fines and, I think, its partners and the PCAOB professional could face criminal charges.
KPMG Takes Its Turn With a Big 4 -Sized Scandal
/1 Comment/in Madoff, Pure Content, Your CareerThe 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.