In the last few weeks, I’ve written two very different stories about Deloitte. Both stories bothered me, but in different ways, so I was compelled to write about the firm both in unsympathetic and sympathetic terms. In the end, neither story says much about the state of the audit industry and the pre-2011 regulation of the audit firms.
It was a quiet almost-end to a sordid chapter in PwC’s history. Last week I wrote about PwC’s settlement of their Satyam class action lawsuits in New York for Forbes. Here’s some additional commentary and analysis, including links to all the stories I’ve written about the scandal since it broke in January 2009.
It’s the potential for sudden conflagrations in developing countries that keeps the global audit firms – PwC in this case – up at night. The legal quagmires in developed countries are messy, too. PwC may want to put the Satyam scandal behind them but, unfortunately, I fear there’s still much more pain for the firm to come.
The Big Four, off and on, have had some of the largest global consulting practices across most categories.The larger an organization gets, the more its staff takes on the average characteristics of individuals within the markets it serves. Mark O’Connor of Monadnock Research presents a guest post on the special risks posed by Big 4 audit firms who provide consulting services.
I was in Washington DC to attend the March 24 meeting of the new Standing Advisory Committee (SAG) of the new PCAOB. I was surprised twice by a report presented by the PCAOB’s Investor Advisory Group at last week’s meeting. First surprise: Chairman Doty was right. Good people are looking at the issue of auditor effectiveness, especially during the crisis. Second surprise: The report quoted me.
My Forbes column today is about the Chinese reverse merger market and recent reports of potential frauds – plural. I waited for the inevitable case that implicated a Big 4 audit firm. When it came I got two for the price of one and a bonus – a great new research paper from the PCAOB on the Chinese reverse merger phenomenon.
I wrote the post excerpted below for Forbes on February 25th, after seeing a great story by Jonathan Weil at Bloomberg on Citigroup. Now the WSJ reports that, according to “sources”, the SEC and Department of Justice are having trouble making a case against Lehman executives and Ernst and Young in that case. I’m sure […]
Big 4 audit firms are focusing on growth in their global consulting businesses but the conflicts that drove three out of four of the firms in the US to sell them after Enron are a bigger problem than ever before.
Enron, WorldCom, HealthSouth, Tyco, Parmalat, Adelphia, AIG…You would think enough lessons had been learned. The financial markets are a mess and the capitalist system threatened. The systems in place to anticipate and preempt market risk failed completely.
It’s time for the PCAOB Board to think about how they might respond when the audit firms are not going to be so pleased as punch. There’s much for them to address. I’ll be talking about some of those changes and improvements in future posts. But, the most important role of the PCAOB is the inspections process. Let’s take a look at how well that’s going.
“A law by itself does not bring benefits. Measure the benefits of the moral and ethical behaviors the law promotes and requires, instead.”
In 2011, the vast majority of public companies – those with market caps under $75 million – are required to file their 10-K and 10-Q with the SEC in XBRL for the first time. Is this another mandate translating into more business for the Big 4 or an opportunity for other audit firms to specialize and capitalize? A guest post from Daniel Roberts.
