Earlier today we brought up some less-than gentlemanly behavior going on at PwC Ireland. However, that wasn't the first story of misuse of email coming from the Emerald Isle. You may recall a few bros at KPMG asking for some assistance winning a trip to Whistler, which was received with mixed reviews in the States. Anyway! Now comes the story – courtesy of our sister from another mister, Dealbreaker – about another KPMG associate maybe not using the best judgment, sharing his plans for putting the moves on a special lady friend with his mate over firm email. From: Ian [redacted] Sent: 22 October 2010 10:24 To: John [redacted] Subject: RE: Wed Good night on wed man. Good old craic. Any luck with the ladies Kind Regards, Ian [redacted] Financial Services Audit 2 Harbourmaster Place IFSC Dublin ____________________________________________________________________________ From: John [redacted] Sent: 22 October 2010 10:28 To: Ian [redacted] Subject: RE: Wed Was a very good night. Got very messy in the end. No luck with the ladies. Had my eyes on this one girl, [redacted]. Some piece of work. But bottled it in the end _________________________________________________________________________________ From: Ian [redacted] Sent: 22 October 2010 10:45 To: John [redacted] Subject: RE: Wed I know the one your talking about alright. Shes friends with one of my mates in my year. Seems like a nice girl. Gonna chance it next time _____________________________________________________________________________ From: John [redacted] Sent: 22 October 2010 11:24 To: Ian [redacted] Subject: RE: Wed Definiately going to stick the head in next time. Falling behind on this whole k score thing. Need to get on board. Shes top notch in fairness What u reckon? ______________________________________________________________________________ From: Ian [redacted] Sent: 22 October 2010 11:40 To: John [redacted] Subject: RE: Wed Ya, sure go for it if you like her _____________________________________________________________________________ From: John [redacted] Sent: 22 October 2010 11:48 To: Ian [redacted] Subject: RE: Wed Alright next thurs, im gonna stick the head in. Just wait for the right moment. (When shes drunk) and she cant say no. Got this unreal technique for scoring aswel, called the whisper. I pretend im whispering in her ear and when shes not looking I just kiss her. The element of surprise throws then off and BOOM. ______________________________________________________________________________________________ From: Ian [redacted] Sent: 22 October 2010 12:04 To: [the girl] Subject: Wed Hey [girl], Thought id give u the heads up about this chap John here. Think he has some serious plans for you __________________________________________________________________________ From: [everyone who was forwarded this] To: [everyone they know] Subject: read from the bottom up!!!
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KPMG Got Fired by North American Savings Bank After Six Months on the Job
Technically, if you count the days (based on the 8-K) it’s less than six months.
The reason? Without getting too wonky, it appears NASB wasn’t thrilled that KPMG challenged their valuation method of a real estate investment, Central Platte Holdings, LLC.
Klynveld had been engaged to audit the September 30, 2010 financial statements of NASB but things managed to get confrontational right off the bat as KPMG raised questions about the Company’s valuation methodology of Central Platte in its first quarter review.
This must have made NASB a little uncomfortable since KPMG’s methods might not paint as rosy as a picture and could have resulted in a restatement. Per the 8-K, “KPMG also informed the Company that if the investment was determined to be impaired, evidence existed which indicated that such impairment may have occurred in a prior period.”
Obviously the mere idea of a restatement was completely unacceptable for NASB but when KPMG requested that the Company engagement a third party appraisal, they really freaked. Either the bank didn’t want to pay for said third party’s services, or they were worried that the appraisal would show that Central Platte wasn’t worth squat.
More from the 8-K filing:
At KPMG’s request, management estimated the fair value of the investment in Central Platte. After reviewing management’s estimate of fair value, KPMG requested the Company obtain an independent third party appraisal of the fair value of the investment. KPMG did not complete their review of the fair value of the investment in Central Platte prior to their dismissal.
While the Company continues to evaluate whether it should change its accounting method in measuring impairment of the investment in preparing the financial statements for the quarter ended December 31, 2009, the Company disagrees with KPMG that its method of evaluating potential impairment of the investment in such period or in any prior
periods was in error.
For those of you unfamiliar with SEC filing lingo, the statement “the Company continues to evaluate whether it should change its accounting method,” actually means “We’re not changing shit.” Luckily, NASB knew that it can rely on their old auditors to give the thumbs up to their preferred method so they ran back (weeping and arms flailing no doubt) to BKD.
Maybe KPMG’s Kansas City office needed business but something tells us they’re better off.
Real estate dispute leads NASB Financial to switch auditors [KC Star]
8-K [SEC.gov]
PFF Bancorp Creditors Want to Probe KPMG So They Can Determine if They Can Sue KPMG
In anything is better than the shit BP has on its hands news, Reuters reports that creditors of PFF Bancorp Inc are requesting permission from a U.S. Bankruptcy Court in Delaware to snoop around “information in KPMG’s possession” to find out what the firm knew about PFF’s over-leveraged, under-capitalized, risk-loving ways.
The company’s committee of unsecured creditors wrote in their request that “Information in KPMG’s possession may support potential claims against third parties and against KPMG itself, if, for example, it becomes apparent that KPMG knew or should have known at an early date of any overly-aggressive or inadequately-controlled loan practices of the (company).”
So in other words, PFF would like to – pretty please – sue someone’s ass and they’d like to confirm whether or not KPMG will be a good candidate for said ass suing. So assuming the bankruptcy court gives them the thumbs-up, PFF will send in the hounds to find out what’s what. And they’ve covered themselves nicely by using the wonderfully subjective “knew or should have known” so KPMG’s only option will be to invoke the “we were duped” excuse, which isn’t such a flattering option.
KPMG didn’t respond to Reuters’ request for comment or our email but we’re guessing they’re less than enthused about sharing what is in their audit workpapers. Not necessarily because the documentation will have a smoking gun but more so because they might discover that the partner on the engagement has a bad habit of doodling and that’s just embarrassing.
An Audit Associate at KPMG’s NYC Office Has Died
Ed. note: an earlier version of this article used male pronouns based on the information […]