Please ensure Javascript is enabled for purposes of website accessibility
February 3, 2023

Accounting News Roundup: Who Else at KPMG Knew About Stolen Info?; The Revolving Door; Pot and IFRS | 01.24.18

kpmg general electric

KPMG indictment suggests many who weren’t charged knew regulator data was stolen [MarketWatch]
Francine McKenna’s dive into the indictment surfaced with a disturbing possibility: “at least five more unnamed KPMG partners and one outside consultant either knew or chose to ignore the illegal source of the information.”

Some Accountants Got Caught in the Revolving Door [BloombergView]
Matt Levine writes a clever and insightful column on the two primary ways for regulators to get a lucrative job in the private sector:

On the one hand, every employer prefers to hire diligent ambitious go-getters, so being a diligent ambitious go-getter as a regulator sends a good signal to prospective employers. On the other hand, regulated companies may prefer not to be regulated by tough regulators — but that is all the more reason to hire you. That way you’ll stop regulating them!

This situation concerning KPMG, as you might expect, falls into the latter bucket. Also, Matt makes a good point about the “data analytics” firm that KPMG hired to predict the PCAOB selections: “That is … just sort of a strange thing to do? Building a model of which of your work regulators will look at and which they won’t? There is something almost Uber-ish about explicitly building a model to game the regulators.”

KPMG believes it will be investigated over the collapse of Carillion [BI]
The House of Klynveld across the pond has trouble of its own. Carillion, an infrastructure contractor, declared bankruptcy on January 15, but in its last annual report, KPMG gave virtually no warning that the company faced any existential threats. The U.K. firm’s deputy chair says KPMG stands by its work and will cooperate with any investigation.

California Initiative Proposes Additional Income Tax on High-Income Earners [BNA]
The initiative would lop “an additional 1 percent tax on personal income over $1 million.” The revenue raised “would be used to help fund hospitals, clinics, and primary care providers serving low-income patients.” It needs 585,407 signatures by July 17, 2018.

Pot Sector Gets ‘Audited Hallucinations’ Amid Accounting Quirks [Bloomberg]
A wrinkle in IFRS allows some Canadian marijuana companies to report gross margins greater than 100 percent. One forensic accounting expert couldn’t resist: “It’s audited hallucinations. The marijuana financial statements have absolutely nothing to do with reality.”

Previously, on Going Concern…

A running list of questions about the KPMG audit inspection conspiracy.

In Open Items, Can I move from tax to financial reporting?

From the archives: Seriously, Stop Making Saturdays Mandatory During Busy Season

In other news:

Get the Accounting News Roundup in your inbox every weekday by signing up here.

See something we missed? Have a tip, correction, comment, or complaint? Email us at [email protected].

Image: Kuba Bożanowski/Wikimedia Commons

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

a dog wearing VR

Monday Morning Accounting News Brief: Deloitte on Microtransactions; More EY Split Roadblocks; Have You Become Irritable? | 11.28.22

Happy Monday! Here’s some stuff that’s going on. Several US audit firms told the Financial Times that they had elevated some or all of their crypto-related clients to the status of “high risk”, triggering a more thorough audit that will take longer and lead to higher bills; some clients could ultimately be dropped altogether. KPMG […]

woman working on a laptop with a dog beside her

Monday Morning Accounting News Brief: The Leadership Void; KPMG Gets Fined (Again); PwC Ups Leave | 10.3.22

Deloitte launches Global Sustainability & Climate learning program that aims to enhance skills and capabilities of Deloitte people to help address a global societal challenge. Dubai’s financial regulator has provisionally fined KPMG and one of its former partners $2 million over the firm’s auditing of Abraaj, the emerging markets private equity group that collapsed in […]