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January 23, 2023

Accounting News Roundup: Partners Acting Like Fraudsters and GE’s Black Box | 01.25.18

KPMG-revolving-door-PCAOB

What the KPMG Conspiracy Case Revealed About Its Audits [WSJ]
Michael Rapoport’s report brings up all the doubts that people are feeling, including former SEC chair Mary Jo White going for the double adverb: “It’s obviously extraordinarily disturbing and an extraordinarily important case to have brought.”

Lax oversight allowed ex-regulators to jump to firms they oversaw [NYP]
Kevin Dugan reports that until last summer, the PCAOB did not have a policy that prevented its inspectors from immediately taking jobs with the firms they reviewed. He rattled off examples from Deloitte, EY, and PwC.

Moral Hypocrisy: The KPMG / PCAOB Scandal [FraudBytes]
BYU Professor Mark Zimbelman writes on his blog that “these KPMG partners appeared to be taking a page out of a fraudster’s playbook and hiring former PCAOB employees to discover the PCAOB’s audit plan. When top partners from an audit firm are acting like fraudsters, we know there are problems.”

SEC Has Opened Probe of GE’s Accounting [WSJ]
The Commission is looking into revenue from GE’s “long-term service contracts for projects like power-plant repairs and jet-engine maintenance.” Jamie Miller, GE’s CFO, says she “hasn’t seen indications of accounting problems,” but one analyst isn’t convinced: “If you were concerned about black box issues in the past, aren’t you much more concerned about it today?”

Trump picks tax lawyer as next IRS commissioner, sources say [Politico]
There is “no tangible connection” between President Puny Digits and Charles “Chuck” Rettig, except maybe POTUS reading an article where Rettig “defended Trump’s precedent-breaking decision to shield his tax returns from public scrutiny.”

Previously, on Going Concern…

Greg Kyte’s Exposure Drafts cartoon wants you to shut up and book the hits.

Five Ways That Accounting Knowledge Will Instantly Upgrade Your Business IQ (This post is sponsored by the University of North Carolina Master of Accounting Program.)

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