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November 29, 2022

Accounting News Roundup: PwC Facing More Courtroom Drama; Accountants and Climate Change | 02.09.17

More courtroom fun with PwC

Last summer, PwC spent a few weeks in court defending itself in a $5.5 billion lawsuit brought by the bankruptcy trustee of Taylor Bean & Whitaker Mortgage Corp. For a mega audit firm to go to court over the failure of one its clients was quite a rare and exciting event, but then, just when things were starting to get interesting, the firm settled for an undisclosed sum.

Six months later, PwC is back in court again, this time facing a $3 billion suit brought by the trustee of MF Global, the brokerage firm that went bankrupt in 2011. Things were just about to get rolling but the Financial Times reports that the parties have agreed to a slight delay:

Jury selection for a trial in New York was scheduled to begin next week, but on Monday US District Court judge Victor Marrero allowed a three-week delay for mediation. Neither side said it was prepared to give ground.

Oh, this is fun. PwC is represented by King & Spaulding, the same firm that defended them in the TBW case. The plaintiff’s team is led by Dan Fetterman of Kasowitz, Benson, Torres & Friedman but also features Steven Thomas, who has won several settlements against many of the largest firms.

PwC seems to be between a very big rock and a very hard place. After settling for a large sum to end the TBW lawsuit, it can’t feel good to facing another “existential threat” like this. Settling seems like a bad option; I can’t imagine the plaintiffs being too forgiving when the 2nd largest accounting firm in the world is on its heels.  Trial is a terrible option, too; what if they lose? Oh, and don’t forget that there’s a third billion dollar lawsuit out there. It doesn’t seem likely that all of this litigation could bring down a firm…but what if it does?

Climate change

Skeptics of climate change claim that the science isn’t settled, that somehow there’s some further research and debate to be had while Greenland falls apart into the sea. So if scientific consensus doesn’t convince them, would the results from a bunch of bean counters help?

Accounting Today reports on a Institute of Management Accountants survey that “65 percent of the respondents polled believe global warming is having a significant impact on the environment,” and, “a quarter of them are seeing a negative impact on the bottom line.” The IMA VP of research, Raef Lawson, points out that this isn’t a bunch of pinkos trying to push a tree-hugging agenda, these are “hard-nosed financial accounting professionals”:

That was one of the motivations for this survey. It was to see whether this idea of global warming was just some liberal fantasy or whether it was a reality, and 72 percent of the survey respondents said global warming is affecting their company. They’re implementing various initiatives to address global warming. It wasn’t motivated by regulation. It was motivated by the impact that global warming is having on the bottom line.

Honestly, if accountants have to save this planet from turning into a volcanic, thermonuclear hellscape, I’m fine with it. We’ll never hear the end of it, though.

Previously, on Going Concern…

In a piece sponsored by American University, Sal Christ wrote about moving from public accounting to a job in government.

I noted that the AICPA has Gen Z (and their short attention spans) on their radar.

Adrienne Gonzalez wrote about President Trump choosing EY’s Mark Weinberger to advise him on women in the workplace.

In other news:

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