Accounting News Roundup: Another Bank Settles for Billions; Women Need to Ask for Bigger Raises; Know Audit Failure When You See It | 07.14.14

Citigroup and U.S. Reach $7 Billion Mortgage Settlement [DealBook]
Billion dollar settlements don't get people excited like they used to: "The settlement, announced on Monday morning, includes a $4 billion cash penalty to the Justice Department – the largest payment of its kind – as well as $2.5 billion in so-called soft dollars earmarked for aiding struggling consumers and $500 million to state attorneys general and the Federal Deposit Insurance Corporation. The deal, after months of contentious negotiations, averts a lawsuit that would have proved costly for both sides and resolves a civil investigation into Citigroup’s packaging and selling of mortgage securities that soured during the financial crisis, causing large losses to investors."

Even When Women Ask for a Raise, They Don’t Ask for Enough [HBR]
Ladies, don't seel yourselves short: "If there are two job openings, why not ask for the dream role rather than the smaller promotion? Always ask for more than you think you deserve in terms of the job and salary level. We’ve found that women consistently undervalue themselves. They also underestimate where a given position falls in terms of salary range. This may be why a man, in most cases, is paid better than the woman sitting next to him doing the same job. They expect to be well-paid and they are not afraid to ask for more."

Auditors and the Financial Crisis: Part of the Solution or Part of the Problem? [re:TheAuditors]
Francine addresses the war of semantics between audit firms and their regulator: "In a recent inspection report for the US arm of PwC, the PCAOB cited four additional restatements, five downgrades to ICFR opinions and nineteen opinions it says should not have been issued out of 59 engagements reviewed. I’d call that auditor and audit failure."

As ready as we're gonna be.

Smith & Nephew ends 77-year audit relationship with EY [Accountancy Age]
Another long-term audit relationship bites the dust in the UK; KPMG will take it from here.

A Felon’s View of White-Collar Crime – Why Society is Very Vulnerable to Fraud [WCF]
A fraudster on fraud, including the value of financial statement audits: "[A]udits give investors a false sense of security. Traditional financial statement audits of public and private companies are not designed to find fraud. What accounting firms call an “audit” of financial reports is really a compliance review designed to find unintentional material errors in financial reports by examining a limited sample of transactions. In other words, traditional financial statement audits are designed to be spell-checkers and catch the accounting equivalent of innocent typos."

Ridiculous Study of the Day Says Smelling Farts Might Prevent Cancer [Time]
Think of this next time you get crop dusted in public: "[S]cientists out of the University of Exeter insist that smelling farts could actually prevent cancer, among other diseases. […] 'Although hydrogen sulfide gas'—produced when bacteria breaks down food—'is well known as a pungent, foul-smelling gas in rotten eggs and flatulence, it is naturally produced in the body and could in fact be a healthcare hero with significant implications for future therapies for a variety of diseases,' Dr. Mark Wood said in a university release. Although the stinky gas can be noxious in large doses, the researchers seem to think that a whiff here and there has the power to reduce risks of cancer, strokes, heart attacks, arthritis, and dementia by preserving mitochondria. Researchers are even coming up with their own compound to emulate the stinky smell’s health benefits."

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