BDO's Inspection Report
One of the big complaints about PCAOB inspection reports is that they aren't timely. Example: BDO's 2014 report just came out yesterday and it's difficult to get too excited about it even though the results are pretty bad. Of 22 audits inspected, 17 had deficiencies with the majority of those (15) related to both the financial statements and internal controls over financial reporting. Drilling down further, you find that some audits were more deficient than others: Issuers A, C, G, H, and I are notable.
And while the reports are more user friendly than they used to be — tables and pie charts! — as a reader, you never walk away with a good idea of the firm's audit quality. There's no executive summary. There's no conclusion. The details of the issuers' deficiencies are dense and would be far more interesting if those users weren't anonymous.
Some of this stuff the Board can't control — naming the users, for example. But there is something to be said for salesmanship. That is, if you want people to care about this stuff, (other than obscure bloggers with nothing better to do) then the user experience matters. That means not making them think too hard or read too much. Just like the internet! Or give them a grade like a restaurant inspector would. That's easy enough.
tl;dr: BDO's audits are not up to snuff. PCAOB inspections aren't useful. (But a tl;dr section in PCAOB reports might be a good idea!)
EY and Adobe
Over the past year or two, Big 4 accounting firms have announced partnerships with technology companies: PwC and Google; Dell and Deloitte; EY and Microsoft; KPMG and Watson. Yesterday, EY announced another partnership with Adobe that's not quite what you'd expect from an accounting firm:
EY and Adobe announced a new strategic alliance to expand EY’s digital experience and web content services, providing digital transformation programs to the Big Four firm’s clients.
“As the market continues to shift toward the concepts of digital enterprise and experience-led transformation, EY sees this as a key opportunity to team with Adobe to develop a new suite of capabilities and offerings to support our clients in this digital ecosystem,” stated Greg Jenko, principal of Ernst & Young LLP and EY Americas Global Digital and Emerging Technology leader. “The alliance with Adobe further strengthens EY’s ability to provide clients with a complete digital marketing suite for strategy, marketing technology, content management and analytics.”
I reckon EY saw how much money Delotte and PwC's fancy agencies were making and figured they needed to up their game a little. Now that the Adobe deal is done, I think a person can safely predict that EY will acquire a gaggle of creative shops over the next year until they're feeling more secure about their digital business. Then they'll reach out to Digiday for an exclusive inside look at their nearly billion-dollar agency. These things aren't complicated.
Here's a thing that happened:
Universal Truckload Services Inc., a transportation and logistics company in Warren, Mich., named Jude Beres CFO, succeeding David Crittenden, its CFO and treasurer since December 2012, who resigned to pursue other business interests. Compensation information for Mr. Beres wasn’t immediately disclosed. Mr. Crittenden will receive $343,500, payable in 52 weekly installments, for severance and for signing nondisparagement and confidentiality agreements. He will also provide consulting services for one year as the company needs them and receive $130 an hour for his time.
Are the consulting services at $130 an hour really necessary? Does he really want to track his time and submit invoices? Why not ask for additional $100k and be done with it? Executive compensation is weird.
Previously, on Going Concern…
Megan Lewczyk encouraged everyone to give up Excel for databases. Needless to say, it's getting heated.
In other news:
- Valeant Lenders Agree to Amend Terms of Debt
- Pfizer's CEO went to a happy place: the Wall Street Journal opinion page.
- Why We Are Still Reaching for Wallets, Not Phones, at the Checkout
- “Strangely enough, if you take reasonable tax positions, you may not need to defend them.” (via Joe Kristan)
- Costco love.
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