KPMG withdraws audit opinions on CFTC over accounting error – documents [Reuters]
Well, this doesn't look very good. KPMG is yanking its audit opinions of the Commodity Futures Trading Commission for the years 2005-2008 and 2010-2014 over "understatements are the equivalent to more than 75 percent of the CFTC's $250 million annual budget." The issues relate to how the CFTC accounted for its lease obligations, apparently the agency "was only accounting for a year's worth of rent – and not the full cost of the lease over time." And if you're sitting there thinking, "What, did they have n00bs working on those audits?" you're not the only one with that hunch.
In other KPMG-ish news, a former partner in the UK was among 10 people charged with "tax cheating offences."
Boards Get More Independent, but Ties Endure [WSJ]
Much like auditor independence, you can easily make the case that director independence is a bit of a joke. If you're of the opinion that compensation impairs independence, then it's really difficult for anyone to be independent of anything. "Here's a bunch of money, we need you to be independent," sorta feels compromised right from the start, doesn't it? For board directors however, it can be more complicated than just the fees they take home:
John Hennessy, president of Stanford University, has served as an independent director of Google and then its new parent company for 12 years. During that time, the company has given Stanford $24.9 million in donations, scholarships and payments for research services and patent licenses.
Andrew McKenna has been an independent director of McDonald’s Corp. for a quarter century and its chairman for 12 years. He was also the longtime chairman of a family-owned paper-goods company and for a time had a stake in a promotional-items maker, firms that sold a combined $71 million of french-fry bags and other goods to McDonald’s over 22 years.
The best you can hope for, I think, is Matt Levine's suggestion to find some people "who feel more of a fondness for the shareholders than they do for the managers." If only we do the same for auditors.
Ernst & Young's Minneapolis leader will retire; new managing partner named [MBJ]
Mike O'Leary succeeds John Wilgers. The story reports that he's led both the Buffalo and Syracuse offices before moving to Chicago to lead the firm's Internal Audit Risk business before landing in the Twin Cities. Anyone hoping to climb the ladder in a Big 4 firm should expect similar bouncing around.
Accountant Worked One Day, Allegedly Embezzled $15k [GC]
I wrote this late yesterday, about a woman who (allegedly) didn't waste the opportunity to lay the groundwork for fraud.
In other news:
- PwC to buy Polish cloud company
- The Ten Most Downloaded Tax Papers In 2015
- Univision buys The Onion.
- CEOs want more from CFOs.
- Martin Shkreli needs a new legal team.
- "A Chinese study finds people who pay more attention to what's bad about the world also get in more accidents."
- Peak stuff.
Get the Accounting News Roundup in your inbox every morning by signing up here. Thanks!