KPMG's inspection report
The PCAOB released its inspection report of KPMG for 2015 yesterday and, sorry to say, it was the worst-performing Big 4 firm of the cycle with a deficiency rate of 38 percent. (Full disclosure: I used to work at KPMG and I'm not sorry to say it.) Compliance Week has the full rundown on the performance of all the Big 4: 3) EY: 29%; 2) Deloitte: 24%; 1) PwC: 22%. But in an interesting twist, PwC's rate is made much worse by the fact that "half of the blown audits called out by inspectors ultimately led to restatements either of the financial statements or the internal control audit opinion." So I guess this is a Pyrrhic victory for PwC? Anyway, here's to one firm — any firm! — breaking the 20% barrier for their 2016 inspections.
Although SEC Chief Accountant Wesley Crusher, uh, I mean, Bricker doesn't see IFRS usurping US GAAP any time soon, IASB Chairman Hans Hoogervorst isn't discouraged by all the anti-globalism going around:
Hoogervorst acknowledged that it’s possible that the longtime trend toward growing global investment and trade may be interrupted following the recent political developments. But he said that even if cross-border transactions are reduced, the rationale for common accounting standards is strong as multinational corporations continue to do business and investors keep seeking investment opportunities across the world.
“While the U.K. has decided to leave the EU, it has not yet decided to leave the world,” Hoogervorst said and I can't wait to see how he's proven wrong.
Adventures in non-GAAP accounting
Tatyana Shumsky reports that the SEC's enforcement division is looking closely at companies use of non-GAAP metrics. The division's chief accountant Michael Maloney cited the REIT formerly known as American Realty Capital Properties Inc. as an example due to its "pure falsification of an important non-GAAP measure." In other words, don't customize those custom numbers too much.
Previously, Going Concern…
Megan Lewczyk wrote about a nightmare for IT auditors.
In other news:
- SCOTUS tossed the $400 milllion in damages Samsung was due to pay Apple.
- Joe Kristan has insights on how to have one of the top 400 tax returns in terms of AGI.
- Wells Fargo Killing Sham Account Suits by Using Arbitration
- There are no accounting firms on Glassdoor's Best 50 Places to Work
- $10 coffee.
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