PwC Partner At MF Global Has Long, And Mixed, Track Record [Forbes]
Francine McKenna provides Exhibit A for why the PCAOB should require firms to name the audit partners for their public company clients: "When the PCAOB, the audit industry regulator, says investors should know the career histories of the partners who lead public company audits, believe it. The career history of the MF Global lead audit partner, PricewaterhouseCooper’s Linda McGowan, sheds considerable light on why she, and her team, might have missed poor controls over risky sovereign debt trades, MF Global’s inability to manage its liquidity, the alleged illegal actions that led to the misappropriation of $1.6 billion in customer funds for proprietary trading, and material misstatements in regulatory reports that bought time until bankruptcy on October 31, 2011 was a fait accompli."
Schumer Urges U.S. to Press China on Accounting [WSJ]
A U.S. senator has urged the Obama administration to press China for more cooperation on accounting-fraud investigations involving Chinese companies that are traded on U.S. exchanges. Sen. Charles Schumer (D., N.Y.) in a letter sent Thursday to Treasury Secretary Jacob Lew urged the administration to "ensure this issue receives serious consideration" during an upcoming U.S.-China summit, slated to begin Friday. In the letter, which was reviewed by The Wall Street Journal, Sen. Schumer said China should allow U.S. inspectors to examine Chinese auditing firms that audit companies trading on U.S. markets and should grant U.S. regulators access to audit information of China-based companies suspected of fraud.
Misfired 2010 email alerted IRS officials in Washington of targeting [Reuters]
A misfired email from a U.S. Internal Revenue Service employee in Cincinnati alerted a number of Washington IRS officials that extra scrutiny was being placed on conservative groups in July 2010, a year earlier than previously acknowledged, according to interviews with IRS workers by congressional investigators. Transcripts of the interviews, reviewed by Reuters on Thursday, provided new details about Washington managers' awareness of the heightened scrutiny applied by front-line IRS agents in Cincinnati to applications for tax-exempt status from conservative groups with words like "Tea Party" in their names.
Former PWC consultant Nicholas Glynatsis jailed for insider trading [Australian]
Glynatsis, of Russell Lea in Sydney, was told by Justice Clifford Hoeben that he will spend the next six months in jail after a previous two-year "Intensive Correction order" was quashed. In late 2011 he pleaded guilty to nine charges of insider trading that reportedly netted him a profit of around $50,000.
Crazy Eddie fraudster says SEC can’t keep up [MW]
"I do not believe that most auditors are adequately trained to find fraud and do battle with fraudsters of my former caliber. Documents don’t commit fraud; the people controlling the documents commit fraud. For example, most auditors are not taught fraud psychology — the behavioral dynamics of fraud. Auditors are rarely taught about emotional manipulation and misdirection used by fraudsters to manipulate their behavior during audits and successfully carry out their crimes. They are unprepared for the psychological games played by fraudsters."
The IRS: It's Bad Enough [Christopher Bergin/Tax Analysts]
" The IRS is seriously and dangerously broken. This is not only unfair to the many dedicated public servants at the IRS; it’s unfair to all of us. Get to the truth. Arbitrarily punishing the IRS isn’t going to help any more than blindly defending the agency. The IRS needs fixing and it needs it now, and that starts with new and strong leadership inside the agency, and a President who is willing to spend the political capital on IRS reform. We don’t have that President. As for the Republicans, they’d rather turn the IRS into Monica Lewinsky."