Please ensure Javascript is enabled for purposes of website accessibility
September 30, 2023

Accounting News Roundup: Substantial Doubt About Sears and PwC Settles | 03.23.17

pwc hna

I sincerely hope PwC’s lawyers gave MF Global the right envelope.

Substantial doubt

Going concern opinions are pretty rare, but rarer still is a going concern opinion from a company’s management but not one from the auditor. Francine McKenna reports at MarketWatch that that’s exactly what happened with Sears Holdings and Deloitte yesterday, explaining the background:

Deloitte’s willingness to issue an audit opinion that does not mention any going-concern issue may just be a difference of opinion with Sears executives. The company may want to be more conservative about whether or not it can make it through the next twelve months.

Alternatively, Deloitte may have been unable or unwilling to evaluate the impact of plans the company cited that were initiated after Jan. 28, its cutoff, such as a restructuring program targeted to deliver at least $1 billion in annualized cost savings in 2017, an amendment to an existing domestic credit facility or $100 million in commercial paper issued to meet short-term liquidity needs.

That Sears took a different line owes to a rule change in Aug. 2014, when accounting standard setters issued a new mandate requiring company executives to also assess whether conditions or events, considered as a whole, raise substantial doubt about a company’s viability within one year after the financial statements are issued.

Isn’t it a little odd that Sears management came to a more conservative conclusion than Deloitte? If Sears is just employing some reverse psychology on themselves (“I doubt this is going to work, guys.”) is Deloitte just calling BS on them? That seems…strange? Or if Deloitte is “unable or unwilling to evaluate the impact of plans” that means they think Sears could survive the next 12 months if they simply did nothing different? I’m fascinated and confused all at the same time.

PwC on trial

If you had March 23rd as the settlement date in your MF Global/PwC trial pool, then you are a winner. A spokesman for the plaintiffs has informed Going Concern that “the matter has been settled to the mutual satisfaction of the parties.” As has become custom in these situations, the settlement amount is secret. Stay tuned for more.


If you still haven’t gotten your fill of political grandstanding this year, Donald Trump’s nominee to chair the SEC, Jay Clayton, has his confirmation hearing today.

Brought to you by Accountingfly

Beech Valley Solutions has immediate need for a CPA in Chicago.

Previously, on Going Concern…

I wrote about robot auditors. In Open Items, someone is asking about The Siegfried Group.

In other news:

Get the Accounting News Roundup in your inbox every weekday by signing up here.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

Funny white cat-an athlete in a yellow sports headband, lying with yellow footballs, dumbbells and a yellow alarm clock standing nearby.

Monday Morning Accounting News Brief: PwC Is Turning Work Down?; TIL the President of Nigeria Worked at Deloitte | 9.11.23

Yay it’s Monday again! Praise Pacioli, there’s actually some stuff going on this morning. Meet a 29-year-old accountant whose ‘resentment’ only climbed after her firm raised her salary from $60k to $90k as she made millions for them. She has her own firm now: Stephanie Heredia’s promotion came a year too late and more than […]

Tuesday Morning Accounting News Brief: Getting Roofied at KPMG?; PwC: ‘Burnout Should Be a Concern’ | 9.5.23

Good morning and happy Tuesday. Hope everyone had a nice Labor Day, I had a productive weekend of being AFK at Meat Week (get your minds out of the gutter, it’s Fallout). Let’s get right into it. It is suspected someone spiked a colleague’s drink at a KPMG NZ get together, it isn’t the first […]