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October 1, 2023

Accounting News Roundup: Uncertainty in Greece; Auditor Doubts in China; Phony GPAs at Baruch | 06.18.12

Markets Relief Fades at Greek Election Results [NYT]
Early market relief at the future of the euro zone turned to negativity Monday, as stocks and the euro retreated and Spain’s borrowing costs pushed above the 7 percent barrier, seen by many as unsustainably high. European and Asian markets opened immediately higher Monday after the Greek legislative election Sunday handed victory to a center-right party, New Democracy, that supports Greece staying in the currency union. That had eased fears that the country will leave the euro and unleash further turmoil on the beleaguered single currency.

Hong Kong auditors battle against criminal liability law [Reuters]
Auditors in Hong Kong are mounting an increasingly vocal campaign against a proposed new law that would make them face criminal sanctions for shoddy audit work. The city's lawmakers are in the final stages of considering the new Companies Bill, which includes a clause that would make auditors criminally liable if they knowingly or recklessly omit a required statement from an audit report. The clause, which has the backing of the city's stock market regulator, aims to put more onus on auditors' responsibilities to ensure investors can rely on companies' financial statements. Similar rules already exist in the UK, while in the United States there is an independent statutory body, the Public Company Accounting Oversight Board, to keep auditors in check. In Hong Kong the profession is self-regulating, and has faced accusations that in some instances it has not always been tough enough on reckless auditors.

Can U.S. and China Avert Accounting Armageddon? [An American Perspective in China/Patrick Chovanec]
China and the U.S. appear to be an a collision course over accounting.  That’s a lot more serious than it sounds.  By the end of this year, unless a compromise can be reached, there is a very real chance that U.S. securities regulators may end up employing the “nuclear option”:  forcibly delisting every Chinese company currently listed on a U.S. stock exchange — such as Sinopec,, China Life, and China Unicom.   It’s a potential catastrophe-in-the-making that few investors or politicians have given any serious thought to.

If diplomacy fails, what's next? [China Accounting Blog/Paul Gillis]
The PCAOB faces a December deadline to complete inspections of Chinese accounting firms that are registered with the PCAOB. It seems highly unlikely that they will meet this deadline, since Chinese regulators will not let them come to China. While the PCAOB could extend the deadline, they have already been under political pressure to act. In this election year, where China bashing might become a tool for either party, it seems unlikely an extension will be well received. The argument that Chinese companies that want to access U.S. capital markets must follow U.S. laws resonates with most people. Without resolution, the only meaningful option for the SEC, and the PCAOB, is for the PCAOB to deregister the firms and for the SEC to ban them from practice before the SEC.

CUNY biz school fixed Wall Streeters' GPAs to keep receiving tuition: sources [NYP]
An administrator at Baruch College’s prestigious Zicklin School of Business forged professors’ names to raise the grade point averages of students seeking master’s degrees to become dealmakers and corporate leaders, The Post has learned. An internal CUNY probe found the course grades of “approximately 15 students” were falsified to keep their GPAs high enough to stay in the programs, Baruch officials acknowledged. The trickery prevented enrollees, including many mid-level Wall Streeters whose firms picked up their tabs, from flunking out — and kept their fat tuition checks flowing in.

Pervy Perp Again Busted For Sex With Teddy Bear [TSG]

Charles Marshall, 28, was arrested Wednesday evening after employees at a health clinic spotted him pleasuring himself in an alley. Marshall, pictured in the adjacent mug shot, was cited for disorderly conduct. Municipal Court records show that Marshall has already been convicted three times of engaging in public indecency/disorderly conduct with a teddy bear. The misdemeanor counts resulted in short jail sentences and small fines for Marshall.


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