Please ensure Javascript is enabled for purposes of website accessibility
September 28, 2023

Accounting News Roundup: What If the Big 4 Aren’t Too Few to Fail?; Deloitte Takes Another Hit; Opposition to More Detailed Audit Reports | 12.13.13

What would happen if the Big Four became the Big Three? [Capital Ideas]
Francine McKenna writes about a study from the University of Chicago's Joseph Gerakos and Chad Syverson that estimates the cost of a major accounting firm failure. "The researchers conclude that another failure would cost the US clients of the disappearing firm at least $1.2 billion–$1.8 billion per year in lost “consumer surplus.” That describes the net value lost by a company when forced to switch auditors, and the value a company places (if any) on an extended relationship with its audit firm." FM also writes, citing a calculation by Jim Peterson, that the "breakup threshold" for a global firm could be as low as $2.2 billion and as low as $675 million for a U.S. firm. This makes Gerakos and Syverson's study, she writes, "a lot less like theory, and more like preparation."

AmTrust Falls as GeoInvesting Challenges Accounting [Bloomberg]
GeoInvesting believes AmTrust is "taking advantage of discrepancies in U.S. and Luxembourg accounting practices to minimize losses" as well as "'assigning unrealistically high valuations to life-settlement contracts" and the company's stock price was crushed as a result. Jon Weil is a little perplexed by the situation since the individual author of the report isn't even known, but whatevs, it's still a good read.  

Problems hinder site Deloitte made in Fla. [BG]
The Boston Globe continues looking under every single rock for anything it can find on Deloitte. "Deloitte Consulting was fined $1.5 million this week by Florida labor officials after numerous problems in a new unemployment benefits system it created for the state, similar to the one Deloitte unveiled this summer in Massachusetts. Both systems have been riddled with technical glitches that left some unemployed people without benefits and unable to pay bills." 

Getting to Yes on Tax Reform [Bloomberg]
I don't recommend reading this if you're tax reform optimist.

Robust Auditor Reports Lure Investors: PCAOB Audit Chief [CFO]
HOWEVAH! CFOs, like Carol Tomé of Home Depot, are less convinced that auditors have any value to add: "[Auditors are] not well suited to independently report information about the company beyond what is required to be disclosed by management under GAAP and [Securities and Exchange Commission] regulations."

Bring Drunken Santas Under Control [NYT]
Down with SantaCon, says guy.

Rescuers Near Icy Pond Find Naked Checotah Man Inside Guitar Case [Newson6 via Gawker]
An impressive display of both survival and stupidity: "Police say [Zackery] Aders was trying to walk 26 miles from Gore to Checotah in brutally cold conditions to see a woman. But he got lost, fell through the ice on a pond or creek, and spent 24 hours disoriented, wet and cold in the woods." After he fell in the pond he stripped off his clothes and got himself into the guitar case where he as found by a man working nearby.

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.

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 […]