A deckhand on Captain Jack's ship sent us a copy of an email that will either be heeded begrudgingly or completely ignored:
From: [BDO Chief Technology Officer]
To: [Everyone]
Subject: March Madness…
March Madness means many things to many people. Basketball, spring and snow in Michigan and APT & taxes here at BDO. With that latter in mind, please be considerate of your fellow professionals and refrain from streaming the NCAA basketball tournament. This traffic will have a detrimental effect on Internet speeds which would impact substantially all computer applications being used in the office, including the quality of voice/phone transmissions.
Thank you for your cooperation.
[BDO Chief Technology Officer]
I don't know how anyone else feels, but this is an outright assault on everything that is sacred to Americans in this digital day and age. When back-office C-suite types start infringing on how you spend your bilable hours, it should make you pause. Maybe this is the day you take a stand. Maybe not a public one, but a stand nonetheless.
Well team, despite the little setback for the PCAOB earlier this week, Team Peek is not discouraged. In fact, they were so motivated by the SEC’s little stunt that they thought they’d churn out three major inspection reports today, just to show everyone that they get to say what’s what with these accounting firms (even if it is in an indecipherable combination of vague and wonky prose).
BDO, Grant Thornton and PwC all got their papers issued today, which leaves just KPMG as the last major U.S. firm to not have their report issued. We’ll give you the quick and dirty on these three but if you want the gory details, you’ll have to read them in depth yourself (some o know). We’ll go in alphabetical order so no one gets bent out of shape.
BDO had eight issuers mentioned in its report. Issues included not testing the underlying data used by a specialist, failure to identify a departure from GAAP before issuing its audit report, loan losses and “[failure] to perform sufficient procedures to evaluate the reasonableness of a significant assumption management used to calculate the gain on the sale of a business,” among others.
GT only had five issuers listed in their report with problems including two instances of departures from GAAP that weren’t identified before the issue of the audit report, testwork related to fair value determination of illiquid assets and testwork around revenue recognition. Steve Chipman got away from the teleprompter long enough to sign the letter to the PCAOB himself, along with Trent Gazzaway, the National Managing Partner of Audit Services.
Nine issuers were noted by the inspectors for P. Dubs. Various issues ranging from inadequate testing of foreign locations, loan loss issues (that’s a given) and fair value (another surprise). PwC’s response made it sound like they actually enjoy the whole inspection process, “We continue to support the PCAOB and we wish to convey our sincere appreciation for the professional efforts of the PCAOB staff.” Wonder if the engagement teams that were inspected feel the same?
