When accounting goes unaccounted for
Here’s a fun one from Fishbowl today:
Thankfully someone pointed out how bizarre it is for someone to have worked at Big 4, a small firm, and GT, BDO, and RSM. OP clarified that they only worked for Grant Thornton — which they called “awful and primitive” — and lumped similar size firms together as an example of the type of firm they had experience working for.
The comments were disappointingly tame and lacking elitism of any kind.
What’s so elite about Big4? [Fishbowl]
OK guys, things are starting to get good in the David Middendorf trial. We now […]
Over the last 20 years or so, for one reason or another, accounting firms that were able to provide audit services to largest companies on Earth have been whittled down from 8 to 6 to 5 to 4. During this time, it became the concern of many (read: anyone not in the “Big” club) that the firms were too concentrated and audit quality was deteriorating due to the lack of competition.
Naturally, the firms at the top have dismissed this argument as bupkis. And because the public accounting industry is one that elected representatives and their constituents could give a rat crap about, the cries of the less fortunate firms have gone unheard.
Until recently that is. A report this summer that revealed the existence of “Big Four clauses” in credit agreements in the UK and that allowed the Grant Thorntons and BDOs of the world to have their “A-HA!” moment.
Deloitte, however, is not impressed with revelation and would like everyone to know that the audit biz is regular dog fight:
The audit market is “fiercely competitive and transparent” according to Big Four firm Deloitte, which sees no reason to open the top-heavy industry to greater competition.
Deloitte believes audit quality is “higher than ever” and said it has seen “no evidence of anti-competitive behaviour”, according to its submission to the upcoming House of Lords inquiry into audit competition.
“Our experience is that the listed-company audit market is one of the most competitive,” the firm said.
“The firm” presumably said this with a straight face.
Audit market is “fiercely competitive” Deloitte argue [Accountancy Age]
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It is not entirely true. I know of former Big4 excutives that are humble and kind. The part that they get paid the most is not true either–it’s a corporate world/capitalist world out there!
To the guy who said, “we get paid the most.” Lol, that’s not really true. I worked in a local firm literally across the street from KPMG and the late AA. Our guys K-1s were twice what theirs were and we had no shortage of their trash applying for jobs. Not factoring in the whipping AA took when capital accounts disappeared or the hefty fines they paid. We had the last laugh when they were walking out of the building, boxes in hand. EY just paid $100 million for their latest shenanigans, that’s got to hit those K-1s. Now we see headlines literally everyday like, “KPMG singled out for declining audit quality.” Or, “Declining in quality’: auditors face scrutiny over string of scandals.” KPMG’s report on GE, “PWC probably did celebrate when it helped Mattel cover up an accounting error.” “PWC would appreciate it if staff would stop getting drunk in the office.” Etc, etc, etc. What about that audit report EY did on Lehman Bros? There is something to be proud of. These guys haven’t produced a product worth a crap in years. Big four people remind me of really religious people. If you have to tell people you are something, you’re probably not.
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