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Big 4 Firms Regularly Caught Cheating Worried ChatGPT Will Help Applicants Cheat

Posted on by Adrienne Gonzalez
a warning sign, red background with white text, NO

Per The Telegraph, Big 4 firms across the pond are now “banning” applicants from using ChatGPT and its equivalents to help with applications because they’re afraid AI tools “will help them cheat the system.” The irony.

Big Four accountants have warned applicants not to use AI to complete applications or online assessments during the hiring process.

Job hunters applying to KPMG and Deloitte must now confirm they have finished online tests without external tools such as AI.

PwC said it is reviewing applications to check for activity, which “undermines the integrity” of its recruitment operation and will take action against rule breakers.

God forbid college students undermine the integrity of PwC by asking ChatGPT to draft a cover letter.

It’s not just the biggest of the big firms either. BDO, which is the fifth largest firm in the UK, has “strictly prohibited” the use of AI by prospective new hires.

The mid-tier accounting firm, which hired nearly 600 trainees last year, has installed plagiarism checkers that review phrases and paragraphs and cross checks them against typical AI responses.

Ah yes, the historically reliable AI detectors. Even ChatGPT’s owner warns against relying on those:

OpenAI, the company behind ChatGPT, shut down its own AI detector in July after finding it had a “low rate of accuracy.” In a post on its website, OpenAI said “none” of the AI detection options, including its own, “have proven to reliably distinguish between AI-generated and human-generated content.”

OpenAI said it has incorporated feedback and is researching more effective techniques to identify text, audio, and images generated by AI. For now, however, teachers are left with limited options.

Just as students shouldn’t overly rely on AI chatbots to do their schoolwork, teachers also shouldn’t let automated services act as judge, jury, and executioner for a student’s work.

“Universities Rethink Using AI Writing Detectors to Vet Students’ Work,” Bloomberg September 21, 2023

“Any violation of our assessment policy, including the use of unauthorized tools, will result in the disqualification of the assessment and potential removal from the hiring process,” said BDO.

According to a recent report, Big 4 firms have dramatically cut their job posting numbers in the past year from 1,996 in 2022 to 764 in 2023, a 62 percent decrease. Across all accounting firms in the UK this decrease is closer to 23 percent, still a significant decline considering demand.

So sadly it does appear they have the upper hand over there and can institute petty policies like these.

Big Four accountants ban grads from using AI to write job applications [The Telegraph]

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Ernst & Young Pays $8.5 Million to Settle Charges with SEC Over Bally Fraud

Thumbnail image for ey8ball.jpgSix current and former partners at Ernst & Young were charged, along with the firm, by the SEC late yesterday in relation to the audits the firm performed of Bally Total Fitness’ financial statements from 2001 to 2003.
Bally settled accounting fraud charges with the SEC in 2008 that were related to its financial statements from 1997 to 2003.
Because everyone and their dog was freaking out over Enron in screws to their clients to follow GAAP, E&Y had identified Bally as “one of E&Y’s riskiest 18 accounts and as the riskiest account in the Lake Michigan Area.”


Floyd Norris:

The firm forced Bally to stop recording revenue in an improper manner that allowed it to claim earnings earlier than was allowed by accounting rules.
But in doing that, the firm allowed Bally to not admit to having violated the rules in the past, an action that would have forced it to restate its accounts and admit that losses in previous years had been much larger.

Mr. Norris also reported that a source of his at the SEC has stated that “he knew of no previous enforcement cases in which a partner of a major firm was cited for his actions as head of a national office.”
The partner in this case is Randy G. Fletchall, the partner in charge of E&Y’s National Office. He along with Mark V. Sever, E&Y’s National Director of Area Professional Practice, and Kenneth W. Peterson, the Professional Practice Director for the Lake Michigan Area office are the current E&Y partners who settled the charges with the SEC.
The former partners include: Thomas D. Vogelsinger, the Area Managing Partner for E&Y’s Lake Michigan Area through October 2003, William J. Carpenter, the E&Y engagement partner for the 2003 audit, and John M. Kiss, the E&Y engagement partner for the 2001 and 2002 audits.
While the news of a current partner of such lofty heights is notable, an extra twist that isn’t being reported in the MSM comes from GC contributor, Francine McKenna, who tells us that Mr. Fletchall served as the former AICPA Chairman from 2007-2008 and Mr. Sever, a former chairman of the Accounting Standards Executive Committee:

What none of the stories that just hit tell you, though, is that at least two of the EY partners charged, Fletchall and Sever, held leadership positions with the AICPA in the past.
…
Did Mr. Fletchall get off with a slap on the wrist given his AICPA leadership position, AICPA PAC contributions and significant campaign contributions to Senator Christopher Dodd? Mr. Fletchall is used to telling the SEC what it should do. Quite used to it.

These are interesting questions that the SEC probably doesn’t want to address. The connection, in appearance, is shady and we can only speculate as to what happened during the negotiations of the settlement.
The Commission, remaining stoic, gave a standard issue boilerplate statement, saying:

“It is deeply disconcerting that partners, even at the highest levels of E&Y, failed to fulfill their basic obligations to the investing public by not conducting proper audits. This case is a sharp reminder to outside auditors that they must carry out their duties with due diligence. The $8.5 million settlement, one of the highest ever paid by an accounting firm, reflects the seriousness of their misconduct,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.

So it appears E&Y is getting sent to their room here, despite the $8.5 million fine being “one of the highest ever paid by an accounting firm.”
The firm also agreed “to undertake measures to correct policies and practices relating to its violations, and agreed to cease and desist from violations of the securities laws.”
Were the AICPA connections enough to keep them out of really hot water? At the very least, it didn’t hurt anything. If you have any information regarding this story, get in touch with us, and we will update you with any developments.
SEC Charges Ernst & Young and Six Partners for Roles in Accounting Violations at Bally Total Fitness [SEC Press Release]
EY Settles SEC Charges Re: Bally’s Fraud-Lives To Audit Another Day [Re: The Auditors]
Ernst to Pay the S.E.C. $8.5 Million [Floyd Norris/NYT]

Turnover at Deloitte Must Be Pretty Bad If They’re Trying to Recruit People They Kicked to the Curb a Year Ago

A screenshot of a LinkedIn post by an ex-Deloitte employee made its way to our […]

KPMG Global Revenue Drops 11.4%

Thumbnail image for Thumbnail image for Thumbnail image for PomeranianSP1324.jpgThe wait is over Klynveldians. Your firm’s revenue results are out and — not to put fine a point on it — they’re disappointing.

The press release has the typical spin that we’ve come to expect from the Big 4 bigiwigs as Tim Flynn focuses on the, ‘high growth markets’ and the opportunities that arise out of ‘a markedly changed regulatory environment’ (code for: “Democrats are in power”).

These “opportunities” are noted but the numbers speak for themselves. As Big Four Blog notes, “A drop in revenue was expected, the surprise was the magnitude of the drop, which was higher than other Big4 firms.”


From the press release:

KPMG, the global network of professional service firms providing Audit, Tax and Advisory services, today announced member firm combined revenues totaling US$20.11 billion for the fiscal year ending September 30, 2009, versus US$22.69 billion for the prior fiscal year, representing an 11.4 percent decline in U.S. dollars.

“While overall revenue results for the 2009 fiscal year reflected the global economic downturn, we were pleased that our continued investments in high growth markets resulted in continued growth in those country member firms,” said Timothy P. Flynn, Chairman of KPMG International.

The drop in revenues breaks down like this:

• Audit – $9.95 billion in FY09 versus $10.69 billion in FY08, a 6.9% decline in U.S. dollars.

• Advisory – Revenues of $6.07 billion in FY09, versus $7.27 billion in FY08, a 16.6% decline in U.S. dollars.

• Tax – $4.09 billion in FY09 compared with $4.73 billion in FY08, a 13.4% decline in U.S. dollars.

The numbers certainly speak to the tough year that KPMG professionals have witnessed through many rounds of layoffs and several shake-ups that appear to be part of major restructuring in the U.S.
So now that the 2009 earnings season has come to a close, all the firms can focus on making 2010 less crappy. That should be breeze. We shall see. If you’ve got thoughts on the Radio Station’s year, or want to talk about how psyched you are for 2010, discuss in the comments.

KPMG reports 2009 revenues of US$20.1 billion [Press Release]

See also: KPMG 2009 Revenues of $20 B Drop 11%, Most Among Big Four Firms [The Big Four Blog]