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November 26, 2022

Dear PCAOB, Are You For F&^$ing Real?!

morans.jpgMaybe the problem here is not that the audits are not being performed correctly but that the PCAOB has no idea what it’s doing in the first place.
Continued, after the jump


WebCPA:

Many accounting firms are doing a good job of following new standards for conducting risk-based audits of internal controls, but others are not applying the standards properly, according to a new report by the Public Company Accounting Oversight Board.
The PCAOB examined portions of approximately 250 audits of internal control over financial reporting by the eight largest domestic registered firms in 2007 and 2008. The report assesses the first year of implementation of the risk-based Auditing Standard No. 5.

Listen, internal control isn’t like sex education, you can’t just say “listen, kids, be careful out there lest you end up with a funny rash on your cash flows” and leave a jar of condoms on the desk hoping management uses them. How does the PCAOB hope to be taken seriously when it slashes the minnows to death and leaves the sharks patrolling the waters for oblivious swimmers?
Case in point, in late 2008, GM settled with shareholders to the tune of $277 million for “accounting irregularities” (gee, this sounds familiar), and presumably for shits and giggles, Deloitte tossed another $26 million in there since, you know, as auditors they should have caught said irregularities. Irregularities? More like blatant fraud. But GM trudged on and ended up costing the American taxpayer $23 billion, most of which we shouldn’t expect to see any time soon, if ever. Would Deloitte like to kick in a few billion for that, perhaps?
The PCAOB should have stormed Deloitte and shook the auditors like crying babies until they confessed their sins at the regulatory pulpit. Instead they are going after puny firms and levying increased fees against them in the name of compliance – compliance! Compliance with what? Isn’t it criminal for the PCAOB to turn the other cheek? Compliance?! I’m not sure where the PCAOB comes from but where I come from, we call that being in cahoots. In some courts, it might be considered accessory to the crime but who the hell am I to judge?
So while the PCAOB is busy deciding whether or not it’s appropriate to require an auditing partner to sign off on audits (thereby invalidating the entire purpose of an audit committee in the first place), the blatant criminal behavior continues and no one seems to be minding the store, not even the guy who refills the condom jar.

morans.jpgMaybe the problem here is not that the audits are not being performed correctly but that the PCAOB has no idea what it’s doing in the first place.
Continued, after the jump


WebCPA:

Many accounting firms are doing a good job of following new standards for conducting risk-based audits of internal controls, but others are not applying the standards properly, according to a new report by the Public Company Accounting Oversight Board.
The PCAOB examined portions of approximately 250 audits of internal control over financial reporting by the eight largest domestic registered firms in 2007 and 2008. The report assesses the first year of implementation of the risk-based Auditing Standard No. 5.

Listen, internal control isn’t like sex education, you can’t just say “listen, kids, be careful out there lest you end up with a funny rash on your cash flows” and leave a jar of condoms on the desk hoping management uses them. How does the PCAOB hope to be taken seriously when it slashes the minnows to death and leaves the sharks patrolling the waters for oblivious swimmers?
Case in point, in late 2008, GM settled with shareholders to the tune of $277 million for “accounting irregularities” (gee, this sounds familiar), and presumably for shits and giggles, Deloitte tossed another $26 million in there since, you know, as auditors they should have caught said irregularities. Irregularities? More like blatant fraud. But GM trudged on and ended up costing the American taxpayer $23 billion, most of which we shouldn’t expect to see any time soon, if ever. Would Deloitte like to kick in a few billion for that, perhaps?
The PCAOB should have stormed Deloitte and shook the auditors like crying babies until they confessed their sins at the regulatory pulpit. Instead they are going after puny firms and levying increased fees against them in the name of compliance – compliance! Compliance with what? Isn’t it criminal for the PCAOB to turn the other cheek? Compliance?! I’m not sure where the PCAOB comes from but where I come from, we call that being in cahoots. In some courts, it might be considered accessory to the crime but who the hell am I to judge?
So while the PCAOB is busy deciding whether or not it’s appropriate to require an auditing partner to sign off on audits (thereby invalidating the entire purpose of an audit committee in the first place), the blatant criminal behavior continues and no one seems to be minding the store, not even the guy who refills the condom jar.

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Are Today’s Accountants Already Occupying Wall Street?

Caleb and I had a talk last night and it made me think about this whole Occupy Wall Street thing. More importantly, it made me think about what I am and am not doing to support it. I haven’t been to a rally, even to take pictures (last time I tried to do that, I was the only one out in front of the Federal Reserve Board at 6 in the morning except for the lone Fed cop patrolling the perimeter).

I get that people are pissed off. I’m pissed off too. I’ve been pissed off, don’t tell me about being pissed off. I was lugging around aFed sign made on top of “Ron Paul ’08” acrylic three years ago, you don’t have to tell me about being pissed off. (Here I am in 2009 on SF Citizen in a “Bernanke 00%” t-shirt at an anti-Iraq war rally)

And I get that for some people, all there is to do is go downtown with a drum and some poorly-written signs on cardboard ripped from your mom’s Costco packages in the recycle bin. That’s totally fine, everyone has their own way of sticking it to the man.

For a lot of Going Concern readers, sticking it to the man means showing up every day in business casual pretending to give a fuck about COSO but actually knowing that it’s all a lie. They work you to the bone until you leave or submit and get promoted to manager. Partner if you’re lucky. Run on that hamster wheel, here have this bonus, keep going and one day you can beat your own subordinates into submission. Go, go, go… Many of you get that this is bullshit but keep showing up every day anyway, and to me, you are your own special kind of protester. Same as last year, motherfucker, it’s the ultimate form of rebellion.

Too much?


Point being, everyone has their own way of screwing the establishment. Francine does it railing against the Big 4. Bill Sheridan and Tom Hood do it at the MACPA with professionalism. Tom Selling does it by riling up fellow academics. Professor Dave Albrecht does it by being seen in public canoodling with known incendiaries like yours truly.

I do it by ripping on the IASB as often as I am allowed to, infiltrating the Hill to sniff out what’s the latest in CPA lobbying efforts and getting in as many F bombs as I can on the dry subject of accounting. That’s all I can do. I can’t abandon my day job to hang out in Manhattan eating vegan paninis. I can make and distribute offensive Bernanke fridge magnets.

I completely understand why people are attracted to Occupy Wall Street; the part I’m struggling with is why so many of the 99 Percenters seem obsessed with this thing called “fairness” that does not, in fact, exist. Is it fair that any of us have to drag our asses to work every day and do what we do? Is it fair that Becker costs $3,000 and doesn’t pass the CPA exam for you? Is it fair that many of you are drowning in student loan debt and seemingly forced to get Master’s degrees just to work in your field? Is it fair that Caleb gets listed in all the accounting publications and I’m stuck as the sidekick hack who always manages to piss people off? This world is unfair, sorry to be the bearer of bad news. I have to write about accounting every day of my life, it’s un-fucking-fair, we get it.

In my view (for whatever that is worth, which is probably not more than our company pays me to write this post), the ultimate rebellion is assimilating and infiltrating the establishment to enact real change from the inside. Are partners scared as shit of this website? Yes. If they’re threatening you with termination if you even dare to write us for advice, we’re doing something right. And I didn’t even have to not shave my armpits to accomplish that (but Caleb probably shaved his).

Are any of you going to independently revolutionize the accounting industry? Probably not. But collectively, you have scared the pants off of lazy ass recruiters and partners across this country who thought you didn’t have it in you. They read us because they feel like they have to or else they’ll lose touch with what you guys are thinking, and it scares the living shit out of them. In my mind, that’s a far more effective message to send the The Establishment, whoever the hell they are.

I fully support the fundamental sentiment of Occupy Wall Street but much prefer fulfilling my incendiary duties here trying to get accounting kids riled up and questioning why they put up with the shit they do. Working mothers in public accounting should be allowed to have children. Interns should be allowed to ask questions (even dumb ones). Auditors should be expected to question last year’s logic. It’s not complicated but it’s important work that a lot of you do, and I hope that you get that.

It is not your fault that we’re here. Many of you just followed the rules.

Thanks for letting me be a part of that. Beats standing around with a fucking sign, that’s for sure.

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