PwC reports improvement in audit quality [Accounting Today] From last week, but big if true: During the recently completed PCAOB inspection, PwC anticipates that only one of the 52 engagements that were subject to inspection will be included in Part 1.A of the report, the section where audit deficiencies are highlighted. The report also discusses how the firm issued guidance to its audit teams on how to cope with the COVID-19 pandemic, for example, by doing remote inventory observations along with going concern and impairment assessments of clients.
SEC Says It’s Probing Market Mania for Potential Misconduct [Bloomberg] The SEC warned traders about engaging in illegal schemes to drive up share prices and said it was working with other regulators, stock exchanges and federal agencies to “identify and pursue potential wrongdoing,” according to a statement released Friday by acting chair Allison Herren Lee and the agency’s commissioners.
Big Four Cut Back Federal Lobbying Amid Pandemic [Bloomberg Law] The four firms spent a combined $8.7 million in lobbying for federal issues, records show. Like many U.S. companies, the lobbying tab for each declined from 2019—down nearly a quarter (23%) combined—as the pandemic limited in-person contact with lawmakers and regulators from the Federal Reserve to the Securities and Exchange Commission. Ernst & Young LLP posted the single-biggest drop, cutting expenditures nearly in half from a year ago.
Mark Weinberger: ‘I’m Always Optimistic’ [Chief Executive] Not much fazes the former CEO of EY, who joined the boards of J&J, MetLife and Aramco just in time for the triple threat of a global pandemic, social unrest and political upheaval to hit. His take? Business will step up and survive. Here’s how.
EY boss Tony Johnson steps down [Australian Financial Review] Big four consulting firm Ernst & Young will begin a search for a new local boss after CEO Tony Johnson announced he would step down from the role on June 30. During his time as CEO, the firm has almost doubled revenue to $2.1 billion in the 2020 financial year, up from $1.1 billion in the 2014 financial year.
Mattel, PwC Must Face Investor Lawsuit Alleging ‘Cover-Up’ [Bloomberg Law] Mattel Inc. must face a would-be class suit alleging it engaged in a “cover-up” of material misstatements from its 2017 financial results, after a federal judge in California declined to throw out the case. The toymaker’s investors accused it of deceiving them about a financial statement that understated the company’s net loss by at least $109 million. Their allegations are sufficient to keep the case moving along against Mattel and its auditor, PricewaterhouseCoopers LLP, the U.S. District Court for the Central District of California said.
Kyobo denounces Deloitte Anjin for ‘unceasing’ fake report allegation [The Korea Times] Prosecutors are looking into allegations that Deloitte Anjin engaged in “another” accounting fraud by manipulating a corporate value at the request of a client ― Hong Kong-based Affinity Equity Partners ― after the accounting firm faced similar suspicions involving a contract with Samsung. The controversy is centered on the ongoing legal fight between Kyobo Life Insurance and its financial investor the Affinity-led consortium. Prosecutors indicted three Deloitte accountants for allegedly colluding with Affinity to distort the insurer’s estimated pre-initial public offering stock price.
KPMG unveils sustainability-focused ‘Impact Plan’ [Accounting Today] The plan will merge all of KPMG’s ESG goals into one global plan, focused on four main areas: “Planet, People, Prosperity and Governance.” The plan will record its global ESG data and compare it with metrics outlined in Measuring Stakeholder Capitalism, a sustainability report penned by the World Economic Forum and International Business Council.
EY says it will be ‘carbon negative’ by the end of the year – here’s its 7-point plan for getting there [Business Insider] Accounting giant Ernst & Young announced Monday plans to become carbon negative in 2021, “net zero” in 2025 and cut its total emissions by 40% with seven key commitments.
It appears that E&Y got good value from adding Jeanette Franzel, formerly of the PCAOB as a consultant as long as it’s lobbying cost reduction is less than she makes per year.