The BBC reported last week that 49% of workers in the UK would leave their jobs if it meant working for someone that didn’t make bad decisions.
As we’ve noted, the Brits seem to be less hung up on money than us but that still doesn’t mean you wouldn’t leave for less money if you could get away from that boss who can fuck up a cup of coffee not to mention every decision that affects your work directly.
So we have a simple question for you. Under normal circumstances, would you leave your high paying job if it meant you didn’t have to work for an idiot boss?
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CFO Confession: HealthSouth Edition
It might be a fair statement that we like to talk a little trash here at Going Concern. We do our best to embrace our natural inclination. However, every once in awhile we try to spread some positive news.
Today’s attempt at a positive story comes courtesy of Aaron Beam, a former CFO at HealthSouth. Beam was CFO at HealthSouth when the fraud first began in 1996. Beam describes his decision to make the numbers up this way, “one night, during the second quarter of ’96, I said, ‘OK, let’s do it,’ and we credited revenue that did not exist and we debited assets that did not exist.”
Not exactly the most sophisticated fraud in the world but whatevs. The Street and Richard Scrushy demanded results.
And so it went, until Beam left in 1997. HealthSouth continued to commit accounting fraud until 2002 when it imploded. Beam testified against “Hannibal Lecter” Scrushy but the slimeball walked on the criminal charges only to be found liable for damages to the tidy sum of a shade under $2.9 Billion.
As for Beam, he spent 3 months in a non-FPMITA prison and now speaks to business students around the country about ethics and has a lawn-service business.
I’m trying to turn a big negative into a positive, because there is such a need for ethics in the business world today, and I’m in a unique position to talk about it. If we can teach college students that they’re going to face these kinds of temptations every day in the business world, we can make a difference.
WTG man, and hey, we’re being serious.
“I Should Have Said No.” [CFO.com]
Do You See What Happens?
The PCAOB was kind enough to issue a couple of examples this week of what happens when you don’t take your role as auditor seriously.
We wouldn’t dream of putting them both in one post so we’ll give you one in the morning to ponder and save the second for later right about the time you’re ready to flip out, so hang in there.
We’ve also done you the courtesy of reading (sort of) both of the orders so that you can remain fully chargeable (not counting the time you take to read this post of course):
Thomas Linden was a partner in the Chicago office of Deloitte and lead engagement partner on Navistar Financial Corporation (NFC). At the 11th hour, prior to filing the fiscal year 2003 10-K, the engagement team realized that assets, revenues, and net profits were overstated by $19.7 million.
Check out the rest, after the jump
Having a typical over-confident management team, NFC had already taken the liberty of announcing the fourth quarter earnings prior to filing the 10-K.
Because Tom Linden was a Big 4 Partner and thus impervious to any challenge he encounterd, he took the following action (all our emphasis):
• Initiated an increase of approximately 50 percent in Deloitte’s planned tolerance for misstatements in NFC’s reported financial results
• Authored, with the assistance of a member of the NFC engagement team, an NFC auditwork paper that inaccurately characterized the reasons for and circumstances surrounding the increase
• Failed to evaluate adequately the risk that NIC’s financial statements were materially misstated due to error or fraud
• Otherwise failed to act with the requisite due professional care and professional skepticism
Okay, so the last two are boring but the first two kinda, sorta give us this impression of what happened:
Dude finds out the numbers are bunk, client isn’t cool with telling their analysts (who NFC told that they had a kick ass quarter) that said numbers are bunk, so Dude up and decides to ABBACADABRA make the tolerance for misstatement 50% higher than it was for the entire audit (read: that’s a lot).
Then, after probably putting the proverbial (or possibly literal) gun to head of the “member of the NFC engagement team”, they wrote a workpaper that supposedly explained why the tolerance was all of sudden 50% higher but the rationale was something to the effect of “because we said so”.
So for all that tomfoolery (snap!), Linden gets fined $75,000 and can’t be associated with a registered accounting firm for two years and which point he can petition to be to be reinstated. Yow-za. To better times, Tom.
ORDER MAKING FINDINGS AND IMPOSING SANCTIONS In the Matter of Thomas J. Linden, CPA, Respondent. [PCAOB]
Lehman Working to Pay Off Debt, One Tchotchke at a Time
In a couple months it will be at the one year anniversary of the collapse Lehman Brothers. In order to catch you up on the firm’s progess in paying off the $250 billion in debt owed to creditors, we proudly present The Lehman Store, courtesy of eBay.
So far the Lehman Store has 100% positive feedback with comments such as: “Great Lehman tie and excellent delivery time.” and “A+ SELLER”.
Lehman couldn’t be more pleased, “‘We are really excited to be able to offer this to the public because there is a demand,’ said Lehman spokeswoman Kimberly Macleod in a telephone interview.”
“There is a demand“, people. And since there are currently 66 items on the auction block, you’d better get on this, PRONTO.
Lehman Holds EBay Garage Sale, Hawking Trinkets to Pay Off Debt [Bloomberg]