You may not know this, but McGladrey's British sister from another mister is RSM Tenon. Like most large accounting firms RSM Tenon provides a wide variety of exemplary professional services demanded by the capital markets. Unlike most large accounting firms, however, it has shareholders and is listed on a stock exchange.
Those shareholders get to vote on various things including the appointment of a company's auditor. And just like shareholders in the U.S., when an auditor makes a mistake, U.K. shareholders get pissed. And, at least in this case, U.K. shareholders actually do something about it!
Following a shareholders vote at the firm's annual general meeting today, 64% of shareholders with 72,960,000 shares voted against re-appointing PwC as auditors, compared to the 36% of shareholders with 40,800,000 who voted in favour of the resolution. The move is a culmination of a tense relationship between the PwC and Tenon. In August PwC faced an investigation from the Accountacy [sic] and Actuarial Discipline Board over its audit of Tenon. Reports emerged in April that Tenon had sought legal advice over alleged errors made by PwC in its accounts.
If you take a gander through RSM Tenon's most recent annual report, there's no obvious sign that RSM Tenon is a closely-held, employee owned company, which could result in a rabid anti-PwC bias and thus explaining the dismissal. Nope, this might actually qualify as a shareholder activism towards an auditor's ineptitude. WHO KNEW IT WAS POSSIBLE?
GSI Group Inc. (GSIG) said it reached a settlement with the U.S. Securities and Exchange Commission by consenting to a cease and desist order related to accusations that it improperly recognized revenue on certain transactions at its semiconductor business from at least 2004 through June 2008, partly because of insufficient internal controls. The SEC alleged that as a result, the supplier of precision technology and semiconductor systems had overstated revenue by 0.7% in 2004, 1.4% in 2005, 17% in 2006 and 5% in 2007 and by 13% and 5.6% in the first and second quarters of 2008. The company said it agreed to the settlement without admitting or denying the SEC finding and wasn’t charged with fraud or required to pay any penalties. “GSI fully cooperated with the SEC in its two year investigation and has undertaken a number of corrective actions and internal control enhancements,” said Chief Executive John Roush. [