From the Wall Street Journal: [Emerson Electric CEO David Farr] had just gotten off the phone with KPMG LLC, Emerson’s auditors since 1938, and he was steaming. The problem: It was June and they were still working from home. “Look. I make s—, and you can’t tell me how I’m making s— when you’re sitting […]
That’s the number of companies in the S&P 500 that have used the same Big 4 firm to audit their financial statements for at least the past 100 years, according to a recent Bloomberg analysis. We won’t steal Bloomberg’s thunder by listing those eight cozy relationships. If you want to see who has been in […]
There is no other accounting firm in the U.K. that wants its name mentioned with the Big 4 more than BDO. That firm is like your 7-year-old brother who wants to play street hockey with you and your high school friends after school because he wants to be around and thinks he can compete with […]
From the tipline yesterday: EY just won the NASA audit. Well that’s a pretty nice get for the Black and Yellow. Our source didn’t have much more info to share other than (s)he found out during a Government and Public Sector call on Wednesday and that EY prevailed in the competitive bidding process. So which […]
Earlier this month, Commerzbank, Germany’s second-largest lender, and DWS Group, Deutsche Bank’s asset-management arm, both decided against using EY Germany as their auditor because they were freaked out by how bad this Wirecard accounting scandal has become. This was followed by EY Global Chairman and CEO Carmine Di Sibio sending a letter to clients, expressing […]
So, some audit clients have allegedly told KPMG auditors not to come to their offices because of coronavirus concerns, according to a post on Fishbowl. We don’t know if these KPMG audit clients legitimately have COVID-19 concerns or, as one Fishbowl poster says, they just want the auditors off their backs for a bit. Anyway, […]
All the Tesla haters are having a field day with this on Twitter. The Wall Street Journal reported today: [PwC] has had a streak of accounting problems surface recently at U.S. companies it audits, including an uptick in high-profile restatements. Its clients account for three of the five biggest restatements so far this year, measured […]
I know you guys are just dying to know the answer to this question, so let’s get right to it. Audit Analytics recently came out with its breakdown of the top 20 audit firms that had the most insurance clients in 2018. Yes, the Big 4 firms took the top four spots, combining for 2,300 […]
Answer: Nowhere near as good as Marcum, which brought 30 new SEC audit clients onboard during the third quarter—21 of which were former clients of GBH CPAs, a Houston-based firm that merged with Marcum in July, according to Accounting Today. New York-based Marcum ended the quarter netting 22 new audit clients, more than twice its […]
After two Utah-based firms you might not have ever heard of picked up the most new Securities and Exchange Commission audit clients in the first quarter of 2018, Deloitte was the big winner in the second quarter, snagging 15 new engagements, with a net of 13, according to Accounting Today. BDO USA was the runner-up […]
This is a question you've probably never asked yourself but now that you're here, you're dying to know. Our friends over at Audit Analytics broke it down and figured out not only which of the Big 4 audits the most large accelerated and accelerated filers but also how many of those filers are audited by […]
One possible alternative title for Accounting Today's "scorecard for new SEC audit clients" would be "Jesus, PwC and Deloitte Lost a Lot of Audit Clients Last Year." I'll go out on a limb and say that it probably didn't even make the short list. AT went with "E&Y, KPMG Top 2012 for Audit Client Wins" which is […]
Every year, my mailbox gets cluttered up with huge proxy statement packets filled with a bunch of crap I won't read. And every year, I vote against the Big 4 accounting firm recommended by the Board. Why? Because it's the only way to stick it to the man now that I've sold out, obviously. In […]
Late on Friday, TransMontaigne Partners, L.P.*, "a terminaling and transportation company," issued a press release announcing that they had successfully filed its 10-K for 2011. Not a big deal really, but reading further one discovers that the company had very recently fired KPMG as its auditor: As previously disclosed, the audit committee of our general partner […]
Technically, if you count the days (based on the 8-K) it’s less than six months.
The reason? Without getting too wonky, it appears NASB wasn’t thrilled that KPMG challenged their valuation method of a real estate investment, Central Platte Holdings, LLC.
Klynveld had been engaged to audit the September 30, 2010 financial statements of NASB but things managed to get confrontational right off the bat as KPMG raised questions about the Company’s valuation methodology of Central Platte in its first quarter review.
This must have made NASB a little uncomfortable since KPMG’s methods might not paint as rosy as a picture and could have resulted in a restatement. Per the 8-K, “KPMG also informed the Company that if the investment was determined to be impaired, evidence existed which indicated that such impairment may have occurred in a prior period.”
Obviously the mere idea of a restatement was completely unacceptable for NASB but when KPMG requested that the Company engagement a third party appraisal, they really freaked. Either the bank didn’t want to pay for said third party’s services, or they were worried that the appraisal would show that Central Platte wasn’t worth squat.
More from the 8-K filing:
At KPMG’s request, management estimated the fair value of the investment in Central Platte. After reviewing management’s estimate of fair value, KPMG requested the Company obtain an independent third party appraisal of the fair value of the investment. KPMG did not complete their review of the fair value of the investment in Central Platte prior to their dismissal.
While the Company continues to evaluate whether it should change its accounting method in measuring impairment of the investment in preparing the financial statements for the quarter ended December 31, 2009, the Company disagrees with KPMG that its method of evaluating potential impairment of the investment in such period or in any prior
periods was in error.
For those of you unfamiliar with SEC filing lingo, the statement “the Company continues to evaluate whether it should change its accounting method,” actually means “We’re not changing shit.” Luckily, NASB knew that it can rely on their old auditors to give the thumbs up to their preferred method so they ran back (weeping and arms flailing no doubt) to BKD.
Maybe KPMG’s Kansas City office needed business but something tells us they’re better off.
Real estate dispute leads NASB Financial to switch auditors [KC Star]
In the latest predatory tactic from our friends at the Big 87654, we see that the recession may not be treating them so badly. Sure, non-profit busywork isn’t exactly a good time to be had by all but it pays the bills and for the Big 4, there is no such thing as bottom of the barrel.
Take what you can get, right?
The financial crisis blew up many big-name clients, leaving audit firms with excess capacity. Bear Stearns Cos., Merrill Lynch & Co., Washington Mutual Inc. and Fannie Mae disappeared from Deloitte LLP. Ernst & Young saw Lehman Bros. Holdings Inc. implode, while KPMG lost Countrywide Financial Corp. and PricewaterhouseCoopers lost Freddie Mac.
Gary Boomer, a Kansas-based accounting industry consultant, says Big Four firms sometimes are bidding less than $100 an hour for non-profit and public-sector work, down from $175 to $250 for junior auditors. “What they’re doing is buying some work to keep the staff busy,” he says.
That’s hilarious, shouldn’t we stop and think about why they allowed “the financial crisis” (you mean the unstable positions of those financial firms lost in the bloody battle?) to blow up so many of their big-name clients before we let them scavenge the scrapings for a tasty morsel of audit work?
I guess it works, it’s not like you’ve got guys in the cathedral on December 31st counting saint candles.
It could be worse. Here are some really nasty audits that the Big 4 could be doing in lieu of cheap non-profit and public sector work:
Joe Stack – Think about it, KPMG, you have some awfully tall buildings, be grateful.
Blackwater expenses – They really deserve their own audit team. It’ll keep those juniors busy, ifyaknowwhatImean.
C Street – Bonus side work helping Mark Sanford convert his dollars into Argentine pesos.
Whore yourselves out however you have to, guys, even if it means a door-to-door campaign for whatever audit work you can find.
We might be a little late to the party on this but it just recently came across our desk and since trying to get a post up today is akin to turning water into wine, we’re running with it. And, frankly, if a large portion of you regularly read the “Public Accounting Report” we’ll be blown (BLOWN!) away.
The determination of the ranking isn’t entirely clear to us so we’ll just go for some superficial analysis on Crowe Horwath (#1 on the list) and the Big 4:
• Crowe Horwath #1 – Net gain of 24 clients; net gain in audited revenue of approximately $4 billion; net gain in assets audited of $18.4 billion; net revenue to the firm of $11 million.
• PwC #2 – Net loss of 8 clients; net gain in audited revenue of $34.9 billion; net gain in assets audited of $2.68 billion; net revenue to the firm of $8.4 million.
• KPMG #5 – Net loss of 1 client; net gain in audited revenue of over $12.9 billion; net loss in assets audited of $61.4 billion; net loss in revenue to the firm of $19.5 million.
• Ernst & Young #9 – Net loss of 30 clients; net gain in audited revenue of $5.3 billion; net loss in assets audited of $53.8 billion; net loss in revenue to the firm of $36.7 million.
• Deloitte #10 – Net loss of 7 clients; net loss in audited revenue of over $90.5 billion; net loss in assets audited of $718 billion; net loss in revenue to the firm of $74.7 million.
Crowe Horwath’s net gain of 24 clients is easily the highest of the firms presented and they’re the only firm that has increases in all the categories presented. Kinda makes you wonder why they had such a steady stream of layoffs in 2009. We’re open to suggestions and wild-ass theories on this topic.
On the losing end, Deloitte’s loss of huge clients due to the financial apocalypse has been noted by our contributor Francine McKenna and is noted by the PAR:
The firm landed the most wins of any of the Big Four firms for 2009, 46, garnering 3.5% of the overall SEC audit wins for the year. Overall, the Big Four won 7.5% of the auditor changes reported during the first three months of 2005. What relegated the firm to last place in the standings was two huge loses: UAL, to E&Y, and Merril Lynch’s acquisition by Bank of America.
All that added up to nearly $75 million in lost audit fee revenue for Deloitte. In terms of the number clients lost, E&Y managed to cruise to that title with net loss of 30 clients:
E&Y captured some sizable wins for the year, notably UAL/Chicago (Revenue: $20.19 billion) from Deloitte and Apple/Cupertino, Calif. (Revenue $32.48 billion) from KPMG. But its gains couldn’t offset losses for the year of Tyson, Sovereign Bancorp and Nalco Holding, to name a few notable losses.
The end result of this client musical chairs doesn’t really add up to much in terms of revenue for any of the firms. Even the $75 million lost by Deloitte is a drop in the bucket compared to their fiscal year ’09 revenue of $26.1 billion.
Peruse as you numbers see fit and feel free to wave the flag.