Ernst & Young, Living in Denial, Settles with Lehman Investors for $99 Million
This is rich. Michael Rapoport reports: Ernst & Young LLP has agreed to pay $99 million to settle investor class-action allegations that it turned a blind eye when its audit client Lehman Brothers Holdings Inc. misled investors before the investment bank's 2008 collapse. The investors and Ernst "have reached an agreement in principle" to settle the […]
CAQ’s Audit Committee Explainer Is a Perfect Commercial Filler for Your Saturday Morning Cartoon Lineup
According to CAQ's YouTube page, this was posted back on July 30 (SOX's birthday, no less) but was tweeted earlier this afternoon so we figured it was worth sharing:
Herbalife Director Confident in PwC’s Audit; Others, Not So Much
This is fun. Here's what Herbalife Director Jeff Dunn, who's not a member of the company's audit committee, told Bloomberg about the current state of the re-audits: “I have nothing that suggests anything’s going to come out of the audit,” Dunn said yesterday in a telephone interview. “We view it as an opportunity because now […]
KPMG Auditors with Federal Clients Affected By Shutdown Urged to Keep Busy, Take a Little Vacay (But Only as a Last Resort)
As you all know, our government is kaput for the foreseeable future and since all of the Big 4 and many other DC-area firms serve the federal government, it stands to reason that a few of you might not have a lot to do today. Last night, we were forwarded the text of an […]
Just in Time for the Holidays: A PCAOB Auditor ID Proposal
Auditors are traditionally quiet participants in a company’s final annual report, signing their firm’s name on a form letter with a simple pass or fail grade. But a push to gain more insight into their process is growing globally, meeting demands for more disclosure from both regulators and investors. The Public Company Accounting Oversight Board, the […]
Early Odds Point to EY as Twitter’s Auditor
We're sure some of you know who the firm is already, but there's nothing out there yet so we'll refrain from calling it official. But! Audit Analytics has some stats on the 248 IPOs since April 2012 that show EY is a big favorite among EGCs since the JOBS Act was passed: Since April 2012, […]
Ex-Deloitte Partner Learns That Procrastination Has Its Consequences
All humans procrastinate from time to time. Whether it's putting off washing the car or feeding the kids, we simply can't get to everything. I mean, who can? As indentured servants to the capital markets, you are all too familiar with this dilemma. The to-do list grows long quite quickly and it's difficult to prioritize. […]
Auditor Market Share for IPOs Offers More Than Enough Consolation for Ernst & Young
Remember this chart from last month? #CPA link: Mo' Money, Mo' Problems: Faulty Big Four audits climb (along with their fees) http://t.co/M57S1ovtX9 pic.twitter.com/4wHa1xmQ9h — Rick Telberg (@CPA_Trendlines) August 15, 2013 Yep, the one where EY!'s deficient audits blast off like rockets into Syria. It's the kind of info that doesn't make any of the new EY! […]
PwC and KPMG Inspection Reports Make Us Wonder: Are Shoddy Big 4 Audits Here to Stay?
Have we mentioned how much we enjoy the PCAOB releasing inspection reports and/or making big announcements the week leading up to a major holiday? No? Oh yes, it's right up there with root canals and saddle sores. But it's their labor of love so we'll share the news with you. Today, the Board released the 2012 […]
To Whom It May Going Concern: ‘If Going Concern were to go public, who would you pick as your auditor?’
As we may have mentioned, we get bombarded with a number of strange questions. Either most of you have been enjoying summer because things have been relatively mundane or we've been relatively uninspired by the barrage of tips, suggestions, and inquiries, because TWIMGC hasn't appeared for a while. This seems like a good enough of […]
Auditors of Broker-Dealers Are Letting Us All Down
COME ON, YOU GUYS. You're making EY look really good and that is no small feat. Here's what PCAOB Member Jay Hanson had to say during the call with reporters about the Board's second progress report on interim inspection program for broker and dealer auditors: “The number of firms and audits inspected are greater than […]
Deloitte UK Boss Not Sure What You Were Expecting From That RBS Audit
Deloitte UK CEO David Sproul has been all over the British press for his remarks that politicians are hurting the country's economy by "trying to force companies to pay their fair share of tax." While it's true that politicians have an uncanny knack for getting in the way of all kinds of things, it's also […]
Here’s What You Need to Know About the PCAOB’s Proposed Makeover to the Auditor’s Report
This morning the PCAOB held their open meeting to discuss "Proposed Auditing Standards Regarding the Auditor’s Report and the Auditor’s Responsibilities Regarding Other Information." PCAOB Chairman James Doty called it a "watershed moment for the auditing in the United States." And yeah, I suppose it is. I mean, the auditor's opinion hasn't changed in 70 […]
Ernst & Young’s PCAOB Inspection Report Results Managed to Get Much Worse
Just yesterday we ran down the 2011 performance of the eight largest public accounting firms in this fair land. And just as soon as people were starting to get their knickers in a twist, the PCAOB released its 2012 inspection report for the firm formerly known as Ernst & Young. And yes, the firm's error […]
HSBC Dumping KPMG for PwC as Auditor
Alright, alright, alright. We knew this was possible. Let's try to keep things civil. HSBC Holdings Plc (HSBA), Europe’s largest bank, appointed PricewaterhouseCoopers LLP as auditor, dropping KPMG LLP after more than two decades. PwC will audit the 2015 fiscal year for the lender, subject to approval from shareholders at the bank’s annual meeting in May, […]
Ernst & Young Lost a Lot of Audit Clients Last Quarter
I suppose "a lot" is a relative term, but I think most people would agree that to lose, on average, more than one client per week constitutes "a lot."
Unilever CFO Tries to Let PwC Go Gently
Jean-Marc Huet, the company's chief financial officer, said: "Our business is very large in scale and reach, with operations in over a hundred countries. "The challenge that this poses for our auditors has been successfully met by PricewaterhouseCoopers over many years and we have always been impressed with the rigour and quality of their audit. "However, given […]
PwC’s Head of Assurance Is Gonna Try Something New
Tim Ryan, who has led PwC's Assurance practice for the last four years is taking on a new role in firm as US Markets, Strategy, and Stakeholders Leader and Vin Colman, the East Region Vice Chair will take his place. We obtained a copy of the email Mr. Ryan sent to PwC Assurance staff […]
China Ready to Turn Over Audit Workpapers for Some Company at Some Point
The U.S. Securities and Exchange Commission has been struggling to obtain papers from China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China has resisted for years turning over documents because of state-secrets and sovereignty concerns. The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers […]
What’s in a (Big 4 Partner’s) Name? Maybe a Lot
On Friday, Francine McKenna provided a perfect example of what investors could learn about the audit partners for public companies should the PCAOB start requiring the naming of names. Francine, through her sources, was able to confirm that Linda McGowan was the partner for MF Global — something widely known amongst regulators, and lawyers involved […]
Ernst & Young Latest Big 4 Firm to Have Part II of PCAOB Inspection Report Released
Okay, remind me — there's a saying about "three" and "trend" or "pattern" or something? Forget it, not important. What is important — at least we've made the argument that it is — is that the PCAOB released Part II of Ernst & Young's 2009 inspection report. That makes three out of four Big 4 […]
The SEC Manages to Get Softer on Big 4 Audit Firms
Incredibly, the SEC has done something I didn't think was possible. It has, in its implicit blessing of Herbalife's selection of PwC as auditor, given the Big 4 and other audit firms more leverage in future debates over independence with regard to past non-audit services. And the last thing the Big 4 needs is more […]
(UPDATE) In Becoming Herbalife’s Auditor, PwC Does a Dicey Independence Dance
~ See update below It seems fitting that PwC would replace KPMG as Herbalife's auditor, doesn't it? On May 21, 2013, the Audit Committee of the Company’s Board of Directors engaged PricewaterhouseCoopers LLP (“PwC”) to serve as its new independent registered public accounting firm to audit the Company’s financial statements for its fiscal year ending […]
City of Los Angeles Blames Technology, Retired Auditors for Missing $43 Million
Officials in cash-strapped Los Angeles have uncovered almost $43 million that was just sitting in a Department of Transportation account unbeknownst to the city, prompting them to wonder if there's more magic money stashed away: The discovery of $42.6 million will be a welcome one-time infusion into next year's budget, officials said, but has left […]
Guest Post: The PCAOB Is Our Parents Now
Ed. note: The following was written exclusively for Going Concern by a Big 4 auditor who wished to remain anonymous.
The PCAOB is turning into our parents. Or at least they are using the same tactics in handing out punishment. “We know you were up to no good last night, so if you just tell us what you did we’ll take that into consideration when deciding how long to ground you.”
Herbalife’s Surprise Be-Our-New-Audit-Firm Sweepstakes Will Have a Winner Soon
Herbalife Ltd. is making progress in its search for a new accounting firm, executives said during a conference call with analysts Tuesday. The Los Angeles nutritional products company was forced to hire a new accounting firm after KPMG resigned earlier this month because one of its senior partners was accused of insider trading in Herbalife stock. The […]
ICYMI: BDO Picks Up Skechers After…Ya Know
Bravo Delta Oscar has come to Skechers' rescue and will re-audit the two years worth of financial statements that KPMG abandoned after we learned that Scott London spent some of his billable hours counting cards. From henceforth, gaining a client due to a scandal of a notable degree shall be known as "picking up a London." […]
Judge: Deloitte Can Handle Two Chinese-related Court Cases Just Fine
Deloitte Touche Tohmatsu CPA Ltd. lost a bid to delay a lawsuit brought by the U.S. Securities and Exchange Commission seeking documents in an investigation of the auditor’s former client Longtop Financial Technologies Ltd. U.S. District Judge Gladys Kessler in Washington today rejected Shanghai-based Deloitte’s argument that the case should be put on hold while an […]
Public Company CFO Says Naming Audit Partner Is NBD
Andy Bishop is the chief financial officer of Hallador Energy, a publicly traded coal company. Like many CFOs, he did a little bit of time at a large accounting firm, so he knows a thing or two about auditing and pays attention to the haps in that space. So when he heard that the PCAOB […]
KPMG’s Official Statement Meets Mystery (Bachelor of) Science (in Accounting) Theater
When a giant insider trading turd hits the fan of independence, KPMG spokesman Timothy Connolly is there with a Clorox wipe to sanitize the minds of the American public. Here's what he said. Be careful, it'll probably sting your amygdala. Late last week, we were informed that the partner in charge of KPMG’s audit practice in […]
Despite Entering a ‘War Zone’, the Next Auditor of Herbalife Should Find Solace in All the Fees They’ll Earn
Part of the reason this KPMG resignation is such a conundrum for both Herbalife and Skechers is that the firm withdrew its audits back to 2010. The clean-up crew for each company will have its work cut out, and according to Georgetown professor James Angel, Herbalife's new auditor, especially, will "be walking into a war […]
Lessons From L’affaire Scott London: Don’t Talk About Your Clients While Quoting Caddyshack
I love Peter Henning's suggestion that ex-KPMG partner Scott London was swapping Caddyshack quotes with his golfing buddy. Everyone having few drinks after playing a round inevitably sees someone walk by with a hideous headpiece and says, "When you buy a hat like this I bet you get a free bowl of soup." I think it's a law in Florida that you have to recite that line.
(UPDATE) KPMG to Resign as Herbalife’s Auditor; Who’s Next? A: Skechers
~ Several updates below including the name of the partner fired by KPMG and statements from Herbalife and Skechers. That was fast. The New York Times reports that the KPMG will be resigning as the auditor of Herbalife: Herbalife is poised to disclose on Tuesday that KPMG will have to resign as the company’s […]
Table-Dancing Philly Audit Luigi Will Pretty Much Consume Your Entire Afternoon
Alright, so we're all sick of Harlem Shake videos amiright? We almost didn't even bother to click on this reader submission from "Philly audit" (where we just do not know) but we found the guy dressed as Luigi so transfixing we had no choice but to share. See for yourself: No need to out […]
This ‘Fighting Fraud’ Video from the CAQ Isn’t Going to Help That Expectations Gap Problem Auditors Love to Complain About
Most people like to learn in some sort of visual fashion. Reading? BORING. Lectures? AWFUL. There needs to be action, bright colors, and a damsel in distress — bonus points if there's a scene of frontal nudity — to get people to pay attention for longer than five minutes. Investors in public companies are no […]
Twilight Remake to Feature Auditors Instead of Vampires
I'm not sure I can keep this up — the words and stuff about accounting. Thankfully, this James Huang guy did another video. It's about that Twilight book I don't know anything about. I did happen to be at the Barnes & Noble a couple of times when the new ones were being released and […]
Chimera Seems to Have Enjoyed Firing Deloitte a Little More the Second Time Around
If you've read anything recent about Chimera Investment Corp., you're no doubt glad that you don't have any part in it. Tony Catanatch's post from last week has more than enough to most auditors want to grit their teeth into dust: Here is a company that has neither filed a quarterly report since November 18, 2011 […]
Here’s Why Releasing Part II of the PCAOB Inspection Reports Is Important
I know what a lot of you are thinking — "The PCOAB is a bunch of couldn't-hack-it-in-public know-nothings that like nothing more than making hard-working auditors' lives a living hell. And, oh, Part II doesn't mean jack squat." FANTASTIC! Then you won't mind that I'm going to spend the next few hundred words telling you […]
At Least PwC Doesn’t Have to Worry About Improving the Supervision of Its Auditors Anymore
Last week the PCAOB dropped Part II of PwC's 2008 and 2009 inspection reports. This was only the second time a Big 4 firm's Part II had been released since the audit profession was blessed with government regulation. It was like a fire rainbow or an unassisted triple play. Rare! Exciting-ish! We pored over the […]
There’s No Way Someone at Deloitte Leaked Those Carolina Panthers Financial Statements
Yesterday, Tommy Craggs at Deadspin scooped more sports franchise financial statements, this time those of the Carolina Panthers. As usual, it's great insight into how sports teams are shrewdly run businesses1. Just like any financial statement report, the good stuff is in the notes and Craggs dissects the more interesting points. If you're not up […]
PwC Has Rally Caps on After PCAOB’s Expanded Reports
Yesterday afternoon, right about the time I couldn't read another word about PwC's love of CAKE, this tip came through at approximately 7 pm ET: Tim Ryan just finished up an "emergency" call with all partners and managers about this. Call began at 5:30 EST. Mr. Ryan, as we noted this morning, was quoted in Floyd […]
Warren Buffett Has No Use for Auditors
In one instance at least! Here's a little anecdote courtesy of the ubiquitous Business Insider: [I]n 1984, Berkshire highlighted its purchase of Nebraska Furniture Mart [in its annual letter to investors]. Buffett was a huge fan of NFM's chairman, the 91-year-old Rose Blumkin, who he affectionately referred to as "Mrs. B." Here's an excerpt: I […]
PwC and Deloitte Probably Don’t Care That They Lost So Many Audit Clients
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 […]
Oh Look, Deloitte Has More Trouble Thanks to a Chinese Audit Client
Just when you thought Deloitte's China rash had gone into remission, some investors come along who don't think too highly of the audit performed by D to the T. In this particular case, the investors are a group of investment funds including Columbia Pacific Opportunity Fund LP and Fir Tree Value Master Fund LP who, according […]
Anyone Concerned That PwC’s Legal Troubles Lacked International Flair Can Rest Easy
Scandal-hit subprime lender Cattles is suing PwC, alleging negligence over its audit of two years of financial statements. PwC intends to contest what it called the “inflated and misguided claim” in the High Court in London. […] A supervisor representing Cattles’ creditors asserted that PwC should not have signed off the 2006 and 2007 financial statements of […]
Here’s an Unconfirmed Account of a KPMG Auditor That Walked Off the Job and Never Looked Back
From the mailbag: There was an Audit Staff 2 in the Silicon Valley KPMG office that walked out of his audit room during busy season and just did not return. Everyone is talking about it, even here at another big 4. He is our hero. We all want to celebrate him. We don't have any further details at […]
ICYMI: PwC and BDO Both Passed Their AICPA Peer Reviews Just Fine
Remember how Deloitte's AICPA Peer Review finding of "pass with deficiency" was one of the lowliest of low points for the year in auditing? Sure you do. At the time, we learned from the AICPA's James Brackens that from 2008 to 2010, only 8% of the audit firms that participated in the peer review had […]
Accountants: Tell Us Your Busy Season Problems
As many professionals embark on the tumultuous journey that are the busy season months of January, February, March, and April, it is inevitable that known and unknown problems will arise. Some of these are client-initiated and others are co-worker-initiated. Some of them are simple problems; some of them are complex problems. Some involve food odor; some […]
Developing: Ernst & Young Auditor’s Life Is About to Become a Living Hell
Much like the flu, it's far too early to say how bad this busy season will be. But this particular case doesn't sound good: We have about 10 days between when the client closes their financials and the earnings release…going to be an intense 10 days… — Life at EY (@EYstaff) January 15, 2013 We'll […]
FYI: Attorneys Think Auditors’ Legal Confirmation Letters Are a Giant Waste of Time
Mark Herrmann, the in-house legal columnist at Above the Law, has a bone to pick today and it's one the opiners out there are intimately familiar with: When I worked at a law firm, I knew that lawyers’ responses to audit letters — in which the firm confirms to auditors the status of litigation pending […]
SEC Charges Two KPMG Auditors with Something We’re All Accustomed to Auditors Doing
Way back in April 2010, KPMG resigned as the auditor of TierOne Bank. You see, TierOne was in a bit of a mess with its regulator, the Office of Thrift Supervision; the House of Klynveld risk gurus finally had enough, pulled everyone out of there, withdrew their 2008 audit, and told everyone they wouldn't touch […]
The SEC Investigation into Ernst & Young’s Lobbying Activities Isn’t Going to Amount to Much
Late yesterday, Sarah Lynch and Dena Aubin at Reuters reported that the SEC was poking around Ernst & Young's lobbying activities on behalf of audit clients. Apparently the investigation has been going on since Reuters first broke the story back in March that the specialized advisory group of Washington Council Ernst & Young was trotting around […]
BDO Keeps Pace with Rival Audit Firms in Terrible PCAOB Inspection Reports
For whatever reason, BDO was excluded in the last-minute lump of coal the PCAOB delivered to Deloitte, Ernst & Young, and Grant Thornton right before Christmas, but that doesn't mean their inspection report wasn't in the same class of quality. The Board inspected audits at 16 of BDO's 35 offices, inspecting 23 audits with 9 […]
Deloitte Rewards Auditors for Job Well Done with Professional Skepticism Homework
On December 21st, long after most people had given up on the world coming to an end and just about the time everyone on the east coast was about to check out for the rest of 2012, the PCAOB conveniently released the 2011 inspection reports for Deloitte, Grant Thornton, and Ernst & Young. The timing […]
KPMG Chairman: Auditor Rotation Is a ‘Terrible Idea’
It's more or less understood by everyone, with a few exceptions, that pursuing mandatory auditor rotation is a giant waste of time. There has been much discussion of the issue — from the hallowed walls of a PCAOB open meeting to the slums of the Going Concern comment section — and while there has been […]
RSM Tenon Shareholders Actually Acted on Their Dissatisfaction with PwC’s Auditing Ability
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 […]
PCAOB Member Jay Hanson Can’t Imagine a World with Auditor Rotation
On Monday, PCAOB Chairman James Doty gave a speech where he mentioned, among other things, that "auditor term limits" was something the Board would consider in order to "protect the auditor's independence." Undoubtedly, this was disheartening news to auditors who count themselves as the Big 4 variety because they've gone on record to voice opposition and […]
SEC, China Will Probably Compromise Over Big 4 Chinese Affiliates Someday, Says Guy
The SEC's move against the Big 4's Chinese affiliates on Monday has people all worked up. On the one hand, yes, if the SEC were to delist a lot of Chinese companies that would make a lot of people sad. Also, if fewer Chinese companies were to consider accessing U.S. markets because they aren't so […]
Auditors Will Be Happy to Know That Term Limits Are Still on the Table
In a keynote speech at the AICPA's National Conference on SEC and PCAOB developments, Chairman Jim Doty passed on the opportunity to mention extremely recent developments and instead focused on things like the importance of independent auditing to "our economic success" and audit firm culture and the PCAOB's current initiatives. In fact, Mr. Doty doesn't mention […]
SEC Finally Gets Around to Losing Patience with the Big 4’s Chinese Firms
China has been a thorny issue with the SEC and the PCAOB over the last couple of years. You see, there's been some concern that some Chinese companies have accessed U.S. markets through dubious means and then provided financial reporting and disclosures that weren't accurate in material respects. Audit firms charged with providing an opinion […]
(UPDATE) Canadian Officials Not Impressed with Ernst & Young’s Audits of Sino-Forest
Up until this point, Ernst & Young has seemed perfectly content to see how this Sino-Forest situation (some have called it a "Ponzi scheme") would play out, standing quietly by their audit opinions without so much as a peep*. Canadian regulators, possibly impatient with the radio silence, have decided that they'll open things up, as the Ontario Securities […]
Hiring Watch ’13: PCAOB
Yesterday, the PCAOB held an open meeting discussing its plans for being the most dominating force in public accounting regulation over the next few years. Within these plans is a strategory to not just be the type of regulator that points out the things that you royally fucked up, but also to be a resource […]
Report: That Sloppy McGladrey Audit Was Definitely Maybe Probably Unity Bank
HEY, everyone remember that really sloppy audit that 3 (then) McGladrey & Pullen auditors got smacked on the wrist and/or face for when the PCAOB found out they threw in a bunch of necessary documentation after the fact? Jonathan Weil over at Bloomberg seems to have unpuzzled the whole thing and is saying the mystery […]
Big 4 Firm Doesn’t Appreciate the Insinuation That Former Big 4 Employees Are Anything Less Than 100% Objective When Choosing an Audit Firm
It has become increasingly clear that the front line of the war on audit firm oligarchs is in the U.K. While regulators and observers in the U.S. seem ambivalent about the Final Four Horsemen of the Financial Apocalypse, the British have seemed quite content to irritate the Big 4 with their Competition Commission's insistence that […]
Let’s Discuss: Auditors and The Responsibility to Detect Fraud
When I finally got around to writing about the HP/Autonomy finger pointing party yesterday, the topic of fraud detection by auditors came up as it often does in these scenarios. More specifically, the statement that "audits are NOT designed to detect fraud." A friend of Going Concern emailed me later in the day with […]
This HP/Autonomy “Accounting Improprieties” Thing Hit the Big 4 Superfecta and Other Things We Learned Today
As luck would have it, we don't get to coast this Thanksgiving week as HP had to come along and screw it all up by announcing a $8.8 billion write-down, $5 billion of which is described as "serious accounting improprieties, misrepresentation and disclosure failures" at software company Autonomy, who HP acquired back in 2011. And where […]
Auditor Musical Chairs: 99¢ Only Stores Splurges on Ernst & Young, Dumps BDO
With a business name like "99¢ Only Stores," no one would blame you if you assumed the company and would try to pinch some pennies on their auditor. It's a commodity service that is just asking to be squeezed, after all. However, sometimes as a public company, you'd like a big name brand on your […]
Batman Auditor Gives Scooby Doo a Run For His Scooby Snacks
I'm starting to think we need a Going Concern Halloween costume contest next year. There's always the old "reverse merger" idea or, failing that if you don't want to scare away the client with innuendo, you could always go as the douchey vending machine. Anyway, as we know Halloween has come and gone but that […]
The Basics: Interview Preparedness For Socially Awkward, Loner Refugees
One might think after 3 years of answering what appears to be the same handful of questions over and over and over and over and over and over and over we'd totally be sick of it but I assure you we're not. There are no stupid questions only stupid people so if you've got half […]
Q: Scooby-Dooby-Doo Where Are You? A: In an Audit Room (Allegedly)
Halloween is one of those holidays that auditors don't often get to celebrate at work. The general consensus being that you can't provide exemplary client service while dressed as Captain Jack Sparrow, a contestant on The Price is Right, or Sexy Heinz Ketchup. This is even more unfair due to the fact that the entire tax […]
Being an Independent Auditor Is So Much Easier (and Effective) If You Are a Total Prick
I love HGTV in fact but not in appearance. No one looks at me and thinks, "I bet that guy TiVos Yard Crashers, Curb Appeal, and House Hunters," but I do. And although I think Hilari was robbed in Design Star All Stars, I never really talk about it with anybody. Fortunately, there is no […]
PCAOB Discovers That Some Firms Consider Audit Quality to Be a Nice Idea That Doesn’t Work in Real Life
PCAOB Board Member Jeanette Franzel, CPA, CIA, CMA, CGFM, gave a speech at University of Tennessee Corporate Governance Center today that discusses "Current Trends and Issues in Public Company Auditing." That's nice and all but the first half of the transcript is more or less a history of auditing and the PCAOB. The second half finally gets […]
Dual Monitors Will Allow PwC Auditors to Finally Get Some Work Done
One of the most frustrating things that plagues many capital market servants is not having the necessary equipment to do one’s job. There’s nothing quite like your pull-start laptop that runs Excel 97 crashing in the middle of the day to railroad your progress.
And Now, Here Are Deloitte Chargeable Hour Goals (Assurance)
Following up on the Ernst & Young chargeability goals we published earlier this week, now we bring you Deloitte's goals for "2012" sent to us, second-hand, from a trusted source: Staff – minimum of 1,900 Manager – 1,700 Senior Manager – 1,600 However, after farming the comments on the E&Y post, here are some […]
Here Are Ernst & Young Chargeable Hour Goals for Fiscal Year 2012
Courtesy of a friend of Going Concern, we bring you the bar that Black and Yellow auditors are trying to jump over for the remainder of the fiscal year*. Yes, I'm sure this isn't news to anyone inside Chez Turley, but we felt that it's important that all non-EY auditors know how hard they are […]
China Agrees to “Look But Don’t Touch” PCAOB Visits
Board member Lewis Ferguson tells of China's teasing ways in a speech that he's giving at the California State University SEC Financial Reporting Conference in Irvine: As a first step toward further cooperation [with China], we are working toward and have tentatively agreed on observational visits where PCAOB inspectors would observe the Chinese authorities conducting […]
Big 4 PCAOB Inspection Reports to Be SALY
If a person was going to describe the 2010 PCAOB inspection results, you might hear things like, "didn't meet expectations" or "downright embarrassing" or "an abomination" or they may just make Hans Hoogervorst's favorite hand gesture. Simply, they weren't so good. The good news is there's no place to go but up. The bad news is […]
Going Concern Warnings Are Worthless
Just a few years ago, a number of companies failed, were rescued by competitors (if you can call it a rescue) while on the brink, or bailed out by the federal government. It was a pretty exciting time! One of the downsides of all this drama was that you, me, EVERYBODY lost a lot of […]
Grant Thornton Audit Partner Can Barely Keep From Laughing at PwC’s Claim That UK Audit Market Is ‘Fiercely Competitive’
For some time now, second-tier audit firms in the UK have been bent out of shape about the domination of the Big 4. And seeing how one of the Final Four Horsemen of the accounting apocalypse is auditing 99 out of 100 FTSE companies (and 240 of the FTSE 250), they may have a legitimate beef. On […]
KPMG’s PCAOB Inspection Report Shows Firm’s Audit Quality Was Consistently Meh with Last Year
Late yesterday the PCAOB released the first Big 4 firm inspection report with none other than KPMG (in full on page 2). Compliance Week reported that the House of Klynveld more or less stayed consistent with last year's findings, which basically amounts to everyone shrugging with indifference: In its first published report from the 2011 […]
Mandatory Audit Firm Rotation: Regulatory Sit ‘n’ Spin
It's been about a year since the PCAOB crapped out Release No. 2011-006, "Concept Release on Auditor Independence and Audit Firm Rotation." Some people in the profession think the PCAOB has no real intention of mandating audit firm rotation; rather, these professional skeptics believe the PCAOB just brought it up to appear relevant. The PCAOB […]
PCAOB’s Latest Report Finds That Auditors of Broker-Dealers Suck, Too
PCAOB Auditor Wrecking Ball Tour 2012 rolls on with the an interim report on the auditors of broker-dealers. And this time there's 100% deficiency! From the Executive Summary of the Report on the Progress of the Interim Inspection Program Related to Audits of Brokers and Dealers: This report presents observations from inspections of portions of […]
Here Are Two Accounting-themed Videos Parodying “Call Me Maybe” That You Didn’t Ask For
We've received a number of emails in the past 24 hours pointing to a recruiting video out of PwC Singapore that parodies an awful (yet, awfully catchy) song. I'm only sharing it with you because it deserves public worldwide scorn so this travesty will not be repeated by any misguided recruiting teams here in the […]
Just in Case There Are Audit Committee Members Out There Slacking on the Job, The PCAOB Has Released a Guide to Its Inspections That Should Catch You Up on Things
Are you a member of an audit committee that's been phoning it in? Or are you a newbie that's feeling upstaged by your fellow audit committee buds that are the so-called financial experts? Maybe you're skeptical of the words coming out of your audit firm's piehole(s) but you're not sure how to respond? Fear not! […]
Crowe Horwath May Have the Worst PCAOB Inspection Report Yet
PCAOB Terror Tour 2012 continues with the release of the inspection for Oakbrook Terrace's own Crowe Horwath. Up until this point, we thought that no one was going to make a run at the deplorable performances of Deloitte and McGladrey but ol' Crowe (as opposed to Old Crow) has managed to do it. PCAOB examiners found […]
This is a Makeshift Card for Sarbanes-Oxley’s Anniversary That You Should All Sign
As we mentioned, today is the 10th anniversary of Sarbanes-Oxley. Or was it yesterday? I guess it depends on who you ask. Technically, it was enacted on July 29th and President Bush signed it into law on July 30th. Personally, I prefer it to be the 29th because since I've started writing for this here […]
Deloitte Informs Indiana Officials That When You Let $526 Million Go Missing That, Yeah, It Can Take Awhile to Find It
Maybe you're not aware of this, but the state of Indiana lost track of $320 million in corporate taxes. Yep! They know that "state workers did not properly enter changes in the state's tax collection system" but why it took them four years to discover the problem is anybody's guess. Oh, and they also owe […]
CFTC Chairman Knows PFGBest Auditors Shouldn’t Have Passed GAAS
Gary Gensler, who may or may not be aware that PFGBest's auditor preferred to don jorts at the (home) office, is familiar enough with auditing standards to know there are certain ones that always need to happen: Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers on Wednesday that Peregrine Financial Group's outside auditors should […]
Scoring Sarbanes-Oxley
As we pointed out in this morning's roundup, the New York Times' Room for Debate is discussing the success/failure of Sarbanes-Oxley. Sunday marks SarbOx's 10th birthday so naturally people in the accounting and compliance world are getting all nostalgic about it and yeah, okay, nostalgia can be fun sometimes. The Times had four contributors in […]
Ex-NMFA Controller Admits That He Was ‘Probably Negligent’ to Submit a Fake Audit Report But It’s Okay Because a Real Audit Will Confirm That Everything Is A-okay
The New Mexico Finance Authority ("NMFA") has a bit of a mess on its hands. You see, a week or so back, the State Auditor discovered that the audit report – that was submitted six months late – was fake. Bogus. A sham. The NMFA management and board investigated and determined that the authority’s former […]
Compensation and Bonus Watch ’12: Deloitte Audit
As you recall, last week we went over the Deloitte AERS Advisory group's compensation numbers. Today, we have more comp data to share, this time for the opiners. Unfortunately, we don't have the financial results slide but most of all the other details will be included in this post. Let's get right to it, shall […]
Deloitte Achieves Another Unflattering Milestone in Audit Quality
As you well know, the quality of work performed by Big 4 auditors has been called into question aloud on a regular basis since the fall of 2008. Oh sure, you might say that ever since there was a Final 4 (circa 2002) there have been haters, but since we all came to the brink […]
PwC Employee Gives Himself Mixed Reviews on Making Legendary Carpenter Look Good During Tenure at the Firm
What makes for a good PwC employee? Excel skills? Critical thinking? The number of high-fives given to co-workers when they manage to not screw something up? Every one measures him or herself differently even though your superiors often measure you by indecipherable arbitrary platitudes. But in a farewell email that several sources have sent to […]
Big Shot NYC Ernst & Young Auditor Visits St. Louis Engagement Team, Makes It Rain Sandwiches
Apparently, lunch is a luxury in some of Ernst & Young's smaller offices. One of my seniors from our NYC office is working in St. Louis this week so we got lunch yesterday — Life at EY (@EYstaff) July 13, 2012 With these kinds of working conditions, maybe unions are a good idea for Big […]
The First Sign of Trouble at PFGBest Might Have Been The Fact That Their Auditor Worked Out of a Living Room
When shopping around for an auditor, a strong, completely legit company might look for such things as prestige or number of years serving capital markets without going all Arthur Andersen on 'em but for belly-up brokerage firm PFGBest, it looks like some chick's house in the Chicago 'burbs was the perfect sort of office space […]
More PCAOB Comment Letters Need to Complain About the Issuer-pay Model
If you're like us, you've been anxiously awaiting comment letters on the PCAOB's auditor reporting model proposal. There's nothing better than self-righteous firms penning letters filled with thinly-veiled condescension. Plus, the U.S. Chamber owes us all an honest effort after phoning in their initial response. So far none of the major accounting firms, the AICPA, CAQ, […]