Earlier today the PCAOB gave KPMG of the South African variety a slap on the wrist and punished a couple of partners for the firm collaborating with an outside accounting firm not registered with the PCAOB on three years’ worth of audits of a public company. That non-registered accounting firm was KPMG Zimbabwe. And these […]
FT reports that Financial Reporting Council CEO Sir Jon Thompson has a strong message to firms upset about getting hit with fines for bad auditing: git gud. Accountants should stop complaining about extra scrutiny and fines for audit failures and improve the quality of their work, said the head of the sector’s UK watchdog, which […]
[UPDATE] The Queen’s KPMG was finally, officially fined £14.4 million by the Financial Reporting Council earlier this morning for all the stupidity that happened during the 2016 audit of collapsed construction and services company Carillion, as well as for the mistakes that occurred in its 2014 audit of IT software company Regenersis. KPMG UK and […]
Well this is bad. The SEC has fined EY a record $100 million after an investigation revealed auditors at EY were cheating on ethics exams (open book ethics exams we presume) and CPE; worse than cheating alone, they actively tried to cover it up and hide the cheating from the SEC. From the SEC news […]
After doing a quick Google search, it looks like the PCAOB hasn’t punished a public accounting firm for failures in its audits of brokers and dealers since 2016. But top 25 firm Citrin Cooperman broke that drought yesterday after being fined $200,000 by a disappointed PCAOB for violating standards related to broker-dealer audits. And three […]
From Australian Financial Review: Chartered Accountants ANZ has belatedly ruled that only 12 of the 422 members from big four consulting firm KPMG who took part in systemic exam cheating will be put through the professional body’s individual disciplinary process. The body’s disciplinary committee ruled that the “activities undertaken” by 410 KPMG CA ANZ members […]
It only took five years, but Scott Marcello finally received some sort of punishment for what happened in KPMG’s audit practice several years ago as partners were working with PCAOB insiders to illegally receive advanced notice of the PCAOB’s inspection plans for KPMG audits. Marcello, KPMG’s former vice chair of audit, was fined $100,000 today […]
Let’s take a break from what’s going on right now in Ukraine to tell you something we’ve written a lot about in recent years and that we enjoy writing about: KPMG UK being bad at auditing. While we await KPMG’s punishment for that whole Carillion debacle, the Financial Reporting Council announced on March 8 that […]
Ever since KPMG was fined $50 million by the SEC in June 2019 as a result of auditors at all levels cheating on internal online training exams by illegally sharing answers with colleagues and manipulating test results (as well as that whole KPMG audit partners stealing confidential inspection information from the PCAOB thing), we have […]
[UPDATE] Neil Hutt quit or was forced to resign or whatever. Point is, he no longer works at EY in the UK. From the The Times of London on Nov. 13: EY, the Big Four accountancy group, has accepted the resignation of one of its partners, who told a female trainee “I’m going to f*** […]
A little over a month after being fined more than £2.3 million by the Financial Reporting Council for that whole Patisserie Valerie mess, Grant Thornton got called to the principal’s office once again for audit failures—this time for its 2015, 2016, and 2017 audits of outsourcing company Interserve, which went into administration in 2019. GT […]
Someone lit a fire under the asses of those who work in the PCAOB enforcement division because they issued seven disciplinary orders to audit firms and accountants from Sept. 22 to Sept. 30. One of those firms was Deloitte Canada. Compliance Week reported: The Public Company Accounting Oversight Board (PCAOB) on Wednesday [Sept. 29] imposed […]
From the Financial Times yesterday: A senior KPMG partner advanced an “untruthful” defence at a disciplinary hearing into the accounting firm’s misconduct in the sale of bedmaker Silentnight to a private equity fund, a tribunal has found. The tribunal also found that KPMG and David Costley-Wood, the partner who led the Silentnight work, had failed […]
Back in August 2018, Grant Thornton UK was given a £4 million fine by the Financial Reporting Council (reduced to £3 million after a settlement discount) for a then-partner’s conflict of interest in serving on the audit committees of two audit clients, in addition to “widespread and serious inadequacies in the control environment in Grant […]
July 1, 2014 was a big day for Sarah Martin, as she was one of 180 chosen ones who were admitted to the partnership by PwC. On that day the Richmond, VA-based Martin became a partner in assurance, which along with tax now falls under the Trust Solutions umbrella at P. Dubs. Now fast-forward seven […]
At the end of the Married With Children episode, “Go For the Old,” Al Bundy says: “It’s only cheating if you get caught.” Well, KPMG got caught. The firm was busted for cheating on internal training exams. Again. Just like in the US. This time the cheating was running rampant in Australia. The PCAOB fined […]
The UK’s audit cops were itchin’ to dole out some discipline today, and the butts that were paddled belong to ex-audit partner Mark Harvey and his former employer EY. The Financial Times reported: Accounting firm EY has been fined £2.2m and issued with a severe reprimand for failings in its audit of Stagecoach, the London-listed […]
When an independent disciplinary tribunal concluded in June that KPMG U.K. and one of the firm’s partners failed to comply with the fundamental principles of objectivity and integrity in their work on the sale of bed manufacturer Silentnight to U.S. private equity firm HIG Capital in 2011, the panel recommended KPMG be fined a record-setting […]
It had been nearly three years since Grant Thornton ran afoul of PCAOB auditing rules and got caught—on Dec. 20, 2017, the Purple Rose of Chicago agreed to pay a $1.5 million penalty to the PCAOB for quality control violations and audit failures as a result of its shoddy auditing work for Bancorp. But GT’s […]
Did you know there is a giant wheel with the names of the six largest accounting firms in Britain—PwC, Deloitte, EY, KPMG, BDO, and Grant Thornton—in a hidden room at the Financial Reporting Council’s office? When the mood strikes them, FRC employees will gather round the big wheel and place bets as the wheel is […]
[Updated on Nov. 3 with statement from KPMG.] Here’s some more news pertaining to the KPMG/PCAOB cheating scandal that I wasn’t expecting to post about today: KPMG has to pay a $1.3 million fine to the California Board of Accountancy for bending the audit inspection rules a handful of years ago AND for auditors cheating […]
PwC is no longer the answer to the trivia question: “Which Big 4 firm in the U.K. received the largest fine from the Financial Reporting Council?” That distinction now belongs to Deloitte. The Queen’s Deloitte was fined £15 million by the U.K.’s audit cops, as well as ordered to pay an additional £5.6 million to […]
Congrats to BDO for getting its first-ever fine from the U.K.’s Financial Reporting Council for committing an auditing boner. Now BDO can say it finally has something in common with the Big 4. The Financial Times reported today: Accountancy firm BDO has received its first UK audit fine from the industry’s regulator for rule breaches […]
In hockey if you get penalized for misconduct, you spend the next 10 minutes in the penalty box and feel shame. In auditing if you get penalized for misconduct, you pay some slap-on-the-wrist fine from a regulator, vow to be better next time, and go on your merry way. The Queen’s Grant Thornton is the […]
Plus, an accountant from India is accused of spewing hatred, and a Michigan tax preparer allegedly stole more than $400,000 from clients. PCAOB fines CPA firm owner for not playing by the rules [PCAOB] Rizwan Ahmed, owner of Ahmed & Associates CPA P.C. in New York, was fined $10,000 by the PCAOB on April 21 […]
I don’t know about you guys but in this weird and depressing time we’re living in, I take a little bit of comfort in finding some shred of pre-coronavirus normalcy in my day-to-day life. And I found something this morning, thanks to Reuters: KPMG U.K. was fined by the Financial Reporting Council for piss-poor auditing. […]
A Big 4 firm was fined by a regulator across the pond today, and for once, it wasn’t because of its lack of auditing prowess. BUT! It did involve running afoul of independence rules. The Financial Times reported: The administrators to collapsed electricals retailer Comet Group have been handed a record UK insolvency fine of […]
We’ve had some fun over the years picking on BDO USA for its auditing imperfections, from blowing the 2009 audit of General Employment Enterprises Inc. to three former BDO accountants getting into trouble for misdeeds made in the 2013 audit of AmTrust Financial Services Inc. to god-awful PCAOB audit inspection reports. How horrible have BDO’s […]
Plus, several tax preparers have run afoul of the law. SC fines Deloitte’s partner for non-compliance [The Malaysian Reserve] Huang Khean Yeong, a partner at Deloitte PLT, was fined RM63,000 by the Securities Commission Malaysia’s Audit Oversight Board on Dec. 26 for failing to comply with the international standards on auditing when performing an audit of […]
As we begin to take a look back at the year that was 2019, one of the weird things public accounting firms were disciplined for this year by the PCAOB was for not disclosing that they’ve been the focus of a non-PCAOB disciplinary hearing. According to PCAOB Rule 2203, if a firm is a defendant […]
So say the folks at the Financial Reporting Council in the U.K., which fined Grant Thornton £650,000 earlier today for crapping up the audit of a publicly listed company in 2016. The name of the company wasn’t released by the FRC, which is bogus, and neither was the name of the engagement partner at GT […]
Ross Howard has joined fellow Deloitte partner Helen George as having received a “severe” slap on the wrist from the U.K.’s Financial Reporting Council for his role in the shoddy auditing of Serco Geografix Ltd., a subsidiary of outsourcing firm Serco Group PLC. Reuters reported: Britain’s accounting regulator said on Tuesday it had fined Deloitte’s […]
Three CPAs from a New Jersey public accounting firm most of you probably have never even heard of got their wrists slapped by the SEC on Sept. 30 for signing off on the audits of an IT company’s financial statements, even though the company’s CEO and CFO were perpetuating a massive fraud. Schulman Lobel Zand […]
A friendly reminder to audit firms: an auditor must maintain independence in both fact and appearance. Maybe PwC Mexico forgot this when it took over in fiscal year 2016 as the auditor of one of the largest financial services holding companies in Mexico. It just so happened that at the time the engagement letter was […]
While I was vacationing in South Carolina last week, word officially came down from across the pond about the highly anticipated fine KPMG U.K. would be receiving from a Financial Reporting Council disciplinary tribunal for bungling reports on Bank of New York Mellon Corp. The tribunal let KPMG off the hook, deciding on a fine […]
“Sell in May and go away” was an investors’ adage invoked as vacation strategy in a more genteel era. Returns in the summer were said to lag the rest of the year—and in any event, that’s how brokers justified their holiday cottages on the eastern seaboard. This year the maxim has twice failed my attempt […]
It was Deloitte’s turn on the Financial Reporting Council’s dunk tank today, as the U.K. regulator fined the firm and one of its partners over the audits of the 2011 and 2012 financial statements of Serco Geografix Ltd., a subsidiary of outsourcing firm Serco Group PLC, which were found to be complete rubbish. The FRC […]
The SEC made official today the news that Dave Michaels of the Wall Street Journal broke late last week, announcing that KPMG will pay $50 million to settle allegations that former partners “stole the test” by using confidential information that was being fed to them by a PCAOB insider to improve the firm’s performance on […]
Dave Michaels of the Wall Street Journal broke some huge news late last night about a huge fine the SEC could levy against KPMG later this month because of several former partners’ involvement in one of the biggest U.S. accounting scandals in recent years—stealing secret audit inspection information from the PCAOB. KPMG LLP is preparing […]
Oh look, a Big 4 firm other than KPMG got in trouble earlier today with the audit overseer across the pond. The Wall Street Journal reported: The Financial Reporting Council, Britain’s regulator for accounting and audit, on Thursday penalized PwC and partners Jaskamal Sarai and Arif Ahmad in relation to audits of the 2015 and […]
Man, I hope executives at Hertz got shitfaced on New Year’s Eve, because being told the company has to pay a $16 million civil penalty to the Securities and Exchange Commission to settle a case involving numerous accounting violations is not a stellar way to end 2018/begin 2019. An SEC cease-and-desist order filed on Dec. […]
A new timesheet policy being rolled out at KPMG U.K. is causing a little ruckus between employees and management. From The Guardian: KPMG has angered UK staff by threatening them with £100 fines if they submit their paperwork late. The accounting company said it would impose the penalties if staff were late to file their […]
The Hong Kong Institute of CPAs doled out some fines on Nov. 13 to Deloitte Touche Tohmatsu and a Deloitte CPA for making some auditing faux pas. The firm and accountant Lee Po Chi each have to pony up $50,000 HKD ($6,384 USD) “for their failure or neglect to observe, maintain or otherwise apply professional […]
Deloitte Canada scored a hat trick of sorts on Oct. 16, but I doubt it was celebrated among the firm’s management. The firm was censured and fined $350,000 by the Public Company Accounting Oversight Board on Tuesday for failing to maintain independence during its 2012, 2013, and 2014 audits of Canadian gold-mining company Banro Corp. […]
The Big 4 firms in the U.K. have been the target of repeated tongue-lashings from the Financial Reporting Council lately because, let’s face it, audits have been pretty damn bad. Things have gotten so desperate that EY is bringing in behavioral psychologists to improve audit quality. But the U.K. accounting watchdog’s most recent tongue-lashing wasn’t […]
When it comes to the Financial Reporting Council and KPMG audits, it must be like shooting fish in a barrel. This time, the U.K. accounting watchdog fined KPMG £2.1 million ($2.7 million) on Aug. 20 following the Big 4 firm’s admission of misconduct on the audit of fashion company Ted Baker Plc’s financial statements in […]
The Justice Department announced that Deloitte would pay a $149.5 million fine to put “potential False Claims Act liability” to bed for its role as the auditor of Taylor, Bean & Whitaker Mortgage Corp., the failed mortgage originator. Justice alleged that “Deloitte’s audits knowingly deviated from applicable auditing standards and therefore failed to detect TBW’s […]
PwC, the Big 4 accounting firm most likely to request a mulligan on 2017, has been censured and fined $1 million by the PCAOB for violations in its audit of Merrill Lynch. The PCAOB order follows a SEC action against Merrill from last year after the broker “held tens of billions of dollars” of customer […]
Remember last summer when Deloitte got itself wrapped up in a big international money laundering scandal? It was pretty exciting international intrigue-y stuff! The New York Department of Financial Services fined Standard Chartered bank $340 million last August for helping Iran move money around and now Cuomo & Co. have gotten around to holding Deloitte responsible […]
You've probably heard by now that escaped mental patient Michele Bachmann has suspended her campaign for president. While this is upsetting for many that stand proudly around the Bachmann couldron, the congresswoman should know that while voters all over Iowa were skipping over her name with ease last night, the Iowa City school district also […]
They were so unimpressed with it, in fact, that they are fining the firm $900,000 and partner David Shane $100,000 to settle up.
Mickey G’s issued an unqualified audit opinion for One World Capital Group’s 2006 financial statements and also stated that the company’s internal controls were just fine and dandy. Neither of these things turned out to be true. And when you read the CFTC’s press release, you really have to wonder if anyone was really auditing this company:
[T]he order finds that One World’s 2006 financial statements were materially misstated in various ways including: (1) the 2006 Statement of Financial Condition states that liabilities payable to all customers were over $6.9 million, when in fact information available in One World’s records showed that it may have owed at least $15 million just to forex customers alone, for whom One World served as the counterparty; and (2) the 2006 financial statements materially misstated the nature of One World’s business by failing to reflect that One World served as the counter party to its forex customers for over 90 percent of its business, according to the order.
In addition, McGladrey failed to report material inadequacies in One World’s accounting system and internal accounting controls, including the lack of a customer ledger, and an accounting system that did not properly identify the number of forex customers or the amount of customer liabilities, according to the order. These material inadequacies reasonably could, and did, lead to material misstatements in One World’s 2006 financial statements, the order finds.
David A. Costello, CPA, President & CEO and Michael R. Bryant, CPA, CFO of NASBA jointly and severally stated that NASBA’s 2010 financial statements did not contain any untrue material statements and their auditors, Lattimore Black Morgan & Cain, PC seconded that so obviously the following is all accurate. We looked ourselves. Not being professional financial statement ninjas, however, we invite you to take a peek for yourself here.
The good news for NASBA is that total consolidated revenue in Fiscal 2010 was $33.7 million compared to $31.4 million in Fiscal 2009, an increase of 7.3%. There were more CPA exam candidates as well as a new state added to NASBA’s CPAES program, which does the work of state boards of accountancy by processing CPA exam applications.
Interestingly, though my grandparents have been eating Alpo for the last two years thanks to Ben Bernanke and I’m earning a little under half a percent on my savings, NASBA must have a good investment banker because they did pretty well for themselves in FY 10. The annual report states that revenue from escrow management fees related to the CPA exam increased over the prior year and that higher interest rates, on average, during FY 10 were earned on these funds which are held in fully-insured securities or interest-bearing accounts. Can someone please let me know where these accounts are?! I want in.
But the most interesting part of NASBA’s mostly dull financial statements is the $300,000 “fine” Prometric paid them for violating its CPA exam agreement. Yes, the same agreement that was just renewed through 2024 with much fanfare last year.
The item is reported as “Income from Contract Issue” on NASBA’s consolidated financial statements and buried in note 12 thusly:
Note 12. Income from Contract Issue
As a part of the initial CBT Services Agreement effective May 31, 2002, Prometric was required to obtain and maintain insurance policies for certain specific perils, coverage amounts, terms and conditions naming the Association and its member boards as additional insureds. During fiscal 2010, the Association asserted that Prometric failed to comply with certain applicable insurance requirements. Prometric denied the assertions but, in resolution of the matter, provided evidence that it had come into compliance, agreed to indemnify, hold harmless and defend for any coverage lapses, and paid $300,000 to the Association. In addition, Prometric reimbursed the Association for certain legal and administrative expenses related to the resolution.
It doesn’t appear that NASBA declared the legal and admin expenses it also received so we’re assuming they were either immaterial or just embarrassing. Any financial statement detectives are welcome to come to their own conclusions.
A win is a win and the U.S. Second Circuit Court of Appeals handed one to John Larson, one of three defendants sentenced last year for selling illegal tax shelters. The Court “found Larson’s [$6 million] fine too high, citing a lack of jury findings to support a fine above $3 million. It returned that part of the case to the lower court to recalculate any fine.”
That’s more or less where the good news ends. The court did uphold the convictions of Larson and his two co-defendants – ex-KPMG Partner Robert Pfaff and ex-Brown & Wood partner Raymond Ruble. Larson was sentenced to a 10 year prison term last year. Pfaff received 8 years and Ruble 6-1/2 years.
Hopefully they’ll spread it around, you know, with lifetime memberships to: ladyboyjuice.com, kinkycomments.com, sexyavatars.net, cafebuckskin.blogspot.com et al.
Goldman Sachs has agreed to pay $550 million to the Securities and Exchange Commission, the largest penalty ever paid by a Wall Street firm, to settle charges of securities fraud linked to mortgage investments.
Under the terms of the deal, Goldman will pay $300 million in fines to the Treasury Department, with the rest serving as restitution to investors in the mortgage-linked security. Goldman will not admit wrongdoing, though it will admit that its marketing materials for the investment “contained incomplete information.”
That doesn’t sound nearly as fun but we understand a few people may have gotten hurt on this deal.