PwC’s Tom Seymour Just Stepped Down Because He Was On a Naughty Email Chain (UPDATE)
Ed. note: On May 15, 2023, one week after former CEO Tom Seymour vacated his role, PwC announced he will retire on September 30. While most of us were sleeping, PwC Australia was starting its Monday minus one CEO. Tom Seymour has stepped down following a board of partners discussion after it was revealed last […]
KPMG Mexico Could Be Facing Fine of Up to $1.6 Million For Huge Data Leak Blunder
Mexican authorities said KPMG Mexico could be fined as much as 30 million pesos (about $1.57 million) for exposing the confidential payroll data of employees at 41 of its clients, which was housed in an unsecured database that wound up on the Internet. According to El Economista, the National Institute of Transparency, Access to Information […]
Apparently KPMG Mexico Exposed Some People’s Personal and Tax Information For All the World to See
Just when you thought things couldn’t get any worse for KPMG, we have this news coming out of Mexico. And it seems really bad. José Soto Galindo of El Economista reported (translated from Spanish): A group of software developers of KPMG Mexico downloaded without authorization from their holders digital tax receipts from the Tax Administration […]
Six KPMG Employees Fired After Leak of PCAOB Inspection Info
Updates to report that individuals were terminated appear throughout. Welp, this looks bad. The Wall Street Journal reports that six KPMG employees, including four partners and the firm’s head of audit, have been fired after a PCAOB employee leaked confidential inspection details to the firm. The departing KPMG employees include four partners and Scott Marcello, […]
Hopefully a PwC Employee Doesn’t Get in Trouble for Leaving Their Work Lying Around
Here's a doozy. The Pittsburgh Post-Gazette reports that PPG Industries may sell its flat glass business to Mexico-based Vitro, SAB de C.V. This according to "a document obtained by" the paper: A PPG spokesman this afternoon declined to comment on a possible sale, which is mentioned in an undated reference contained in a draft copy […]
Sony Hack Also Leaked Deloitte Salaries, Reveals Gender Gap
We haven’t reported on the Sony hack yet because it has absolutely nothing to do with public accounting. Until today.
China Freaks Out Over Five CPA Exam Questions Illegally Posted to the Internet
Can you guys imagine what would happen if this were to go down in the good old USA?
According to China Daily, answers to China’s national accounting exam (similar to the CPA exam in that it’s an exam professional accountants take to work in accounting, duh) were leaked over the Internet last week and some are concerned that this unfortunate turn of events might erode trust in the exam and – worse – the profession. As if China’s sketchy accounting practices didn’t already achieve as much.
Answers were posted to an Internet forum just before the 2011 Chinese National Uniform CPA Examination was to be taken on September 17 and 18.
Here in America, CPA review providers are given retired CPA exam questions to distribute to their students but are not allowed to share actual exam content. Not like they’d know what’s on the exam anyway – many major review course providers haven’t taken the CPA exam in 10, 15 or even 20 years. Back in those days, they’d hand out copies of old exams to study. Like actual exams. Since the CPA review crew is a close-knit bunch of OGs, it’s highly unlikely that any one of them would risk their close relationship with the AICPA to hand out exam questions to needy students.
In China, a former writer of architect exam questions was sentenced to 18 months in prison for leaking state secrets after he was caught giving his students copies of exam questions during tutorials. Different world, eh?
Anyway, according to the few Chinese media reports we’ve seen, five audit multiple choice questions and answers were posted to the Internet and the Chinese CPA exam folks are understandably in a tizzy over this. To put it in perspective, their audit section consists 47 questions worth a total of 105 points, and candidates must answer at least 60 correct to pass. So really? Five questions?
That’s not all. Apparently some candidates received texts asking if they might be interested in, er, peeking at the upcoming exams’ content.
“I began to receive at least five text messages a day selling exam questions a month before the exam took place. All of them claimed they could provide genuine questions and answers. They also promised a full refund if the questions were not genuine,” 28 year-old Zhu Hua told China Daily. “I wonder how they got my number in the first place, because I only provided my contact information when I registered for the exam.”
Was this an inside job?
The Chinese Institute of Certified Public Accountants (CICPA) has sworn to conduct an investigation into the leaks and to prosecute anyone found to have leaked this information to the full extent of the law. Prepare for hangings, people, this is serious shit.
Who Leaked the MLB Financial Statements?
This morning we mentioned the Deadspin story that presented leaked financial statements of several Major League Baseball teams. This included the Pittsburgh Pirates who have had 18 straight losing seasons yet remain profitable – making $14.4 million and $15 million in net income for the fiscal year ended October 31, 2008 and 2007 respectively.
The Seattle Mariners financials are also now available and the Texas Rangers numbers will be rolling out tomorrow, so there’s plenty of financial analysis treasure hunting for you to engage in, if that’s your thing.
F is is unprecedented access to the teams’ financial position and performance, PLUS! all the wonky details of their Summary of Significant Accounting Policies – everything from revenue recognition to prepaid signing bonuses, guaranteed contracts, so on and so forth.
However, it also includes details that give insight into MLB controversial revenue sharing program, such as the Pirates using $44 million in ’07 and ’08 to develop players, as reported by the New York Times. With the lowest payroll in baseball and perpetual loserness, baseball fans in the Steel City might rather see that money spent on some free agents so they have something to discuss between the hockey and football seasons.
But perhaps more importantly, the Times reports that MLB is not taking this breach lightly. Since these teams are privately held, the information is not widely shared and the suspects are few:
Access to the teams’ audited financial statements is usually limited to the commissioner’s office; baseball’s lead bankers, Bank of America and JPMorgan Chase; and two accounting firms, Ernst & Young and PricewaterhouseCoopers. But [Florida Marlins President David] Samson said that “in the course of business, other entities have access.” Teams do not see one another’s financial reports, but receive a general accounting of where they rank compared with the other 29 clubs in profitability.
Of course this is the point in the post where you’d expect us to point the finger at E&Y or PwC but in reality, it seems unlikely that the leak would come from either firm. Likewise, it doesn’t make much sense for it to have come from BofA or JP Morgan. All these firms no doubt boast the services they provide to Major League Baseball and any professional servicing those clients wouldn’t dare risk damaging their firm and their career by exposing sensitive financial data of such a high profile client. Does it really make sense for an E&Y/PwC/BofA/JPM employee to leak the financials to Deadspin on a whim?
The leak has to be from within the commissioner’s office. First of all, someone there has the access to all these records and it is extremely more likely that Deadspin has sources in the commissioner’s office that would be willing to leak the information (especially teams no one gives a shit about). Secondly, we shouldn’t forget that baseball has had its share of squealers. There’s no reason to believe that the whole sport isn’t infested with them.
And as we mentioned – who gives a shit about the Pirates, Mariners or Marlins? These are low payroll teams whose financial information doesn’t cause much of a stir other than the fact that this is first time the data has been available to the public at large. If someone really wanted to bomb the hell out of us, the Yankees, Red Sox and Cubs financial statements would have been leaked and then the disparity (financial and thus, competitiveness) between the teams would really on display.
Baseball Chases Leak of Financial Documents [NYT]
MLB Confidential, Part 2: Seattle Mariners [Deadspin]