Protip: Double-Check What You Wrote Before You Confirm Your Interview By Text
Anyone who has taken Roger for CPA review knows his tired old joke in partnerships about the partner he went home with — he is still telling that joke, isn't he? — but this is not that. Awkward. via Pinterest
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 […]
Ernst & Young’s PCAOB Inspection Results Look Even Worse in Chart Form
Last week, we discussed just how bad EY's auditing had gotten from a PCAOB inspection report perspective. And with a failure rate of 48% we can all say, "That sucks, EY," with the utmost confidence. Yet, nothing in the PCAOB inspection report or anything we wrote last Tuesday sums things quite like this chart from the […]
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."
Last Year Was a Very Unfortunate One to Be Wealthy and French, Even By French Standards
More than 8,000 French households' tax bills topped 100 percent of their income last year, the business newspaper Les Echos reported on Saturday, citing Finance Ministry data. The newspaper said that the exceptionally high level of taxation was due to a one-off levy last year on 2011 incomes for households with assets of more than 1.3 […]
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 […]
Baker Tilly Found Liable in Aqua Finance Lawsuit; Ordered to Pay $50 Million
This slipped by us last week, but after noting last Thursday morning that a lawsuit against Baker Tilly for $327 million was nearing its end, we found this story from late on Thursday reporting that BT had lost the suit to Aqua Finance. Aqua Finance accused its former accounting and advising firm of negligence and breach […]
McGladrey’s PCAOB Inspection Report Is Pretty Awful
The PCAOB continues tearing through audit firms like a Texas twister on a random Tuesday during tax season, as it unleashed its fury on McGladrey yesterday. How bad was it? Well, Deloitte can certainly feel better about itself. The Board reported deficiencies in nine of the nineteen (~47%) audits inspected. Deloitte, if you remember, had […]
You May Not Be Cut Out for Accounting When: You Double Up on For-profit College Debt
It's so sad to read these stories but I am convinced this is a real person and not some made up front for the conspiracy against for-profit schools: I attended DeVry University for over two years. However, in 2010, I had to drop out because I was told that I was going to go over […]
USANA Health Sciences Hits the Superfecta as President, CFO, COO and EVP of Sales All Bolt
Nothing like this to get your investors a little worked up:
USANA Health Sciences, Inc. […] today announced that Fred W. Cooper, President and Chief Operating Officer; Jeffrey A. Yates, Chief Financial Officer; and Mark H. Wilson, Executive Vice President of Sales have each stepped down from their respective offices to pursue other business endeavors. […] Continuing on the realignment of the executive team, [CEO Dave] Wentz said “I also want to offer Fred, Jeff, and Mark our sincerest appreciation for their years of service to USANA. We wish them well in their future endeavors.”
Of course it could be that these guys had a foursome at Pebble Beach they weren’t about to reschedule OR they knew there was going to be openings at Novartis. Other theories are welcome. PwC’s Salt Lake City office serves as USANA’s auditor so if you’ve got the scoop or heard something interesting, email us.
PCAOB Permanently Bans Utah Accounting Firm, Ex-Managing Partner From Auditing Public Companies
The PCAOB has just made a serious example out of Bountiful (yes, it’s a town), Utah-based Chisholm, Bierwolf, Nilson & Morrill by banning the firm permanently from auditing public companies after “numerous violations of professional standards, including failure to detect fraud.” The Board also barred former managing partner Todd Chisholm for life and partner Troy Nilson for five years.
Curious about what kind of shoddy work the firm performed to get such a slap? Us too. Luckily the Salt Lake Trib has an example:
One of the companies that the firm audited was Powder River Petroleum International Inc., an Oklahoma corporation with offices in Alberta, Canada.
Until it was placed into receivership in 2008, Powder River’s public filings reported that it acquired, developed and resold interests in oil and gas properties. The company resold interest in oil and gas leases to investors in Asia, but reported those investments as income despite also promising investors a return of 9 percent until their principal was recouped, the board said.
That resulted in the company, traded over-the-counter, overstating its revenue by up to 2,417 percent, its pretax income up to 441 percent and assets up to 48 percent.
I called the PCOAB to see if this was the most severe ban every given to a firm and a CPA but couldn’t get an immediate answer. The five year ban also seems pretty severe. Doesn’t seem like too much of a stretch since the Board has only issued 36 disciplinary actions since 2005. I’ll update the post when I get some definitive answers. UPDATE: We’ve been informed that “it’s among the most severe” penalties issued.
It’s also worth noting that two of the firm’s clients – Hendrx Corp. and Jade Art Group – had substantial Chinese operations which wouldn’t be an issue if it wasn’t for this, “Chisholm, who does not speak or understand Chinese, relied on Firm assistants with Chinese language skills to identify audit issues, communicate with management and third-parties, and analyze documents provided by the issuer.”
Maybe those “assistants” were audit wizards, maybe they weren’t but either way, Mr Chisholm might be looking to change careers.
KPMG Global Revenue Drops 11.4%
The wait is over Klynveldians. Your firm’s revenue results are out and — not to put fine a point on it — they’re disappointing.
The press release has the typical spin that we’ve come to expect from the Big 4 bigiwigs as Tim Flynn focuses on the, ‘high growth markets’ and the opportunities that arise out of ‘a markedly changed regulatory environment’ (code for: “Democrats are in power”).
These “opportunities” are noted but the numbers speak for themselves. As Big Four Blog notes, “A drop in revenue was expected, the surprise was the magnitude of the drop, which was higher than other Big4 firms.”
From the press release:
KPMG, the global network of professional service firms providing Audit, Tax and Advisory services, today announced member firm combined revenues totaling US$20.11 billion for the fiscal year ending September 30, 2009, versus US$22.69 billion for the prior fiscal year, representing an 11.4 percent decline in U.S. dollars.
“While overall revenue results for the 2009 fiscal year reflected the global economic downturn, we were pleased that our continued investments in high growth markets resulted in continued growth in those country member firms,” said Timothy P. Flynn, Chairman of KPMG International.
The drop in revenues breaks down like this:
• Audit – $9.95 billion in FY09 versus $10.69 billion in FY08, a 6.9% decline in U.S. dollars.
• Advisory – Revenues of $6.07 billion in FY09, versus $7.27 billion in FY08, a 16.6% decline in U.S. dollars.
• Tax – $4.09 billion in FY09 compared with $4.73 billion in FY08, a 13.4% decline in U.S. dollars.
The numbers certainly speak to the tough year that KPMG professionals have witnessed through many rounds of layoffs and several shake-ups that appear to be part of major restructuring in the U.S.
So now that the 2009 earnings season has come to a close, all the firms can focus on making 2010 less crappy. That should be breeze. We shall see. If you’ve got thoughts on the Radio Station’s year, or want to talk about how psyched you are for 2010, discuss in the comments.
KPMG reports 2009 revenues of US$20.1 billion [Press Release]
See also: KPMG 2009 Revenues of $20 B Drop 11%, Most Among Big Four Firms [The Big Four Blog]