Good morning! I trust you enjoyed your three day weekend if you got one and are not wearing any white button-downs today regardless. Let’s get to some news.
In this news brief
Look, Auditing Hedge Funds Is Hard OK
Deloitte is getting sued, reports AFR:
Deloitte is being sued in the US by investors in collapsed hedge fund strategy Mars FX who allege that the accounting giant helped give credibility to a fund that reported hundreds of millions of dollars in assets before almost $US600 million went missing.
The lawsuit brought by investor Cohen New York alleges that Deloitte may have known that Mars FX executives were in breach of their fiduciary duties when it issued four consecutive years of unqualified audit opinions between 2020 and 2023.
Turns out someone at r/EBPAudits discussed this client in-depth a few months ago:
And Bloomberg talked about the fund back in April.
KPMG Knows All About AI Strategy That Creates Activity
KPMG published something about AI: Is your AI creating value or just activity?
KPMG would know! See also, this article in which we discuss how KPMGers were creating BS activity to comply with the firm’s AI usage rules:
Aussie Firms Rebuke Auditor Rotation While Regulator Digs Deep
Australian firms are against mandatory auditor rotation. Well, some of them are very against it while others are open to it in certain situations:
Accounting firms are pushing back against a federal government proposal to force companies to change auditors every two decades, but are willing to accept a requirement that listed companies put their audit contract out to tender at least once every decade.
PwC, KPMG and Deloitte warned it would be costly, risky and affect audit quality if Australia followed the United Kingdom and adopted British rules that demand listed companies change audit firms after 20 years. In contrast, mid-tier firms Grant Thornton and BDO support the move but only for large organisations that are important to the economy, known as public interest entities.
Meanwhile, the Australian Securities and Investments Commission (ASIC) is going to be busy for the foreseeable future:
Australia’s corporate regulator is examining 551 complaints of potential audit misconduct at the country’s Big Four accounting firms, a parliamentary committee heard on Friday.
“The volume that’s being produced is significant,” Chris Savundra, ASIC’s executive director of enforcement and compliance, told the Parliamentary Joint Committee on Corporations and Financial Services.
See what you started, KPMG?
Not a Great Year to Be Into Crypto
Crypto platforms, or rather their customers and wallets, are having a bad year, writes CNBC.
Security audits weren’t enough to keep many cryptocurrency platforms safe from money-losing hacks, crypto market data site CoinGecko said in a report dated Aug. 27.
Between January 2025 and July 2026, cryptocurrency platforms have lost more than $3.63 billion due to a variety of cyberattacks and stolen passkeys, the report said.
Around 88% of the stolen funds and about 60% of the affected platforms had “completed independent security audits,” the report said. It noted most of the attacks targeted areas that checks do not typically cover.
Hopefully the Fraud-Fighting Goes On Either Way
We’re fans of what Auditor Maestas and his people have been doing in New Mexico so this may be an election to watch:
The New Mexico Office of the State Auditor employs 35 people to root out financial fraud, waste or abuse in more than 1,000 public entities in New Mexico, from large state agencies to tiny political entities like acequias or municipal water systems.
The Nov. 3 general election for the office will feature incumbent Democratic State Auditor Joseph Maestas against Republican Joshua James Ryan Lawrence, a business owner and conservative activist who will appear on the ballot as a write-in candidate.
Whoever wins will inherit an office Maestas says public employees are increasingly turning to with credible fraud complaints, and one he says is stretched to complete its mandate due to limited state resources and fewer certified public accountants in the workforce.
Alright, that’s it. Email or text if you have a tip or story for us and have a great week!