• Latest

    Update: McKenna at the University of Chicago’s Stigler Center

    I’ve updated the post to point to some recent news about PwC and banks that failed in Ukraine and Spain… I returned to Washington D.C. and my job as a journalist at MarketWatch in late June, after almost three months as a Journalist in Residence at the Stigler Center at the University of Chicago Booth School of Business. My fellowship deliverable, in exchange for the opportunity to study with the researchers, was three posts for the Center’s Pro-Market blog on the state of the audit industry.

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    The Big 4 And Globalization

    At the Stigler Center Pro-Market Blog: Big 4 Lobbies Against SOx»

    The last time anyone attempted to “modernize” auditor independence rules it was the Securities and Exchange Commission, in 2000, before the Enron failure and Arthur Andersen’s demise, as a result of the growing concern that firms increasing focus on consulting was distracting them for their core purpose, auditing. The Big Four firms are now opportunistically lobbying to go back in time, before Enron, when the industry was self-regulated and mostly left alone, able to have as many conflicts of interest as their powerful public clients would allow.

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    The Legacy of Mary Jo White»

    Mary Jo White became the 31st Chair of the Securities and Exchange Commission on April 10, 2013. Last week she announced she would be leaving the job when President Obama leaves office. Here are some links to recent articles and a few choice ones from the past.

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    More On My Reuters Breakingviews Column: The Andersen Tax Name Grab»

    The news that a tax consulting firm made up of ex-Andersen partners would take the Andersen name garnered much media attention, as you might expect. It says something—but maybe not what the firm’s partners think— that so many years after the destruction of Arthur Andersen by criminal indictment—thirteen years—so many people care.

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    Where I’ve Been

    Speaking Engagements/Conferences»

    The Baylor MAcc program returns to Washington DC in October to drop in again to hear me talk about the latest in audit and accounting stories in the news. And in November during my Thanksgiving vacation I’ll be at University of Tennessee and a third visit to Marquette University. I’ll be talking at TEC in Las Vegas in September via video conference about non-GAAP reporting and the looming revenue recognition deadline.

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    NYSSCPAs Breakfast Briefing: Whistleblowing Under Dodd-Frank – Update»

    I’ve written at Forbes about the event, including some quotes from Sherron Watkins that made news. Links to a replay of the webcast and a live-blog of the event are included here.

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    McKenna Interviewed By The FCPA Compliance and Ethics Report»

    I was interviewed back in August by Tom Fox for his podcast on FCPA compliance and ethics issues.

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    The Case Against The Auditors

    More on KPMG and the Precedents for Possible Punishment»

    Why did they do it? The WSJ walks around the question but KPMG may face big fines and, I think, its partners and the PCAOB professional could face criminal charges.

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    KPMG Takes Its Turn With a Big 4 -Sized Scandal»

    The KPMG/PCAOB scandal is neither the first or last time a Big 4 firm reminded us that there’s nothing special anymore about being a Big 4 firm professional The firms, and their partners, are not capitalist eunuchs, immune from perverse incentives that advocates for free markets say, if big enough, can corrupt anyone.

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    Interesting Disclosures During TBW v. PwC Pre-Trial Period»

    The TBW v. PwC trial gave the public quite a few interesting disclosures about the audit industry and PwC, including some some pointing to how the firms’ finances, in this case PwC, work.

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    Your Career

    New research: Accounting students are not generally psychopaths but some slip through»

    New academic research says accounting students are less likely to be psychopaths who will commit fraud but surprising admissions by some suggest a reason to be wary.

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    PwC Settles Campbell Overtime Case; Impact To Profession Is Happening Now»

    PwC recently agreed to settle the Campbell v. PwC overtime class action lawsuit pending in California. I first wrote about the case on October 25, 2007. Here’s an excerpt from my wrap-up at Medium.com.

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    The Saga Of Stephen Glass: A Guest Post Morality Tale From Eric Starkman»

    Is it fair to “tar and feather” professionals when they are sued or only when they are convicted of crimes? How much time must pass before they can get on with their lives?

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    The Big 4 And Consulting

    Revenue Recognition is Coming: Part 2»

    I’ve been coaching my colleagues on how to spot updates and interesting anecdotes about revenue recognition during the second quarter earnings season. Now we are catching up on the Qs filed and comparing disclosures after concentrating on what was said in earnings releases and calls.

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    Revenue Recognition is Coming: Following the Progress at MarketWatch»

    Once I returned from my Stigler Center fellowship I got to work catching up on the new standard, talking to experts everywhere and working with Audit Analytics to come up with the data to support stories–by my and my colleagues–about companies and their response to the new standard. My goal was to pick some of the obscure topics that were unique or focused on a specific industry.

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    The NYDFS Case Against Promontory and the Bigger Problem of Big Four Bank Consulting»

    Bank regulators should start hiring the consultants that are responding to bank regulatory sanctions, consent decrees and NPA/DPA legal orders directly, and also strictly monitor them. It’s time to change for regulators to change their approach before another waste of time, money and public trust occurs.

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    Writing for Others

    @MarketWatch: IEX Becomes an Exchange»

    Word got out early that the SEC would approve IEX’s application to become a stock exchange on Friday the 17th. As usual, the leak traveled to the big media outlets earlier that week and then the rest of us waited for announcement from the SEC all day.

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    Duped By Fake Documents? All In A Day’s Work For Some Journalists»

    I could not resist writing at Medium.com about the teen trader who recently duped a journalist from New York magazine into believing he had made $72 million trading gold and other alternative assets. It’s not like auditors don’t get fooled every day by fake documents.

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    Update: The Shoemaker’s Children… The Big Four And Their Own Broker-Dealers»

    Did you know that each of the Big Four audit firms and some of the next tier also run SEC-registered broker-dealers? You’ll never guess who audits them.

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    You Can Quote Me On That

    Remarks at New York University Forum on Non-GAAP Metrics»

    Here are my remarks from the panel discussion on non-GAAP metrics I participated in onNovember 7, 2016 at NYU Stern.

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    The SEC On Non-GAAP Metrics: A Collection of Writing at MarketWatch»

    Stay tuned as the non-GAAP use comment letters to the companies who didn’t take the hint on their own or who took some prodding in written from to come around, start making it to EDGAR. Should make for some interesting fall reading.

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    @MarketWatch: Interactive Brokers Weathers Brexit Well»

    When I saw, as I was monitoring Twitter late Thursday night, that “Go” would prevail over “Remain” I came into work on Friday morning with a different idea for a story about Interactive Broker than I had originally planned.

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    Food for Thought

    A Happy Story About Housing»

    My MarketWatch colleague Andrea Riquier took a field trip to Indiana earlier this year on a tip about a group that helps people struggling to get their act together and prepare for home ownership. It’s a nice thing to see, given all the ongoing struggles many still have with jobs, finances and the challenges of this economy, especially in the heartland.

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    Peter Thiel’s Pursuit Of Technological Progress; It’s Not About Democracy and It’s Definitely Not About Capitalism – Part 1»

    Peter Thiel is no philosopher or a new era public intellectual. Thiel is, instead, the embodiment of a technocratic elitist and libertarian individualist with one goal: growth in wealth. This is part 1 of a paper about Thiel I wrote recently for a class in the Masters of Liberal Arts degree program at the University of Chicago.

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    Peter Thiel’s Pursuit Of Technological Progress; It’s Not About Democracy and It’s Definitely Not About Capitalism – Part 3»

    As a journalist, a reporter, I sometimes have to read things I would not otherwise. My luxury as a freelance journalist has been to write what I want, for whom I wish, when I want, and charge what the market will bear. Nothing lasts forever.

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