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The Risky Business of Being A Bank Chief Risk Officer
It’s difficult for me to imagine a new generation of systemically important financial services company CEOs without strong risk management experience. But the newly prominent role also gives shareholders, regulators, and the media an easy target for ridicule after a corporate stumble or failure.
The Big 4 And Globalization
How Do You Hide A Multibillion Dollar Loss? Accounting For The Olympus Fraud»I asked CPA and blogger Jim Ulvog to write a guest post on the Olympus scandal because he was the only one to explain it to me from an accounting perspective. An investigative report prepared by auditor Ernst & Young Shin Nihon – yes, the one that missed the fraud – is a scathing indictment of the company and others potentially complicit in the multi-year subterfuge.
@Forbes: Judge Slams Centro Directors But PwC Will Answer Too»
I wrote this post about a month ago for Forbes.com and my column, “Accounting Watchdog” on a very important legal decision related to a real estate company, Centro, in Australia. Centro’s auditors were PwC.
Not Over Until It’s Over: Price Waterhouse India Settles Satyam»
It’s the potential for sudden conflagrations in developing countries that keeps the global audit firms – PwC in this case – up at night. The legal quagmires in developed countries are messy, too. PwC may want to put the Satyam scandal behind them but, unfortunately, I fear there’s still much more pain for the firm to come.
Where I've Been
Upcoming Speaking Engagements and Conferences»Information about upcoming speaking engagements and conference attendance.
Visit To James Madison University»
I had the pleasure of visiting James Madison University on November 15-16 to meet with faculty in the School of Accounting, some student groups and to speak at the Beta Alpha Psi Initiation Dinner.
Now Available: A New e-Book on Careers In The Big Four»
Available now on the Kindle: re: The Auditors on Careers: A Compilation On Recruiting, Salaries, and the Competitive Employment Landscape
The Case Against The Auditors
At Deloitte, More Pain Before Any Quality Gain»re: The Auditors has seen a confidential, internal Deloitte training document, prepared this past summer, that reveals the firm expects the worst when the inspection reports for their 2009, 2010, and 2011 audits are published by the PCAOB. Is Deloitte truly committed to a sea change in tone as well as technique? I’m not convinced.
MF Global: Where Is The Missing Money?»
Almost everyone wondering where the missing MF Global customer assets have gone thinks they will show up eventually. I believe the assets are long gone.
PCAOB Disclosure Of Deloitte Private Report: A Regulatory Inflection Point?»
My American Banker column on Tuesday focused on the risks to banks, their audit committees, and shareholders of an auditor who blows off its regulator. Deloitte’s ongoing conflict with the PCAOB poses the risk of undue scrutiny by other regulators and unwanted publicity to all its clients.
Your Career
Madoff, MLK, Buddha And Elusive Nature of Self-Interest»
Your first obligation as a professional is to your client, not your firm, your partners, or even your family.
Will More Women Mean Better Audit Firms?»
This column originally appeared in Going Concern on June 16, 2010.
From the Chicagoland Chamber of Commerce website:
Deb [DeHaas] is the vice chairman and Central region managing partner for Deloitte LLP, which includes 23 offices across 12 states. With 9,000 professionals, Deloitte is the largest Big Four organization in the region. In this role, Deb leads [...]
In Memoriam – Roberta Gilna Merkel»
Executive search is a lot like the real estate business. Headhunters, with very few exceptions, like realtors, are getting paid by the seller or the company that is selling the job that you, as a candidate, are buying. The best ones manage this ethical dilemma well, especially when the compensation package, like the purchase price of [...]
The Big 4 And Consulting
KPMG Nixes GE Loaned Tax Staff Engagement»KPMG will no longer loan tax professionals to GE during busy season, according to a source close to the situation. KPMG was billing an extra $8-10 million, over and above the audit each year, for the service.
Loaning, assigning, or “seconding” tax or any “bookkeeping” staff to an audit client is prohibited by the Sarbanes-Oxley Act of [...]
Update: Mortgage Servicer Foreclosure Review Process»
I was the first to report on December 6 the irony of Deloitte having been selected by, of all banks, JP Morgan Chase. The high likelihood of a conflict between the bank and the audit firm, and possibly the individual Deloitte partners assigned to the JP Morgan Chase review, should have been obvious to anyone at the OCC. It turns out I was right.
Servicing The Mortgage Industry: An Update»
My October 6 column for American Banker was cited by Congresswoman Maxine Waters and others to support the strong management of conflicts of interest by the OCC in the mortgage servicer reviews as well as full disclosure of vendors and their engagement letters with the banks. On November 22, 2011, the Office of the Comptroller of the Currency (OCC) disclosed the names of the consultants, their clients and redacted versions of the engagement letters between the banks and consultants.
Writing for Others
Reminiscing About The First Too Big To Fail Bank – Continental Bank»It’s the 175th anniversary of American Banker this year and my editors asked me to write something about my experiences at Continental Bank, my first job.
There were some parts we had to cut so I thought I would put them here.
“The men and women of Human Resources that I worked for during college taught me [...]
A Book Review: Models.Behaving.Badly. By Emanuel Derman»
One of the wonders of Twitter is the people you meet.
You can write the tool off as talk, talk but it’s been a wonderful window to new worlds for me. People I would have never imagined knowing are in my life because we can gauge common interests passively. Which interests you reveal are entirely of [...]
McKenna Now Writing At American Banker»
I’m writing now for American Banker. My first column covers a new appointment at Deloitte and how this might affect the firm’s clients in the mutual funds industry.
You Can Quote Me On That
MF Global: 99 Problems And PwC Warned About None of Them»My latest column is up at American Banker, “Are Cozy Ties Muzzling S&P on MF Global Downgrade?” You may recall the last time I wrote about MF Global. Something about a “rogue” trader.
Hello? Big 4? Are You Out There?»
This post was originally published three years ago on September 17, 2008. Given everything that is going on – ongoing investigation of EY’s role in Lehman collapse, more lawsuits against the Big 4 audit firms for crisis failures, disclosure of Deloitte’s failings as an auditor as far back as 2006 – I thought it may [...]
The Berkshire Hathaway Corporate Governance Performance»
The next time something goes terribly wrong at a Berkshire Hathaway company, there’s a strong possibility no one will hear about it. Warren Buffett and Charlie Munger won’t be held directly responsible either. That’s the beauty of Buffett’s version of a conglomerate corporate structure, decentralized to such an obscene level such that its minimalism is brandished as a feature not a bug.
Food for Thought
MF Global Updates: Forbes, American Banker»Amazing but true, the MF Global story is still red hot, reason being $1.2 billion in customer funds is still missing. Here’s a recap of recent columns at Forbes and American Banker that have tracked new developments.
MF Global Mystery: The Beginning of the End or the End of The Beginning?»
Lots of news and updates on MF Global, PricewaterhouseCoopers, JP Morgan, Jamie Dimon and the politics of money.
The Plot Thickens: The House Financial Services Committee MF Global Hearing»
View the story “The Plot Thickens: The House Financial Services Committee MF Global Hearing ” on Storify]
Francine McKenna (@retheauditors) has more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad. Look for my column, 