Latest

New At Forbes Online: The Precarious Financial Position Of The New York Times

Update: This column was linked to by the NYT Public Editor! I published some New York Times numbers over at Forbes.com, “Time Is Running Short For The New York Times”, in anticipation of the company’s 3Q earnings announcement on October 30.

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The Big 4 And Globalization

A China Fraud Dissected: Part 3 AgFeed’s Trusted Advisors Protiviti and Latham & Watkins»

Company executives and directors like to believe they can purchase a posse of “trusted advisors”. Instead, they’ve often only bought a gaggle of self-interested auditors, lawyers, and consultants. But to whom does each of those vendors owe loyalty?

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A China Fraud Dissected: Part 2 AgFeed’s Auditors»

AgFeed had the benefit of two PCAOB registered and inspected audit firms. There is no indication on either the SEC or PCAOB website of an investigation of either for what happened at AgFeed. Is this one going to end badly, too, like the Gately case?

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A China Fraud Dissected: Part 1 Milton Webster, AgFeed Audit Committee Member and Whistleblower»

It is highly unusual for a board member, especially an audit committee member, to be a fraud whistleblower for a public company. Milton Webster, a former AgFeed director, did it but he, unfortunately, won’t be around to see the result of his significant social and professional sacrifice.

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Where I’ve Been

Speaking Engagements/Conferences»

The fall agenda is filling up – a trip to Washington DC next week for two great conferences, a PCAOB SAG meeting in November in DC, but first a speaking engagement at UIC this weekend. Don’t forget back-to-back, Springfield and Chicago, for the Illinois CPA Society on auditor litigation.

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Reminiscing About The First Too Big To Fail Bank – Continental Bank»

There’s a conference planned for next week, May 15, at Gleacher Center in Chicago, “30 Years After the Failure of Continental Illinois Bank: Have We Solved Too Big to Fail?” I wrote about my experience at CINB, my first job, for American Banker back in 2011.

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Guest Lectures At Stanford Graduate School Business»

My notes for guest lectures (there were two sections, back-to-back) February 10, 2014 for Bus F332/Law 725, Finance and Society, at Stanford University Graduate School of Business, taught by Professor Anat Admati. Emphasis: The auditors’ role in corporate governance in financial institutions and specifically how auditors not inadvertently stifle the actual use of compensation clawbacks.

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The Case Against The Auditors

Piling Up For PwC»

Update: The PCAOB is investigating PwC for its tax avoidance advice to Caterpillar, the Wall Street Journal is reporting. One down, more than 100+ PwC audit clients advised via Luxembourg to go…

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18-Year Old Anthony Canalungo Questions Herbalife, And PwC, On Exchange Rates»

Anthony Canalungo wrote a really interesting article about Herbalife’s financials in Venezuela. Three different MLM companies from the peer group in addition to Herbalife operating in Venezuela and all except for Herbalife are using SICAD 2. What else do these four firms have in common? Auditor PwC.

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Auditor Independence: Another Case of Misplaced Loyalty»

Ryan Adams testified on behalf of PwC in an important court case. How can PwC be independent of Adam’s employer Marin Software, and Adams, the Financial Reporting Director at this newly public PwC-audited client company, if he’s testifying on PwC’s behalf in litigation that could impact PwC’s business model in California and, perhaps, nationally?

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Your Career

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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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.

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An Interview For The Society of Professional Journalists Region 1 Conference»

David Levitt of the Society of Professional Journalists Region 1 in New Jersey
asked me back in April to answer a few questions for a conference panel I, unfortunately, could not attend live.

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The Big 4 And Consulting

Luxembourg Tax Leaks Put PwC On The Defensive»

My latest column at Medium.com responds to PwC’s #LuxLeaks defenses: Illegal docs, legal advice. I also raise the obvious auditor independence issues which no one else is reporting.

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PwC Put Guy Who Whitewashed For Bank In Partner Spot»

The NYDFS PwC investigation discovered several emails that Benjamin Lawsky, the Superintendent of Financial Services for New York, characterized Monday as examples of a consultant going along with a “whitewash”.

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Big Four Takeovers Raise Concerns: McKenna Featured In “The Bottom Line”»

The August issue of The Bottom Line in Canada includes quite a few quotes and a nice color photo of me in a story about the wave of new consulting firm acquisitions by Big Four audit firms all over the world.

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Writing for Others

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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McKenna At Medium: Two New Columns For the Bull Market Collection»

I’m part of a group effort at Medium.com called “Bull Market”. The first two columns are about taxes—the inversionist avoidance kind and one corporation’s horrible allergy to them.

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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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You Can Quote Me On That

Support This University of Notre Dame Accounting Grad Salary Survey!»

The University of Notre Dame is conducting a large-scale study to explore accounting graduates’ first full-time employment positions and starting salaries following a degree in accounting. It doesn’t matter how long ago you graduated. All are welcome. Will you help?

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SEC’s Final Pay Rules Coming Any Day: Will They Be Enough To Level Playing Field?»

Senator Robert Menéndez [D-NJ], author of the Dodd-Frank pay ratio disclosure rule, didn’t take “not yet” for an answer when SEC Chair Mary Jo White testified before the Senate Banking Committee in late July a year ago. Menendez told White: “I’ve been waiting for several years now.” (Me, too!)

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Fannie Mae And Freddie Mac Are Back: More “Adjustments”, More Calls For Reform»

“If accounting errors were felonies in California, Fannie Mae would already be serving life under Three Strikes.” That’s what GoingConcern.com said. See what I told TheStreet.com about Fannie Mae’s latest multi-billion dollar “adjustments”.

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Food for Thought

You’ll Never Eat Lunch… A Review of “This Town” By Mark Leibovich»

Mark Leibovich’s “This Town” is billed in the flap copy of the dust jacket as “a blistering, stunning —and often hysterically funny— examination of our ruling class’s incestuous ‘media industrial complex.’” Does anyone still eat lunch with him? In the new 24-7 news cycle, the half-life of any criticism of DC culture is about three days.

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Three Book Reviews: Naked Bankers, Mute Watchdogs, And Youthful Luchre»

Just in time for summer vacations, I’d like to offer for your consideration three books I’ve recently read.

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An e-Book: Warren Buffett and Berkshire Hathaway: Corporate Governance and The Sokol Affair»

This compilation covers the period from April 4 – when the David Sokol scandal hit – to May 3, 2011 when I attended the Berkshire Hathaway Annual Meeting in Omaha, Nebraska.

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