• Latest

    New Stories about the KPMG-PCAOB Scandal

    “Innovation demands risk-taking… which, in turn, entails redefining failure, stripping away its power to inhibit.” Chairman and CEO of KPMG Lynne Doughtie

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    The Big 4 And Globalization

    McKenna Interviewed On KPMG And FIFA By The Bottom Line Canada»

    I was interviewed by The Bottom Line magazine in Canada back in June on KPMG’s role as auditor of FIFA.

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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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    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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    Where I’ve Been

    McKenna at Grant’s Interest Rate Observer 35th Anniversary Conference»

    It was a great conference and I have now posted the slides.

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    Speaking Engagements/Conferences»

    I did it! October 9, 2018 Grant’s Interest Rate Observer 35th Anniversary Conference in New York at the Plaza Hotel. Slides are posted. Another visit to Ohio State and a return to DC by the Baylor MAcc program on Tues Oct 16. Also on the agenda CalCPAs annual conference in LA, a visit to Loyola Marymount and Thanksgiving holiday visit again with my friends at Marquette U. MAcc.

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    McKenna at The Frunchroom»

    She’s a native South Sider, and she definitely traveled the longest distance to be at the show at Beverly Arts Center. Guess who?

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    The Case Against The Auditors

    Update: KPMG: The Indictments»

    The mystery outside consulting firm that helped KPMG analyze the data Brian Sweet andCynthia Holder allegedly brought over from the PCAOB is no longer a mystery. It’s Palantir. It is still a mystery why any firm like KPMG, who touts a new KPMG MAcc focused on data analytics, would have to hire an outside firm to crunch data. That’s unless KPMG is not the only firm that used this outside consultant, and the effort to improve inspection results was a joint effort of more than one firm. I’d love to hear more about why KPMG needed Palantir. Leave a comment here, one I can leave unposted, if you wish to communicate confidentially or DM me on Twitter @retheauditors for Signal encrypted confidential messaging instructions.

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    Another Update on the Case of FDIC v PricewaterhouseCoopers re: Colonial Bank»

    On February 28 the US Justice Department fined Deloitte & Touche LLP $149.5 million for alleged fraud against the government related to its role as the independent outside auditor of Taylor, Bean & Whitaker Mortgage Corp. Also: The damages phase of the FDIC v. PwC case regarding Colonial Bank is set to begin in Washington DC on March 20.

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    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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    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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    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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    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 Big 4 And Consulting

    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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    “Tax Avoidance On An Industrial Scale” Says British MP About PwC’s Luxembourg Work For AIG And Others»

    British MP Margaret Hodge grilled Kevin Nicholson, of PwC’s UK tax practice, in a Parliament Public Accounts Committee hearing on Monday. You know you’re on your “back foot” when the first thing out of your mouth has to be a denial that you lied under oath. More details about PwC’s tax avoidance scheme for audit client and US government owned AIG.

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    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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    Writing for Others

    Mick Mulvaney, the CFPB and a “thing”»

     Warning:  Coarse language, because we may get a lot of snow in Chicago but we’re no snowflakes. Last week I went to an American Bankers Association Conference for bank government relations executives. I wrote a story about some things that Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau (and also a cabinet member […]

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    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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    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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    You Can Quote Me On That

    Gee! No, GE!»

    A wrap-up of writing about GE since 2011.

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    Mick Mulvaney, the CFPB and a “thing”»

     Warning:  Coarse language, because we may get a lot of snow in Chicago but we’re no snowflakes. Last week I went to an American Bankers Association Conference for bank government relations executives. I wrote a story about some things that Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau (and also a cabinet member […]

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    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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    Food for Thought

    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 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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