The Big 4 And Globalization

If any doubts remained that PricewaterhouseCoopers International Limited, the international global network “coordinating” firm, does the bidding of its largest and most powerful member firms – primarily PwC US and PwC UK – the latest “restructuring” in India should dispel them. PwC US and PwC UK want to be closer to their money.

The Supreme Court will hand down their decision on Free Enterprise Fund v. PCAOB before on June 28th. Congressional action may be necessary to reestablish the PCAOB or a comparable regulatory authority within the SEC, if we want to continue independent regulation of the audit firms. I have some recommendations for a new PCOAB law.

There are so many corks popping in the UK, hitting them in the eyes, audit firm leadership is actually trying to preempt. They’re shaking in their £1000 bespoke leather slip-ons. Well, not really.

Maybe their bottom lips are quivering a bit in quiet indignation.

You Can Quote Me On That

I was linked to March 23, 2010 in the Times of London UK on the Lehman story as the source for EY’s response to audit committee members regarding the Lehman bankruptcy examiner report.
Ernst & Young defended its work in a letter sent by several audit partners to the firm’s key clients and vowed to fight [...]

Neil Weinberg, Executive Editor of Forbes magazine, interviewed me on April 20th in New York.  We talked about the biggest banking bankruptcies, the value of a good bankruptcy examiner’s report and the high cost and diminishing value of the auditor’s opinion.
Look for more from me, and Forbes, on these issues soon.

Paul Barrett of Business Week wrote a great profile last week of Senator Ted Kaufman, Vice President Joe Biden’s replacement in the US Senate for Delaware.
I was quoted twice.
Some proponents of stricter financial oversight see Kaufman, an obscure back-bencher, as an unlikely hero. “It’s so rare for an appointed senator to do so much, so [...]

Your Career

First paycheck. After taxes it’s not a big as you’d hoped. $72k is pretty good money but not the mother lode, for sure. If you weren’t living in one of the most expensive cities in the US it would go a lot farther. But at least you’ve got a roommate to share the burden. Working so many hours leaves little time for shopping, boozing or investing…

My new column is up @Going Concern.
Do sheer numbers mean women will now gain equality or even the upper hand in the workforce? Will this influence permeate all areas of professional life or only the ones that men allow?
Hanna Rosin was a guest last night on The Colbert Report. She’s a Contributing Editor for The Atlantic and [...]

This piece posted in full by permission of my friend Rob Nance, Publisher of Accounting Web, Inc. They can be found on Twitter and Linked In.
“When life hands you lemons, make lemonade,” so goes the saying. My business trip to the UK was cancelled today (and for the unforeseeable future) due to Iceland’s volcanic [...]

Where I've Been

I’ll be in Washington, DC the next few days to attend, primarily, the SEC and PCAOB Open Meetings on Wednesday and Thursday, respectively.

See you there!

Your firm can benefit from the recent focus on the Big 4 audit firms. The audit/accounting industry will be in the news for a long time coming and re: The Auditors will be there to cover it. Would your firm like to sponsor my appearance at an upcoming conference or event and coverage of those events?

There’s quite a bit on my plate while I’m here in Washington DC this week for the Compliance Week Annual Conference.
I’ve brought my sharp pen and stilettos to the the Mayflower Hotel, where I’m resting comfortably and waiting for the kickoff reception tonight.  This is my fourth year covering the conference for re: The Auditors [...]

Writing for Others

My new column is up @Going_Concern:
Be very wary if asked to participate in a pre-inspection file review and you’re asked to add evidence of reviews and signoffs, insert documents after the fact, change conclusions or recreate analyses.
Last week Going Concern reported the latest findings of the UK version of the PCAOB, the Audit Inspection Unit. There [...]

My new column is up @Going Concern:
Non-compete, non-solicitation and confidentiality clauses are common in professional services. You were probably asked to agree to them when you signed your offer letter and will be asked to sign again to get a severance payment…You may have signed an overly broad, onerous list of conditions that seemingly shackle you [...]

There’s nothing worse than the appearance of regulatory infrastructure and enforcement without the consistent and forceful execution of that regulatory mandate…

The Case Against The Auditors

I was surprised by the news that the record verdict against BDO Seidman in the Bankest fraud had been reversed. I was stunned not because the verdict had been reversed on appeal but by the reasons why. Everyone involved now has to get ready for a new trial because a judge erred in the setup of the proceedings.

That’s not supposed to happen.

June 24, 2010: An exclusive from Steven Thomas, attorney for the New Century Liquidating Trustee:
“The New Century Liquidating Trustee and KPMG LLP have entered into a confidential settlement agreement, pursuant to which the lawsuits and arbitration against KPMG LLP and KPMG International have been resolved.”
Update: July 30, 2010
The court appointed Liquidating Trustee and Plan Administrator [...]

If you are a regular reader of this site, you may remember the first time I warned you about the poor disclosure practices surrounding repurchase risk. It was all the way back in March of 2007 and I was referring to the lack of disclosures surrounding New Century Financial. I warned you again seven months ago that another KPMG client, Wachovia/Wells Fargo, has the same disclosure issues with regard to repurchase risk. The latest announcements of potentially material losses due to forced repurchases of mortgages from Fannie Mae (Deloitte) and Freddie Mac (PwC) were made by JP Morgan and Bank of America – both audited by PwC. Maybe ya’ll should kick the tires a little more on Citibank’s big comeback.

Food for Thought

In the latest scandal at AIG, we’ve seen PwC and AIG’s most senior executives, former CEO Sullivan and CFO Bensinger, attempt to divert attention from their failures. PwC wants to have their cake and eat it too. They initially claimed to have been duped by AIG management including Cassano but now take credit as heroes for eventually forcing AIG to disclose a material weakness in the valuation process. Isn’t it about time to call a spade a spade?

The global money center banks are masters at managing financial reporting. Regulators repeatedly feign surprise at balance sheet sleight of hand, prestidigitation at the expert level intended to buy time until the banks can grow out of the black hole that bubble lending put them in. They announce their quarterly results, with all the details – they don’t even try to hide them anymore – and they’re ignored or the con is traded on for short term profits. We’ve yet to see the auditors called to testify to explain their role in blessing fraudulent bank balance sheet accounting.

Isn’t it about time?

Just for fun, fellow blogger and Twitter-aficionado Paul Kedrosky asked on the Twitter what people thought was the best book they had read so far of 2010. Here are some responses – perhaps a few ideas for your summer reading.

The Big 4 And Consulting

Protiviti is currently soliciting feedback for its new Sarbanes-Oxley Insight Survey.

The results of this survey promise to provide valuable and important insight into the current state of Sarbanes-Oxley compliance for all types of organizations.

My friend Roopen Roy’s most recent column for MyDigitalFC.com is entitled, “Why Mergers In FirmsFall Apart.” Roopen Roy is the Managing Director, Deloitte Consulting, India.

Sarbanes-Oxley (SOx) made law what is best practice for all public companies or companies that issue public debt. That includes “smaller” companies.