|
||||||
 | ||||||
| ||||||
Leading accountants will meet the Government this week to plead for protection as they prepare for a surge in litigation from investors trying to recover their losses from big company failures.The Big Four — Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC) — are braced for an increase in legal action from investors and liquidators as the economic crisis continues.
They have got to be kidding…
I was asked by the infamous John Carney to fill in at Clusterstock.com while he’s roaming the Midwest in search of “Baseball, Hot Dogs, Apple Pie and Chevrolet…”
Reports published by The Times of India and The Business Standard say that India’s Serious Fraud Investigation Office (SFIO) has found the Price Waterhouse auditors involved in the Satyam account:
“knowingly certified the inflated and forged balance sheets prepared based on forged FDRs and other data..”
My friend and former colleague, Richard Chambers, is now the President of the Institute of Internal Auditors. Richard has a lifetime of internal audit experience and is my go-to-guy when it comes to the fine points of the internal auditing career. He’s now writing a blog for the IIA and his latest post touches on the challenges of being a government auditor.
“…with an alarming frequency, it seems that some of our colleagues who audit local government operations are waging an uphill battle against formidable political forces.
What can the audit firms do to improve scrutiny of public companies – especially the ones governments have invested so much taxpayer money in – now when we need it the most? Can it be done? I think so. Starting at the top, at a strategic level, I recommend first that firms make significant changes by refocusing on their true client – the shareholders and investors of the public companies they audit.
I asked myself, “fm, what would you do if one of them asked you to step up and offer solutions?” If anyone asked me to help find a way to get through this period,
-Without reductions in force,
-Without betraying the trust of otherwise very loyal employees,
-Without losing the confidence of key clients,
-Without endangering quality and integrity in the work they’ve been enfranchised to do under the exclusive licensing of various federal governments and public/private bodies such as exchanges,
-Without risking new lawsuits for negligence and complicity on fraud and malfeasance, and
-Without completely abdicating responsibility to their true client – the shareholders and investors in the public companies they audit,
I would start at the top.
I’ve been invited to meet some readers today in the greater Cincinnati area. It seems there are present and former employees of the Big 4 and next tier audit firms in Cincinnati who read this blog frequently. I guess my notariety surprised the heck out of one of my former Jefferson Wells colleagues, Dave Eichert now at Clark Schaefer Consulting. (Actually, not. He knows me so well.) He’s graciously agreed to host a meetup and I’ve added a Tweetup so we can all talk it out.
If the New Century trustee is successful, ”it may embolden others to look more closely at the possibility of bringing [accounting] firms to some level of culpability for the things that happened,” that led to the credit crisis, Francine McKenna, president of McKenna Partners LLC, a corporate-governance consultancy, said in an interview with the Wall Street Journal’s [...]
KPMG is being sued for $1bn by the liquidators of New Century, the collapsed subprime lender, in the first big case against an auditor arising from the current financial crisis. If the New Century trustee is successful, “it may embolden others to look more closely at the possibility of bringing [accounting] firms to some level of culpability for the things that happened,” that led to the credit crisis, Francine McKenna, president of McKenna Partners LLC, a corporate-governance consultancy, said in an interview in the Wall Street Journal.
 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, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. Your firm can sponsor this specialized news site. For more information contact Francine McKenna, fmckenna@mckennapartners.com |
|
