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I was video interviewed earlier this week by Matt Davio @MissTrade on Twitter. There are hundreds of traders who follow me on Twitter and they’re starting to visit this blog in greater and greater numbers. They tell me that they are always looking for an edge, information not available elsewhere. So, I’m gratified they think they’ve found it.
Arthur Levitt Jr. wrote a recent Op-Ed piece for the New York Times defending “high frequency trading.” As you can see, the conflicts for Mr. Levitt, especially now that he is also advising Goldman Sachs (also a PwC client) and Getco, are numerous.
Mr. Levitt is 78 years old. Isn’t it time for him (and Paul Volcker) to go fishing? Why don’t the numerous media outlets he works/writes for insist that he disclose his conflicts?
Many companies are using Web 2.0 tools to aid in corporate communications and public relations. How many companies are using these tools for investor relations? In order to determine this, I looked at the top 100 Fortune companies’ investor relations Web sites.
The drama continues at Deloitte. The cuts and other human resources actions haven’t stopped or subsided. On the contrary. With the recent loss of United Airlines as an audit client, as well as the effort at absorption of the BearingPoint professionals, new cuts and “rightsizing” are likely necessary. Those remaining are still waiting for official news of regarding promotions, raises and most likely announcements of “no bonuses.”
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Given the pressures on costs and the longstanding ties some finance, audit, and accounting executives have with the accounting firms, it is not surprising that the weakening of the independence commitment may come from the companies themselves. What’s the downside for them? The potential for scrutiny by corporate governance experts and journalists? You can’t argue with a recession. And in the event of an accounting scandal or restatement, plaintiff’s lawyers will have an uphill battle to penetrate the impenetrable auditor liability shields and caps.
What’s lost in all of this discussion of efficiency and cost cutting?
Independence protects shareholder’s interests.
However, the warnings signs and red flags were there. Not only had there been independent analysts who sounded alarms, but their auditors, PwC are in there all the time, including providing due diligence for acquisitions and “consulting regarding financial accounting and reporting standards.” In fact, PwC earned more from audit-related and tax fees than from the audit itself. I thought that Sarbanes-Oxley was supposed to prevent the Arthur Andersen syndrome from happening again? Well, maybe not if it’s Arthur Andersen -types giving the orders and paying the bill.
Make no mistake.
Gary Holdren was in it for the money.
Huron Consulting Group went public in the summer of 2004, barely two years after bailing on the sinking Arthur Andersen ship in May of 2002.
The accusations are devastating for a firm that makes its money keeping others out of this kind of trouble.
I have some book reviews in the hopper.
Take a look for the following books and what’s been written about them already.
Trust Agents: Using the Web to Build Influence, Improve Reputation, and Earn Trust by Chris Brogan and Julien Smith
Professional Services Marketing, by Wellesley Hills Group and RainToday.com leaders Mike Schultz and John Doerr
Bailout Nation: How [...]
My latest post at Technically Women addresses a recent controversy over Top Ten Speakers in the social media arena. I did a quick survey of representation of female speakers at the conferences I cover and participate in.
In our world of accounting, audit, and compliance, I think the numbers are looking better every day.
 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 |
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