Comments on: With Cassano Off The Hook, Where Does PwC Hide In The AIG Case? http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/ The Business of the Big 4 Audit Firms Wed, 08 Feb 2012 21:24:11 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: So Big: PIMCO Files For Total Return ETF - Francine McKenna - Accounting Watchdog - Forbes http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-154541 So Big: PIMCO Files For Total Return ETF - Francine McKenna - Accounting Watchdog - Forbes Wed, 27 Apr 2011 01:49:05 +0000 http://retheauditors.com/?p=5236#comment-154541 [...] (PwC) – auditor for Bank of America, JP Morgan, Freddie Mac, Goldman Sachs, the Federal Home Loan Banks, [...] [...] (PwC) – auditor for Bank of America, JP Morgan, Freddie Mac, Goldman Sachs, the Federal Home Loan Banks, [...]

]]> By: In Financial Crisis Autopsy Auditors Nowhere To Be Found - Francine McKenna - Accounting Watchdog - Forbes http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-153405 In Financial Crisis Autopsy Auditors Nowhere To Be Found - Francine McKenna - Accounting Watchdog - Forbes Fri, 11 Feb 2011 19:37:49 +0000 http://retheauditors.com/?p=5236#comment-153405 [...] With Cassano Off The Hook, Where Does PwC Hide In The AIG Case?, July 27, 2010: [...] [...] With Cassano Off The Hook, Where Does PwC Hide In The AIG Case?, July 27, 2010: [...]

]]> By: re: The Auditors » Blog Archive » Big 4 Bombshell: “We Didn’t Fail Banks Because They Were Getting A Bailout” http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-140417 re: The Auditors » Blog Archive » Big 4 Bombshell: “We Didn’t Fail Banks Because They Were Getting A Bailout” Thu, 25 Nov 2010 18:36:36 +0000 http://retheauditors.com/?p=5236#comment-140417 [...] No one knows whether similar meetings were held between audit leadership and the Federal Reserve Bank and US Treasury.   No one has asked them to testify before a Congressional Committee. When their presence in meetings at Goldman Sachs and AIG, for example, was exposed via emails and correspondence subpoenaed by Congressional investigators, the names were redacted at their request. [...] [...] No one knows whether similar meetings were held between audit leadership and the Federal Reserve Bank and US Treasury.   No one has asked them to testify before a Congressional Committee. When their presence in meetings at Goldman Sachs and AIG, for example, was exposed via emails and correspondence subpoenaed by Congressional investigators, the names were redacted at their request. [...]

]]> By: re: The Auditors » Blog Archive » Systemic Risk! Dominance! Momentum! Auditors In Crisis. Again. http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-133811 re: The Auditors » Blog Archive » Systemic Risk! Dominance! Momentum! Auditors In Crisis. Again. Sat, 16 Oct 2010 21:49:58 +0000 http://retheauditors.com/?p=5236#comment-133811 [...] The Financial Crisis Inquiry Commission finally posted some documents from PwC with regard to the AIG failure.  The PwC partners’ names were redacted even though those same partners had been named as important actors in the resolution of charges against AIG’s Joseph Cassano. [...] [...] The Financial Crisis Inquiry Commission finally posted some documents from PwC with regard to the AIG failure.  The PwC partners’ names were redacted even though those same partners had been named as important actors in the resolution of charges against AIG’s Joseph Cassano. [...]

]]> By: Private Dancer http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-126273 Private Dancer Tue, 24 Aug 2010 17:43:50 +0000 http://retheauditors.com/?p=5236#comment-126273 This defense doesn't hold water because it cannot be applied equitably. Unless you want to change the rules so that every party and counter party must have their auditors sign off that everyone's numbers are kosher, then this is just a red herring. And even that idea opens up a huge can of worms. This defense doesn’t hold water because it cannot be applied equitably. Unless you want to change the rules so that every party and counter party must have their auditors sign off that everyone’s numbers are kosher, then this is just a red herring.

And even that idea opens up a huge can of worms.

]]> By: Francine http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-126122 Francine Mon, 23 Aug 2010 11:51:48 +0000 http://retheauditors.com/?p=5236#comment-126122 @ Ex Big 4 I've responded to this defense before, many times. Both teams should at least be talking to the same experts within the firm regarding valuation, structured products, alternative assets and derivatives. That's where the consistency should come from first. For an example of how that should work and, when it doesn't, how that leads to litigaton, look to the KPMG New Century case. If you believe for a minute that the partners who work in the same practice, work in the same office in this case - New York - and work on the largest most important clients in the firms don't talk to each other about their client issues, I've a got a bridge in Brooklyn to sell you. In the case of AIG and Goldman Sachs, it's been well documented that the highest level partners in the firm attended AIG audit committee meetings in 2007 and 2008 and heard all about their dispute with Goldman Sachs. They knew all about the differences and could have done something to fix it much sooner. Later they did. They pushed AIG over via a material weakness but it was too little to late and only to protect themselves from the public criticism that was starting to occur. @ Ex Big 4

I’ve responded to this defense before, many times.

Both teams should at least be talking to the same experts within the firm regarding valuation, structured products, alternative assets and derivatives. That’s where the consistency should come from first. For an example of how that should work and, when it doesn’t, how that leads to litigaton, look to the KPMG New Century case.

If you believe for a minute that the partners who work in the same practice, work in the same office in this case – New York – and work on the largest most important clients in the firms don’t talk to each other about their client issues, I’ve a got a bridge in Brooklyn to sell you. In the case of AIG and Goldman Sachs, it’s been well documented that the highest level partners in the firm attended AIG audit committee meetings in 2007 and 2008 and heard all about their dispute with Goldman Sachs. They knew all about the differences and could have done something to fix it much sooner. Later they did. They pushed AIG over via a material weakness but it was too little to late and only to protect themselves from the public criticism that was starting to occur.

]]> By: Ex Big 4 http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-126065 Ex Big 4 Mon, 23 Aug 2010 04:23:02 +0000 http://retheauditors.com/?p=5236#comment-126065 I agree with your article although you seem to assume the various engagement teams (AIG, Goldman Sachs, etc) discuss their client's internal matters with one another. The Goldman team would have been prohibited from releasing confidentional information to the AIG team, and vice versa. Therefore, nether team can rely on the other for valuations. You can not expect an audit team to force a financial disclosure on one client based on what they learned from another engagement team. There is client privacy and NSAs which prohibit this. I agree with your article although you seem to assume the various engagement teams (AIG, Goldman Sachs, etc) discuss their client’s internal matters with one another. The Goldman team would have been prohibited from releasing confidentional information to the AIG team, and vice versa. Therefore, nether team can rely on the other for valuations. You can not expect an audit team to force a financial disclosure on one client based on what they learned from another engagement team. There is client privacy and NSAs which prohibit this.

]]> By: re: The Auditors » Blog Archive » PricewaterhouseCoopers Cuts Hundreds of Internal IT Professionals http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-123125 re: The Auditors » Blog Archive » PricewaterhouseCoopers Cuts Hundreds of Internal IT Professionals Fri, 30 Jul 2010 03:44:46 +0000 http://retheauditors.com/?p=5236#comment-123125 [...] services firms, especially ones wracked by high litigation costs and lower fee income are loathe to spend money on internal activities.  That  requires 100 cents [...] [...] services firms, especially ones wracked by high litigation costs and lower fee income are loathe to spend money on internal activities.  That  requires 100 cents [...]

]]> By: David http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-123118 David Fri, 30 Jul 2010 02:00:39 +0000 http://retheauditors.com/?p=5236#comment-123118 The audiotrs don't have to hide. Is there any evidence that the prosecutors are going after them? Probably not. I guess there could be a perjury count if the auditors testified under oath that Mr. Cassano hadn't disclosed the information. But maybe theycould claim that they just misinterpreted what Mr. Cassano was saying. The federal prosecutors have charged almost nobody with crimes involving the finanical collapse no matter how much they deserve to be charged. It's as if filing false financial statements isn't a crime. Dick Fuld wasn't charged. Stan O'Neal wasn't charged. Kerry Killinger wasn't charged. Angelo Mozillo wasn't charged. Prince wasn't charged at Citicorp. Raines wasn't charged at Fannie Mae. Nobody appears to have been charged at New Century Financial. And, none of the auditors or CFOs of those firms have been charged either. If the government doesn't plan to enforce the cuirrent laws, why are they passing new ones? I thought Bush's Justice Department was real bad in this regard. But at least some people were charged at Enron, Global Crossing, Worldcom and HealthSouth. There isn't going to be improvement on the financial reporting front uhtil someone thinks they may go to jail for these fraudulent acts. The audiotrs don’t have to hide. Is there any evidence that the prosecutors are going after them? Probably not.

I guess there could be a perjury count if the auditors testified under oath that Mr. Cassano hadn’t disclosed the information. But maybe theycould claim that they just misinterpreted what Mr. Cassano was saying.

The federal prosecutors have charged almost nobody with crimes involving the finanical collapse no matter how much they deserve to be charged. It’s as if filing false financial statements isn’t a crime. Dick Fuld wasn’t charged. Stan O’Neal wasn’t charged. Kerry Killinger wasn’t charged. Angelo Mozillo wasn’t charged. Prince wasn’t charged at Citicorp. Raines wasn’t charged at Fannie Mae. Nobody appears to have been charged at New Century Financial. And, none of the auditors or CFOs of those firms have been charged either. If the government doesn’t plan to enforce the cuirrent laws, why are they passing new ones?

I thought Bush’s Justice Department was real bad in this regard. But at least some people were charged at Enron, Global Crossing, Worldcom and HealthSouth.

There isn’t going to be improvement on the financial reporting front uhtil someone thinks they may go to jail for these fraudulent acts.

]]> By: When in doubt, Boogie! http://retheauditors.com/2010/07/27/with-cassano-off-the-hook-where-does-pwc-hide-in-the-aig-case/comment-page-1/#comment-122940 When in doubt, Boogie! Wed, 28 Jul 2010 19:15:44 +0000 http://retheauditors.com/?p=5236#comment-122940 What a wonderful video. Classic. What a wonderful video. Classic.

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