Archive for January, 2011

Deloitte’s Troubles Bubble To Surface

By Francine • Jan 31st, 2011

Mainstream media, and the Financial Crisis Inquiry Commission, are focused mainly on Ernst & Young as the auditor whipping boy of the financial crisis. That’s really by default not by design and is thinly justified. No one has given fly-over journalists anything on a silver platter that would draw in the rest. Give me a few minutes and I can make a case for PricewaterhouseCoopers as the one teetering on the edge of the abyss. Or KPMG. But today, let’s talk about Deloitte.

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Auditors Under Pressure In The UK: Or Are They?

By Francine • Jan 25th, 2011

The UK accounting firms’ response to the “pressure” on the industry post-crisis is sharp, quick, and on message. But the “pressure” itself feels like a sinister strategy orchestrated by the audit firms to force legislators to grant their wishes under the mistaken assumption they’re “regulating” the industry.
Let me break it down for you.

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Barney Less Than Frank About Auditor Reform

By Francine • Jan 22nd, 2011

What do you get when you mix public pressure, lobbyist money and legislators that think doing anything is better than finally doing the right thing? Not one provision of either current House or Senate financial regulatory reform legislation touches the accounting industry.

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Still No Accountability: An Update On The Goldman Sachs Facebook Deal

By Francine • Jan 19th, 2011

This week the Goldman Sachs Facebook deal fell apart. Sort of. Due to the extensive media coverage of the details, in particular before they were final, Goldman Sachs was running some really big regulatory risks related to general solicitation of potential shareholders. Here’s an excerpt from what I wrote about the deal on January 4th. Read the rest in my column on Forbes, Accounting Watchdog.

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Guest Post: Is Assurance Required For XBRL- Based Financial Reporting?

By Francine • Jan 16th, 2011

Another in a continuing series on XBRL, an open standard for exchanging business information between systems.

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Dear PCAOB Board: Your Job Is To Serve And Protect Investors

By Francine • Jan 16th, 2011

It’s time for the PCAOB Board to think about how they might respond when the audit firms are not going to be so pleased as punch. There’s much for them to address. I’ll be talking about some of those changes and improvements in future posts. But, the most important role of the PCAOB is the inspections process. Let’s take a look at how well that’s going.

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Nowhere To Hide: Ernst & Young Looking At More Civil Liability For Lehman Failure

By Francine • Jan 9th, 2011

The mainstream media (MSM) is now paying attention to the Big 4 – Deloitte, KPMG, PricewaterhouseCoopers, and Ernst & Young.

The financial crisis is now about accounting fraud.

Every two-bit journalist and blogger on the business beat is spitting out stories to keep up and one-up each other. It’s not every day that the accounting firms provide so much gossip about spectacular criminal and civil penalties. Well, actually, it is every day.

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Let Me Tell You A Funny Story: Lehman’s Repo 105 Accounting

By Francine • Jan 9th, 2011

When a new batch of Ernst & Young auditors arrived at Lehman Brothers each year, Repo 105 transactions must have caused debate. After all, a transaction that’s called a “Repo,” short for “repurchase”, but that’s actually recorded on the books as a sale, is a little odd. It may have even quacked.

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PwC Prevails In Decision On AIG “In Pari Delicto” Case

By Francine • Jan 6th, 2011

The Supreme Court of the State of Delaware issued an opinion on January 3rd, 2011 affirming the dismissal of claims against PricewaterhouseCoopers (PwC) in the Teachers Retirement System of Louisiana derivative suit. PwC prevailed because the Delaware Supreme Court had little choice but to follow New York’s direction regarding in pari delicto, barring a strong argument otherwise from the plaintiffs.

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Financial Journalism and Its Discontents: Covering Auditors’ Role in the Crisis

By Francine • Jan 5th, 2011

Bloggers and other non-traditional media have the disadvantages, though, of fewer resources, no editor and the reputation for being irresponsible and scurrilous that we think is undeserved. The financial “blogosphere” acts as a collective editor, filtering out and demoting inaccurate unfair and irresponsible accounts, and promoting useful, inventive and original content in a collaborative way that mitigates each of our own limitations…”

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