Embracing Change – Day by Day
By Francine • Mar 31st, 2011I often think of my career as having had at least four parts, so far…
Archive for March, 2011
An Honest Services Crisis: Professional Poison and a Chicago Connection
By Francine • Mar 30th, 2011The Big Four, off and on, have had some of the largest global consulting practices across most categories.The larger an organization gets, the more its staff takes on the average characteristics of individuals within the markets it serves. Mark O’Connor of Monadnock Research presents a guest post on the special risks posed by Big 4 audit firms who provide consulting services.
Will Auditors Be Held Accountable? The PCAOB Has A Plan
By Francine • Mar 21st, 2011I was in Washington DC to attend the March 24 meeting of the new Standing Advisory Committee (SAG) of the new PCAOB. I was surprised twice by a report presented by the PCAOB’s Investor Advisory Group at last week’s meeting. First surprise: Chairman Doty was right. Good people are looking at the issue of auditor effectiveness, especially during the crisis. Second surprise: The report quoted me.
@ Forbes: Chinese Reverse Mergers: The Auditor Angle
By Francine • Mar 16th, 2011My Forbes column today is about the Chinese reverse merger market and recent reports of potential frauds – plural. I waited for the inevitable case that implicated a Big 4 audit firm. When it came I got two for the price of one and a bonus – a great new research paper from the PCAOB on the Chinese reverse merger phenomenon.
@ Accountancy Age: An Opinion Piece On The US Audit Reform Debate
By Francine • Mar 16th, 2011I’ve written an opinion piece for Accountancy Age comparing the auditor reform debate in the US – what there is – to the active debate in the UK.
Here’s an excerpt:
In the US, the Big Four leadership is noticeably absent from any public conversation of audit or audit industry reform. It’s hard enough for reporters to [...]
@Forbes “Why Banks, And Their Auditors, Are Getting Away With Financial System Murder”
By Francine • Mar 13th, 2011I wrote the post excerpted below for Forbes on February 25th, after seeing a great story by Jonathan Weil at Bloomberg on Citigroup.
Now the WSJ reports that, according to “sources”, the SEC and Department of Justice are having trouble making a case against Lehman executives and Ernst and Young in that case. I’m sure Anton [...]
@Forbes “Auditors Abandon Investors On Liability Limits”
By Francine • Mar 13th, 2011Tammy Whitehouse over at Compliance Week does a thorough job on the largest audit firms and their fear of catastophic litigation. Yes, they’re admitting it – Tammy says they’re pleading with legislators – and fighting any legislative urges to open more avenues for lawyers and their clients to sue them.
The Dodd-Frank Act gave the Securities and [...]
Birds On A Wire: How Do The Firms Get The Word Out?
By Francine • Mar 9th, 2011This article was originally published on GoingConcern.com October 7, 2009.
It’s been a while since an update on the PwC/Satyam fraud for re: The Auditors. Rest assured, it’s all still a big problem for PwC. Their partners are still in jail but the wheels of Indian justice turn slowly. I did receive reports that India’s accounting [...]
All Points Bulletin: Auditor Litigation Spans The Globe
By Francine • Mar 9th, 2011Let’s consider for one moment that the US firms are not the center of the universe for the global audit franchise. Although US revenues are significant, profits and growth are not necessarily stellar compared to the potential in other geographies. So the firms will plow foreign fields instead.
‘Independent’ Directors for the Audit Firms: Much Ado About Nothing”
By Francine • Mar 6th, 2011You might as well be trying to save walruses from an oil spill in the Gulf of Mexico. The Big 4 audit firms’ response plans in the event of catastrophic litigation, if they exist, are likely cookie-cutter boilerplate, out of date, irrelevant and prepared by the same go-to defense lawyers that shill for them and repeatedly negotiate their settlements.
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, 