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US Department of Justice v KPMG: Document Shows “Too Few To Fail” Was Opening Premise

Saturday, April 19th, 2014

A new KPMG tax shelter era document surfaced, in original format, that had not yet been cited or quoted from in any media reports. The document tells us that late in the negotiations, June 27, 2005 the DOJ still would not agree to all of KPMG’s terms, including promising not to criminally charge the firm. But the decision to make sure the firm did not “go under” had already been made. KPMG and its Skadden attorneys only had to make sure the DOJ didn’t, in a misguided show of sheer aggressiveness, cause another Arthur Andersen.

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Speaking Engagements/Conferences

Tuesday, April 15th, 2014

Coming up: A visit to Old Dominion University and the Hampton Roads Economic Club and Benedictine University, Lisle, IL.

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Guest Post From Eric Starkman: The “Unvarnished” Truth About General Motors

Sunday, April 6th, 2014

GM is in trouble again and this time it’s worse than some weak internal controls or even a bankruptcy. Cost cutting may have discouraged the prompt replacement of faulty ignition switches now linked to at least 13 fatalities and the recall of 2.6 million vehicles. Are you still glad we bailed the company out?

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All The Auditors Are Above Average: Jay Hanson Allergic To “Audit Failure”

Wednesday, March 26th, 2014

Should audit and auditor failure be solely defined by identified material misstatements that result in restatements, and internal control failures? I don’t think so but Jay Hanson, PCAOB Board member, said so recently.

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The SEC’s AgFeed Complaint: No Restatement Means No Sarbanes-Oxley Clawback

Sunday, March 23rd, 2014

The AgFeed case is the mother lode for an SEC that says it’s ready to rack up some accounting fraud enforcement points and, perhaps, pursue a more aggressive enforcement approach to sparsely utilized Sarbanes-Oxley provisions like Section 304, clawbacks.

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A Need for Transparency In Financial Staffing: A Guest Post From Dan Gaffney

Tuesday, March 18th, 2014

According to Freelancers Union, almost one-third of the American workforce is independent. That’s nearly 42 million people and growing. The staffing industry, which should support the wave of new freelancers, hasn’t adapted since William Russell Kelly founded the Russell Kelly Office Service in Detroit in 1946.

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Exclusive From Monadnock Research: Big Four Fiscal 2013 Advisory Practice Rankings and Conflict Risk Metrics

Tuesday, March 18th, 2014

This Monadnock Research Note offers an in-depth analysis of organic growth and strategic M&A in non-audit services for the Big Four audit firms, highlighting the growing risks associated with an increasing proportion of advisory relative to audit services at Big Four firms – and the conflict risk that this unique mix of services presents.

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Are All Big Four Partners Evil Or Just Leadership? Pondering The Problem of Evil

Sunday, February 23rd, 2014

How do professionals forget what’s right and wrong? Adolf Eichmann was a “new type of criminal, who is actually hostis generic humani . . . [and] commits his crimes under circumstances that make it well-nigh impossible for him to know or to feel that he is doing wrong.”

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PwC Faces A Trial For SemGroup Audit And Its Defense Is Predictably Slick

Tuesday, February 18th, 2014

PwC is scheduled to go to trial for malpractice related to the bankruptcy of SemGroup in August, almost six years later. The SemGroup Litigation Trust, pursuing claims on behalf of the company and its creditors, alleges PwC did a terrible audit. But it’s worse than just lousy auditing, especially if a trial exposes the truth of PwC’s disingenuous defenses.

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VC Horowitz Implicates Auditor PwC In Story About Dodging Backdating Bullet

Thursday, February 13th, 2014

Imagine my surprise when Ben Horowitz, one half of the venture capital team of Andreessen Horowitz, wrote a blog post about dodging a stock option backdating jail term that also implicates PwC.

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