• Author Archive

    Update: An Update on the Case of PricewaterhouseCoopers and Colonial Bank

    By • Mar 21st, 2018

    On February 28 the US Justice Department fined Deloitte & Touche LLP $149.5 million for alleged fraud against the government related to its role as the independent outside auditor of Taylor, Bean & Whitaker Mortgage Corp. Also: The damages phase of the FDIC v. PwC case regarding Colonial Bank is set to begin in Washington DC on March 20.

    Speaking Engagements/Conferences

    By • Mar 11th, 2018

    Talking to MAcc students at Texas A&M via Skype in April but, before that, out to LA for Loeb Awards prelim judging and, later in May, “The Future of Fraud”, a new conference In New York City for people who read and write about corporate fraud as an investment thesis.

    KPMG: The Indictments

    By • Feb 10th, 2018

    The KPMG/PCAOB case is eerily similar to another recent one. In that case, there was a criminal trial for the perpetrator and significant fines for the firm that allowed stolen regulatory information to be used inappropriately by its employees.

    McKenna at The Frunchroom

    By • Oct 2nd, 2017

    She’s a native South Sider, and she’s definitely traveling the longest distance to be at the show this Tuesday at Beverly Arts Center. Guess who?

    Revenue Recognition is Coming: Part 2

    By • Sep 7th, 2017

    I’ve been coaching my colleagues on how to spot updates and interesting anecdotes about revenue recognition during the second quarter earnings season. Now we are catching up on the Qs filed and comparing disclosures after concentrating on what was said in earnings releases and calls.

    Revenue Recognition is Coming: Following the Progress at MarketWatch

    By • Sep 6th, 2017

    Once I returned from my Stigler Center fellowship I got to work catching up on the new standard, talking to experts everywhere and working with Audit Analytics to come up with the data to support stories–by my and my colleagues–about companies and their response to the new standard. My goal was to pick some of the obscure topics that were unique or focused on a specific industry.

    Update: McKenna at the University of Chicago’s Stigler Center

    By • Aug 5th, 2017

    I’ve updated the post to point to some recent news about PwC and banks that failed in Ukraine and Spain… I returned to Washington D.C. and my job as a journalist at MarketWatch in late June, after almost three months as a Journalist in Residence at the Stigler Center at the University of Chicago Booth School of Business. My fellowship deliverable, in exchange for the opportunity to study with the researchers, was three posts for the Center’s Pro-Market blog on the state of the audit industry.

    At the Stigler Center Pro-Market Blog: Big 4 Lobbies Against SOx

    By • May 30th, 2017

    The last time anyone attempted to “modernize” auditor independence rules it was the Securities and Exchange Commission, in 2000, before the Enron failure and Arthur Andersen’s demise, as a result of the growing concern that firms increasing focus on consulting was distracting them for their core purpose, auditing. The Big Four firms are now opportunistically lobbying to go back in time, before Enron, when the industry was self-regulated and mostly left alone, able to have as many conflicts of interest as their powerful public clients would allow.

    More on KPMG and the Precedents for Possible Punishment

    By • Apr 23rd, 2017

    Why did they do it? The WSJ walks around the question but KPMG may face big fines and, I think, its partners and the PCAOB professional could face criminal charges.

    KPMG Takes Its Turn With a Big 4 -Sized Scandal

    By • Apr 17th, 2017

    The KPMG/PCAOB scandal is neither the first or last time a Big 4 firm reminded us that there’s nothing special anymore about being a Big 4 firm professional The firms, and their partners, are not capitalist eunuchs, immune from perverse incentives that advocates for free markets say, if big enough, can corrupt anyone.