• Author Archive

    My take on the latest at the PCAOB and KPMG

    By • Nov 3rd, 2019

    In Episode 449 of the FCPA Compliance Report, I spoke with Tom Fox to discuss the current status of the KPMG defendants and what their conduct means for the audit profession going forward.



    Speaking Engagements/Conferences

    By • Nov 1st, 2019

    I’m done traveling until 2020 when I’ll attend the AAA-Audit Section meeting in Houston in January. See you there!



    Update: Botta v. PricewaterhouseCoopers LLP, Case 3:18-cv-02615-RS

    By • Jun 30th, 2019

    A judge denied PwC’s motion for summary judgement. The case goes to trial in October. Mauro Botta brought an action in district court in California against PricewaterhouseCoopers LLP alleging that PwC wrongfully terminated him in retaliation for a whistleblower complaint he made to the Securities and Exchange Commission about PwC’s auditing practices. There’s been a lot written about the case, which is ongoing.



    An SEC Fine for KPMG in the PCAOB Data Theft Scandal and Another Horrible Revelation

    By • Jun 26th, 2019

    “Innovation demands risk-taking… which, in turn, entails redefining failure, stripping away its power to inhibit.” Chairman and CEO of KPMG Lynne Doughtie

    The Securities and Exchange Commission settled charges on Monday with KPMG LLP for the ongoing case of its partners altering past audit work after receiving stolen information about inspections of the firm that would be conducted by its regulator, the Public Company Accounting Oversight Board or PCAOB. Five former KPMG officials were charged last year in the case that alleged they schemed to interfere with the PCAOB’s ability to detect audit deficiencies at KPMG. Two have pleaded guilty, two were found guilty and one is still pending trial.

    But in a new almost more egregious revelation, the SEC’s order also finds that KPMG audit professionals, including lead audit engagement partners sent exam answers related to mandatory continuing professional education, ethics and integrity, and training mandated by a prior SEC order finding audit failures to other partners, and also solicited answers from and sent answers to their subordinates to help them also attain passing scores. In addition to paying a $50 million penalty, KPMG is required to evaluate its quality controls relating to ethics and integrity, identify audit professionals that violated ethics and integrity requirements in connection with training examinations within the past three years, and comply with a cease-and-desist order. The SEC’s order requires KPMG to retain an independent consultant to review and assess the firm’s ethics and integrity controls and its investigation. I will be writing more soon.



    The Question of the KPMG Whistleblower

    By • Mar 10th, 2019

    The timeline of who told whom what and when, this time around for KPMG, is a bit more complicated than David Middendorf described in his testimony in the criminal case against him for allegedly conspiring to steal PCAOB inspection data.



    McKenna On Buffett, Berkshire Hathaway, and Kraft Heinz

    By • Mar 3rd, 2019

    Has Warren Buffett run out of long-run? The stars aligned and Warren Buffett issued an annual shareholder letter that was forced to include an embarrassing charge for significant losses on Berkshire Hathaway’s investment in Kraft Heinz. Buffett’s letter was a rant against GAAP, and a 180 degree turn from his typical long-term focus. I was in New York […]



    Amazon and taxes, oh my!

    By • Feb 18th, 2019

    Jeff Bezos has bigger problems than the Queens pull-out and criticism of Amazon’s taxes. He may want to wipe that smug look off his face.  Photo from Forbes.  Amazon backed out of its selection of Queens, NY as a location for a new headquarters this week.  It was a big story, revolving around new Queens/Bronx […]



    Do Investors Care At All About Audits Anymore?

    By • Jan 24th, 2019

    Would investors still pay for an audit if it weren’t legally mandated? Are regulators and exchanges perpetuating a government-mandated oligopolistic exclusive franchise for the Big 4 and a few additional firms that produces information investors now ignore?



    MarketWatch 2018 Stories That Packed A Punch

    By • Jan 13th, 2019

    A wrap-up of my writing in 2018 on three topics I’d been following that reached a climax last year — Theranos, FDIC v. PwC and KPMG/PCAOB inspection data theft— and three more where my reporting resulted in a legal or regulatory impact on the companies—ADT, Symantec, and IGC.



    Update: KPMG: Whittle and Holder Plead Guilty

    By • Nov 28th, 2018

    KPMG partner Thomas Whittle broke ranks on October 29 and pleaded guilty to all five criminal charges. He is now cooperating with prosecutors. Do you have more information about this case? Leave a comment here, one I can leave unposted, if you wish to communicate confidentially or DM me on Twitter @retheauditors for Signal encrypted confidential messaging instructions.