• Author Archive

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

    By • Mar 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.



    A China Fraud Dissected: Part 3 AgFeed’s Trusted Advisors Protiviti and Latham & Watkins

    By • Mar 7th, 2014

    Company executives and directors like to believe they can purchase a posse of “trusted advisors”. Instead, they’ve often only bought a gaggle of self-interested auditors, lawyers, and consultants. But to whom does each of those vendors owe loyalty?



    A China Fraud Dissected: Part 2 AgFeed’s Auditors

    By • Feb 28th, 2014

    AgFeed had the benefit of two PCAOB registered and inspected audit firms. There is no indication on either the SEC or PCAOB website of an investigation of either for what happened at AgFeed. Is this one going to end badly, too, like the Gately case?



    A China Fraud Dissected: Part 1 Milton Webster, AgFeed Audit Committee Member and Whistleblower

    By • Feb 26th, 2014

    It is highly unusual for a board member, especially an audit committee member, to be a fraud whistleblower for a public company. Milton Webster, a former AgFeed director, did it but he, unfortunately, won’t be around to see the result of his significant social and professional sacrifice.



    Point-by-Point Case Comparison Of MF Global, Sentinel and PFG Best

    By • Feb 24th, 2014

    Here’s a breakdown of some of what’s the same and what’s different about these three cases.



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

    By • Feb 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.”



    Guest Lectures At Stanford Graduate School Business

    By • Feb 22nd, 2014

    My notes for guest lectures (there were two sections, back-to-back) February 10, 2014 for Bus F332/Law 725, Finance and Society, at Stanford University Graduate School of Business, taught by Professor Anat Admati. Emphasis: The auditors’ role in corporate governance in financial institutions and specifically how auditors not inadvertently stifle the actual use of compensation clawbacks.



    The Saga Of Stephen Glass: A Guest Post Morality Tale From Eric Starkman

    By • Feb 19th, 2014

    Is it fair to “tar and feather” professionals when they are sued or only when they are convicted of crimes? How much time must pass before they can get on with their lives?



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

    By • Feb 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.



    VC Horowitz Implicates Auditor PwC In Story About Dodging Backdating Bullet

    By • Feb 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.