Auditor opinions on ICFR are not only not being done well, they are not producing warnings for investors and regulators that a material error and restatement is likely. Worse than that, when auditors get them wrong they whitewash their mistakes.
Archive for the ‘Audit Quality’ Category
Wouldn’t it be nice if investors and other interested parties could look up new Deloitte US CEO Cathy Engelbert in a public and easily accessible registry and find out about all the audit clients where she has been a lead partner or a Quality Control partner? Has she ever been named in a lawsuit or been sanctioned? Let’s hope not.
Update: The PCAOB is investigating PwC for its tax avoidance advice to Caterpillar, the Wall Street Journal is reporting. One down, more than 100+ PwC audit clients advised via Luxembourg to go…
Did you know that each of the Big Four audit firms and some of the next tier also run SEC-registered broker-dealers? You’ll never guess who audits them.
How do the audit firms keep winning the war while losing battles left and right? They use the law and the courts to delay, deter and distract from transparency by settling, and sealing what they can, before the public can find out what silly arguments they often make in their defense.
Ratings agencies and Big Four auditors don’t think they should be held accountable for their respective products. Here are some of the crazy ways they argue their case.
Big egos making shares move by waving their wands. That makes picking stocks based on fundamental analysis more than slightly anachronistic. A bit about Herbalife…
The Problem Of An Audit Firm Market Exit: New Research From University of Chicago Booth School of BusinessBy Francine • Jul 29th, 2013
A post at University of Chicago Booth School of Business Capital Ideas blog discusses new research from Joseph Gerakos and Chad Syversen on the dangers of industry concentration in the event of a market exit by one of the large audit firms. For example, what if PwC, which audits five of the top ten global pharma companies ran into trouble amid the ongoing investigations of bribery of Chinese officials, in particular by PwC audit client GlaxoSmithKline and a few of its other audit clients?
I noticed a small little thing in one of the first stories about Scott London. As I tried to research and write about it, I waited for someone else to pick up on it. (No one else did.) Scott London seems to have subverted the intent of Sarbanes-Oxley Section 203 that requires lead engagement partner rotation off engagements to promote objectivity, independence and professional skepticism.
HP announced today it is writing down more than $5 billion, or almost half of the Autonomy acquisition price, because of “serious accounting improprieties, misrepresentation and disclosure failures” by Autonomy former executives. Deloitte was the auditor of Autonomy, a UK software firm acquired by HP in 2011 for $11.1 billion.