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We now know more about what the firms have been hiding. The global capital markets, not just current shareholders, need full disclosure of the engagement teams on all public issuers over time, and in a way that is easily accessible.
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.
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?
As if Ernst & Young didn’t have enough to worry about now they’ve got a public airing of some dirty laundry by the PCAOB.
It wasn’t even a verdict. Just a decision by New York Federal Court Judge Lewis Kaplan in one of the Lehman failure cases Ernst & Young is fighting. A decision to allow substantially all of the allegations against Lehman executives and at least one of the allegations against Ernst & Young to move forward to discovery and trial. That is, if there’s not a settlement first.
Don’t get me wrong.
I’m thrilled that there’s a lot of traffic in my lane. What I mean is, it’s good for everyone that we’re talking about these issues and that someone other than me and a few other broken records are playing these tunes.
Tammy Whitehouse over at Compliance Week does a thorough job on the largest audit firms and their fear of catastophic litigation. Yes, they’re admitting it – Tammy says they’re pleading with legislators – and fighting any legislative urges to open more avenues for lawyers and their clients to sue them.
The Dodd-Frank Act gave the Securities and [...]
On September 24, 2009 the Public Company Accounting Oversight Board issued a report on the first year of implementation of Auditing Standard No. 5. There’s something negative to say about each of the components reviewed.
Last Thursday I participated in the “2009 Mid-Year Review – Securities Litigation and Enforcement” sponsored by Securities Docket. The webcast is part of BrightTalk’s Securities Litigation Summit, and follows-up and provides an update to the popular “2008 Year in Review” we presented in January 2009.
I joined several of the leading bloggers in the securities litigation [...]
If you’ve been reading me for a while, you know that I pretty much stick to discussing the largest 4 audit/accounting firms. This is for practical reasons – keeping my sanity in dealing with so much information – and to be realistic. Put the three next tier firms in the US together and they don’t equal either the critical mass in terms of experience and infrastructure nor the client/revenue base of any one of the Big 4. They will never, either individually or collectively, be able to step up and absorb the detritus from another Big 4 firm failure, either in the US or out.
That doesn’t mean the next tier don’t serve the clients they have well. Mostly. Just means that the next tier are not ready to play in the same pitch as Ronaldo.
 Francine McKenna (@retheauditors on Twitter) is a CPA, writer, speaker and subject matter expert with more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad. She is a two-time Gerald Loeb Award finalist and a frequently quoted freelance journalist. For more info, click the "About" link at the bottom of this page. |
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