Archive for the ‘The Case Against The Auditors’ Category

PCAOB’s Franzel Speaks to AAA; Are Auditors’ ICFR Opinions Just “Busy-Work”?

By • Aug 9th, 2015

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.

When Auditors Get Mixed Up In M&A, Smaller Clients Get Hurt

By • Feb 3rd, 2015

A new study says smaller public companies are paying a premium for the prestige of a Big Four auditor but the auditors are dangling small clients as chum for their large acquisitive shark audit clients.

Piling Up For PwC

By • Nov 18th, 2014

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…

18-Year Old Anthony Canalungo Questions Herbalife, And PwC, On Exchange Rates

By • Sep 23rd, 2014

Anthony Canalungo wrote a really interesting article about Herbalife’s financials in Venezuela. Three different MLM companies from the peer group in addition to Herbalife operating in Venezuela and all except for Herbalife are using SICAD 2. What else do these four firms have in common? Auditor PwC.

Auditor Independence: Another Case of Misplaced Loyalty

By • Sep 2nd, 2014

Ryan Adams testified on behalf of PwC in an important court case. How can PwC be independent of Adam’s employer Marin Software, and Adams, the Financial Reporting Director at this newly public PwC-audited client company, if he’s testifying on PwC’s behalf in litigation that could impact PwC’s business model in California and, perhaps, nationally?

Auditors and the Financial Crisis: Part of the Solution or Part of the Problem?

By • Jul 13th, 2014

This is the text of my speech for the Society for the Advancement of Socio-Economics Conference last Friday. The theme of this year conference was “The Institutional Foundation of Capitalism”. Our special session was entitled ‘The New Financial Architecture after Financial Crisis’.

US Department of Justice v KPMG: Document Shows “Too Few To Fail” Was Opening Premise

By • Apr 19th, 2014

A new KPMG tax shelter era document surfaced, in original format, that had not yet been cited or quoted from in any media reports. The document tells us that late in the negotiations, June 27, 2005 the DOJ still would not agree to all of KPMG’s terms, including promising not to criminally charge the firm. But the decision to make sure the firm did not “go under” had already been made. KPMG and its Skadden attorneys only had to make sure the DOJ didn’t, in a misguided show of sheer aggressiveness, cause another Arthur Andersen.

All The Auditors Are Above Average: Jay Hanson Allergic To “Audit Failure”

By • Mar 26th, 2014

Should audit and auditor failure be solely defined by identified material misstatements that result in restatements, and internal control failures? I don’t think so but Jay Hanson, PCAOB Board member, said so recently.

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.