• Archive for the ‘Pure Content’ Category

    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.



    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 […]



    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?



    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.



    New Stories about the KPMG-PCAOB Scandal

    By • Aug 27th, 2018

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



    Mick Mulvaney, the CFPB and a “thing”

    By • Apr 29th, 2018

     Warning:  Coarse language, because we may get a lot of snow in Chicago but we’re no snowflakes. Last week I went to an American Bankers Association Conference for bank government relations executives. I wrote a story about some things that Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau (and also a cabinet member […]



    Another Update on the Case of FDIC v PricewaterhouseCoopers re: Colonial Bank

    By • Apr 8th, 2018

    On February 28 the US Justice Department fined Deloitte & Touche LLP $149.5 million for alleged fraud against the government related to its role as the independent outside auditor of Taylor, Bean & Whitaker Mortgage Corp. Also: The damages phase of the FDIC v. PwC case regarding Colonial Bank is set to begin in Washington DC on March 20.



    Revenue Recognition is Coming: Part 2

    By • Sep 7th, 2017

    I’ve been coaching my colleagues on how to spot updates and interesting anecdotes about revenue recognition during the second quarter earnings season. Now we are catching up on the Qs filed and comparing disclosures after concentrating on what was said in earnings releases and calls.



    Revenue Recognition is Coming: Following the Progress at MarketWatch

    By • Sep 6th, 2017

    Once I returned from my Stigler Center fellowship I got to work catching up on the new standard, talking to experts everywhere and working with Audit Analytics to come up with the data to support stories–by my and my colleagues–about companies and their response to the new standard. My goal was to pick some of the obscure topics that were unique or focused on a specific industry.