• Archive for the ‘The Big 4 And Globalization’ Category

    At the Stigler Center Pro-Market Blog: Big 4 Lobbies Against SOx

    By • May 30th, 2017

    The last time anyone attempted to “modernize” auditor independence rules it was the Securities and Exchange Commission, in 2000, before the Enron failure and Arthur Andersen’s demise, as a result of the growing concern that firms increasing focus on consulting was distracting them for their core purpose, auditing. The Big Four firms are now opportunistically lobbying to go back in time, before Enron, when the industry was self-regulated and mostly left alone, able to have as many conflicts of interest as their powerful public clients would allow.


    The Legacy of Mary Jo White

    By • Nov 21st, 2016

    Mary Jo White became the 31st Chair of the Securities and Exchange Commission on April 10, 2013. Last week she announced she would be leaving the job when President Obama leaves office. Here are some links to recent articles and a few choice ones from the past.


    More On My Reuters Breakingviews Column: The Andersen Tax Name Grab

    By • Sep 8th, 2014

    The news that a tax consulting firm made up of ex-Andersen partners would take the Andersen name garnered much media attention, as you might expect. It says something—but maybe not what the firm’s partners think— that so many years after the destruction of Arthur Andersen by criminal indictment—thirteen years—so many people care.


    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.


    GlaxoSmithKline Keeps Name of PwC Lead Engagement Partner Under Wraps

    By • Dec 30th, 2013

    Does the PCAOB’s proposal on naming lead audit partners for US listed issuer audits contemplate any exemptions? No, but they do exist in the jurisdictions that say they hold lead audit partners accountable.


    Call of Duty: Who Has The Last Word On “Network” Audits of US-Listed Companies?

    By • Dec 10th, 2013

    Who has the last word on audit quality and compliance with GAAP and SEC filing requirements for US-listed foreign companies? If you were hoping it was the US audit firm, you’ll have to prove your case in court.


    Competition – Some Thoughts

    By • Sep 2nd, 2013

    If you read my writing about University of Chicago Booth School of Business Professors Chad Syverson and Joseph Gerakos and their paper on audit market exits, you may be interested in this post. It’s one of my first and it’s about the last GAO report on audit market competition.


    The Problem Of An Audit Firm Market Exit: New Research From University of Chicago Booth School of Business

    By • 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?


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