Archive for the ‘The Big 4 And Globalization’ Category

It’s Mine, Mine All Mine: Can Anyone Catch Lehman Stealing?

By Francine • Feb 22nd, 2010

Most of what’s been written about the financial crisis and firms that were forcibly acquired, bailed out, or that failed tends to focus on “fair value” as the feckless culprit.What are the auditors’ obligations with regard to clients’ fair value measurements and disclosures? Auditors do not determine fair values. Instead, their role is to, “test management’s fair value measurements and disclosures.” But that obligation is broader than just taking the word of the “masters of the universe.”


Continuing The Conversation: If Auditors Weren’t There, Why Not?

By Francine • Dec 14th, 2009

“If not, why not…” We’re talking about the auditors’ failure to be a force either before, during, or after the financial crisis…Only legally required compliance keeps us walking like dizzy children through in this hall of mirrors, never reaching the exit and sunshine.


They Weren’t There: Auditors And The Financial Crisis

By Francine • Dec 7th, 2009

When I ask, “Where were the auditors?” and decry the fact that “they weren’t there,” it’s not due to some unreasonable, unfair focus on the most milquetoast of potential culprits. I bang this drum because the auditors should have been there, as a last stop, where the buck should have stopped, as gatekeepers, watchdogs, advocates, and the last bastion of standards and expected values shareholders can look to.
But they weren’t.


Going Concern Audit Opinions: Why So Few Warning Flares?

By Francine • Sep 18th, 2009

When each of the notorious “financial crisis” institutions collapsed, were bailed out/nationalized by their governments or were acquired/rescued by “healthier” institutions, they were all carrying in their wallets non-qualified, clean opinions on their financial statements from their auditors.


Auditor Independence: Will “Crisis” Cause Compromise?

By Francine • Aug 13th, 2009

Given the pressures on costs and the longstanding ties some finance, audit, and accounting executives have with the accounting firms, it is not surprising that the weakening of the independence commitment may come from the companies themselves. What’s the downside for them? The potential for scrutiny by corporate governance experts and journalists? You can’t argue with a recession. And in the event of an accounting scandal or restatement, plaintiff’s lawyers will have an uphill battle to penetrate the impenetrable auditor liability shields and caps.

What’s lost in all of this discussion of efficiency and cost cutting?

Independence protects shareholder’s interests.


PwC And Satyam: It’s Bigger Than A Blown Audit

By Francine • Jul 24th, 2009

US and Indian regulators and investigators are focusing on the wrong thing when investigating the Satyam scandal. It’s not the audit failure that’s most important.

Follow the money.


PwC Global Board: “Risk And Quality Top Priorities”

By Francine • Jun 30th, 2009

Risk and Quality. Territory- and client-focused reviews. Tone at the top. PwC Experience. Network of the Future. Accountability. Regulatory environment. Implications of recent rulings and settlements.

Quite a full plate for this Global Board. And that’s only the first paragraph after the introduction. Granted, this email is for general distribution to all partners worldwide and probably pretty sanitized, given the possibility it could be inadvertently distributed outside the firm. (Tee hee.)

But the message it clear. A hard rain has already started to ruin PwC’s parade.


Satyam, SocMed, BDO International, and Sunshine

By Francine • Jun 26th, 2009

It’s been a very hot few weeks here in Chicago. After last weekend’s thunderstorms, we’ve had temperatures between 85-90 or so all week. (That’s 30-32 C for you metric folks.)

Needless to say, Rosie Rott and I have been drinking a lot of liquids. I feel like a broken record telling everyone at an event last night, “It’s about time we had hot weather. Wasn’t that a lousy winter we had, worst ever? I blew five tires from potholes. Oh, how I wished I was in Mexico. Better sunshine than snow. I just turned off my heat on Memorial Day weekend…”

Such is the nature of chit-chat.

It’s been a busy week for me, in spite of the fact some of you may complain about the lack of a new blockbuster post.


How Satyam Supported PwC’s Schizophrenic Strategy To Reenter The Systems Integration Business

By Francine • May 26th, 2009

Independence is one of the most important concepts a public accountant must grapple with. Before the technical standards, before the decisions about classification of transactions, before the methodologies, checklists, and workpapers, before any mechanical pencils are pumped with lead, one must decide whether to accept the client, and every subsequent engagement for that client, based on the codified standards for independence and objectivity, as well as one’s appetite for risk…To reenter the systems integration business, PwC had to find a way around their own weakness in technology leadership, lack of experienced resources, and the constraints of the IBM non-compete agreement.

Enter Satyam.


It’s A Race To The Finish – But There Are No Winners

By Francine • May 11th, 2009

Not so long ago, Dennis Howlett and I went public with a bet:

Which Big 4 audit firm is the next to fail?

Dennis believes that I’m betting on PwC as next to fail. I don’t honestly remember committing to that, but I’m willing to go with it for the sake of argument. This is in spite of the fact that the other Big 4 have plenty to worry about and the next tier firms are in no way ready for prime time.


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