• Archive for the ‘Latest’ Category

    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.



    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



    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.



    Update: McKenna at the University of Chicago’s Stigler Center

    By • Aug 5th, 2017

    I’ve updated the post to point to some recent news about PwC and banks that failed in Ukraine and Spain… I returned to Washington D.C. and my job as a journalist at MarketWatch in late June, after almost three months as a Journalist in Residence at the Stigler Center at the University of Chicago Booth School of Business. My fellowship deliverable, in exchange for the opportunity to study with the researchers, was three posts for the Center’s Pro-Market blog on the state of the audit industry.



    TBW Plan Trustee v. PwC: A Look at What Led To It and What’s Next

    By • Sep 25th, 2016

    Here’s a brief look at the TBW Plan Trustee v. PwC trial, what led to it and what’s next.



    @MarketWatch: IEX Becomes an Exchange

    By • Jun 26th, 2016

    Word got out early that the SEC would approve IEX’s application to become a stock exchange on Friday the 17th. As usual, the leak traveled to the big media outlets earlier that week and then the rest of us waited for announcement from the SEC all day.



    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.



    Auditors Can Be Whistleblowers: A Guest Post On Recent Developments In Whistleblower Case Law

    By • Jan 5th, 2015

    Several recent developments regarding auditor whistleblowers should be of interest to internal and external auditors and compliance professionals, whether they work for a public company or a professional services provider.



    “Tax Avoidance On An Industrial Scale” Says British MP About PwC’s Luxembourg Work For AIG And Others

    By • Dec 10th, 2014

    British MP Margaret Hodge grilled Kevin Nicholson, of PwC’s UK tax practice, in a Parliament Public Accounts Committee hearing on Monday. You know you’re on your “back foot” when the first thing out of your mouth has to be a denial that you lied under oath. More details about PwC’s tax avoidance scheme for audit client and US government owned AIG.



    New At Forbes Online: The Precarious Financial Position Of The New York Times

    By • Nov 11th, 2014

    Update: This column was linked to by the NYT Public Editor! I published some New York Times numbers over at Forbes.com, “Time Is Running Short For The New York Times”, in anticipation of the company’s 3Q earnings announcement on October 30.