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Yesterday’s column at American Banker digs into the accounting for JP Morgan’s reported “hedge”. I was shocked – OK, not really – that no main stream media outlet had explained the stunning announcement made by Jamie Dimon last Thursday.
Chesapeake Energy’s auditor is PricewaterhouseCoopers. The auditor is paid lass than $3 million to prepare an opinion on this challenging company. Sometimes you can be paid too little to be sufficiently skeptical…
There are still many unanswered questions about how and why the financial crisis frauds occurred. New frauds, such as the Chinese reverse merger frauds, took advantage of a public listing loophole that the SEC and auditors missed. All these investor losses occurred under the supposedly watchful eyes of auditors, who are paid dearly to protect shareholders but in many cases are either complicit, incompetent, or both.
I was the first to report on December 6 the irony of Deloitte having been selected by, of all banks, JP Morgan Chase. The high likelihood of a conflict between the bank and the audit firm, and possibly the individual Deloitte partners assigned to the JP Morgan Chase review, should have been obvious to anyone at the OCC. It turns out I was right.
re: The Auditors has seen a confidential, internal Deloitte training document, prepared this past summer, that reveals the firm expects the worst when the inspection reports for their 2009, 2010, and 2011 audits are published by the PCAOB. Is Deloitte truly committed to a sea change in tone as well as technique? I’m not convinced.
Let’s not forget PricewaterhouseCoopers, MF Global’s auditors.
When it comes to hands-on access to private information, the auditor has more than any other regulator mentioned. And they are supposed to be experts in that client’s business and in the accounting and auditing standards for that industry. PwC also audits JP Morgan, Bank of America Merrill Lynch, and Goldman Sachs. They are all large players in the futures brokerage industry.
Almost everyone wondering where the missing MF Global customer assets have gone thinks they will show up eventually. I believe the assets are long gone.
The Sarbanes-Oxley Act of 2002 and Dodd-Frank’s clawback provision both require a restatement. The restatement of financial results to correct material errors – whether those errors occurred by default or by design – is a necessary condition for enforcing both the Sarbanes-Oxley Section 304 provision and the new Dodd-Frank law.
The topic of audit industry reform is hot again. OK, that’s relative to where you stand on what’s hot. But in the world of legal and regulatory compliance and auditors the only thing hotter would be a significant development in the New York Attorney General’s case against Ernst & Young.
Going Concern reported yesterday that KPMG professionals have been ordered to preserve all correspondence and documentation related to the tax “loaned staff” assignment it has with long-time client GE. That means someone – the SEC or PCAOB – is investigating.
 Francine McKenna (@retheauditors) has more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad. Look for my column, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. Your firm can sponsor this specialized news site. For more information contact Francine McKenna, fmckenna@mckennapartners.com |
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