Archive for the ‘Regulators, Laws, Standards, Regulations’ Category

Auditor Independence: Another Case of Misplaced Loyalty

By Francine • Sep 2nd, 2014

Ryan Adams testified on behalf of PwC in an important court case. How can PwC be independent of Adam’s employer Marin Software, and Adams, the Financial Reporting Director at this newly public PwC-audited client company, if he’s testifying on PwC’s behalf in litigation that could impact PwC’s business model in California and, perhaps, nationally?

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US Department of Justice v KPMG: Document Shows “Too Few To Fail” Was Opening Premise

By Francine • Apr 19th, 2014

A new KPMG tax shelter era document surfaced, in original format, that had not yet been cited or quoted from in any media reports. The document tells us that late in the negotiations, June 27, 2005 the DOJ still would not agree to all of KPMG’s terms, including promising not to criminally charge the firm. But the decision to make sure the firm did not “go under” had already been made. KPMG and its Skadden attorneys only had to make sure the DOJ didn’t, in a misguided show of sheer aggressiveness, cause another Arthur Andersen.

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Not That Satisfying: SEC Slams KPMG For Independence Violations

By Francine • Jan 28th, 2014

It’s been almost three years since I first broke the story of KPMG’s loaned tax staff arrangement with audit client GE. On January 24 the Securities and Exchange Commission (SEC) announced an $8.2 million settlement with KPMG over violations of auditor-independence rules. The wheels of justice turn very slowly. But the GE case was not one of the three cited as the subject of the enforcement action.

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Winning! PwC Argues Both Sides Of The Partner Naming Debate

By Francine • Dec 19th, 2013

How do the audit firms keep winning the war while losing battles left and right? They use the law and the courts to delay, deter and distract from transparency by settling, and sealing what they can, before the public can find out what silly arguments they often make in their defense.

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Naming Them: Why Markets Deserve To Know Audit Partner Names And More

By Francine • Nov 24th, 2013

We now know more about what the firms have been hiding. The global capital markets, not just current shareholders, need full disclosure of the engagement teams on all public issuers over time, and in a way that is easily accessible.

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On Herbalife And The Slow Death Of Value Investing

By Francine • Aug 3rd, 2013

Big egos making shares move by waving their wands. That makes picking stocks based on fundamental analysis more than slightly anachronistic. A bit about Herbalife…

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In Pari Delicto: Can A Law Make It Go Away?

By Francine • Jul 27th, 2013

Pete Brush at Law.com did a story last week about a story about in pari delicto, the adverse interest exception, and holding third-parties like auditors liable for fraud in bankruptcy cases. I was quoted.

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Early Returns: Scott London, KPMG and Another Partner Trading On Inside Information

By Francine • Apr 15th, 2013

This is the fourth big insider trading case in the least few years against a senior tenured partner that betrayed the public’s trust. In none of the cases did the firm’s “extensive” and “comprehensive” independence compliance programs spot the behavior or the illegal actions. Stay tuned. There will be much more to this story, I guarantee.

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E&Y, Their Audit Client Wal-Mart, and Value Pricing

By Francine • Mar 23rd, 2013

This post about Ernst & Young’s aggressive tax advice to audit client Wal-Mart was originally posted October 29, 2007. It’s worth everyone – I’m talking to you SEC and PCAOB – taking another look at this given Wal-Mart’s new Mexican bribery problems and the SEC investigation of Ernst & Young for tax lobbying to audit clients. (Ernst & Young has been silent and left out of most media discussion about Wal-Mart’s FCPA problems in Mexico and elsewhere.)

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Tax Pays: HP Pays Ernst & Young Two Million To Testify

By Francine • Feb 18th, 2013

The issue of tax avoidance by corporations is a hot one. In the US and in the UK, legislators and pundits seeking “tax justice” have changed the discussion from one of tax breaks that stimulate “jobs and growth” to one of tax fairness to provide much needed funds for public works and public commitments in times of economic hardship. The Big Four audit firms play all sides like a fiddle.

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