• In Service

    By • Jul 7th, 2008 • Category: Pure Content


    Back about a year ago, I wrote about PwC’s muck-up in Moscow and fiasco in Japan and lamented,

    …not surprised to see PwC run away whimpering like a girl in Moscow. My Google Alerts have been beeping all week with commentary regarding their latest about-face. But that coverage has been almost all from media outside the US. It’s like the US media believe that no one knows or cares about what the firms do outside the US. Do they think that their readers can’t spell Yukos or Russia (or Chuo Aoyama)….

    Later in the post, I included a comment by Mark Cheffers of Audit Analytics.  Mr. Cheffers is also a published author on accounting ethics.

    …Maybe so… This week’s issue of the Economist has a quote by Mark Cheffers of Audit Analytics, whom I met in Washington DC at the Compliance Week Conference:

    “…PWC’s volte-face seems unlikely to hurt it elsewhere in the world because of its federated structure: Mr Kubena says that the decision to withdraw the audits was the Russian firm’s and entirely appropriate given the new information. Any controversy is likely to be discounted by outside observers as an unfortunate fact of Russian life, particularly where Yukos is concerned. “I doubt events in Russia would have any effect on perceptions of PWC in America,” says Mark Cheffers, boss of Audit Analytics, a research firm. Instead, the likeliest victim of the saga is that normal, functioning economy of which Mr Kubena used to speak.”

    When we met, Mark was very nice, curious, interested in the blog. But I never heard from him again. His clients are the firms and I, even then, realized that once the blog caught on, I was not only going to have auditors wary of me, but also the companies who make their money off of the auditors.

    Little did I know that he was probably, at that very moment, contemplating service to the Center for Audit Quality (CAQ), which is, in effect, “in service” to the Big 4 plus. For the March 2008 report on audit vs. non-audit fees we see the following credit given:

    …Earlier this year, the Center for Audit Quality commissioned Audit Analytics to conduct independent research on trends in audit vs. non-audit fees paid to the independent auditors. The Audit Analytics auditor fee database contains all fee data disclosed by SEC registrants in electronic filings since January 2001…

    The report issued by CAQ in January of 2008 includes a shout-out to another firm:

    …Because of the competitive significance and litigation sensitivity of much of this information, ( also, because these firms are partnerships, firm-specific information implicates directly the privacy and confidentiality interests of a large number of people,) data from each of the individual firms have been aggregated with the assistance of CRA International, a leading economic consulting firm, to produce the information contained in this report.

    Also on the CAQ web page devoted to summarizing these disclosures to the ACAP. Which law firm managed the overall project?

    …In overseeing the data collection, the CAQ developed a series of templates for firms to use in gathering data and engaged the services of an outside law firm that managed the project to ensure that data was accurately aggregated and fairly analyzed…

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    1. […] a few journalists, once bold, who are now afraid to touch the topic. The mantra, reinforced by the Center for Audit Quality, the standard bearers who seem to be on every advisory panel, and the firms’ lawyers, goes […]