Accounting News Roundup: Failing to Predict Failure and Unauthorized Tweeting | 02.28.17

By | 3 months ago

Failing to predict failure

One thing that I’m still confused about in this whole PwC/Oscars debacle is the plan of action — or lack thereof — in case the wrong winner was read on stage. Here’s what Brian Cullinan told the Huffington Post, in a now jinxiest interview ever conducted:

Should a presenter declare a false winner for any reason, they are prepared to tell the nearest stage manager, who will immediately alert the show’s producers.

Cullinan and [Martha] Ruiz, who spoke to The Huffington Post last week, say the exact procedure is unknown because no mistake of that kind has been made in the Oscars’ 88-year history.

“We would make sure that the correct person was known very quickly,” Cullinan said. “Whether that entails stopping the show, us walking onstage, us signaling to the stage manager — that’s really a game-time decision, if something like that were to happen. Again, it’s so unlikely.”

What’s remarkable is that this is pretty much what happened! The show was stopped, they walked on stage and the stage managers were running around in their headsets. Everything broke down and the problem became immeasurably worse, however, because by the time all this occurred, the wrong winners were already on stage making speeches. When the La La Land producer shouted that there had been a mistake and that Moonlight was the winner, the whole scene turned into utter chaos and it was embarrassing for everyone. This happened on the biggest award of the night while millions of people watched on TV.

On paper, because PwC didn’t think that a mistake of this magnitude could happen, they also didn’t think of what it would actually be like if it did happen. In their minds, the wrong winner for Best Makeup gets read, Cullinan or Ruiz dash out there to stop things and the next day the media has a little bit of a chuckle about it. Never in their wildest dreams did they think it would happen this way or that it would result in pandemonium.

The plan of, “I guess we’ll stop a live broadcast that millions of people are watching,” is a bad plan at best and not a plan at all at worst. And this is probably the biggest mistake PwC made: They failed to plan for the unpredictable and the worst — and I mean WORST — case scenario.

Damage control

One of the worst things CEOs have to do is deal with embarrassing situations and, yeesh, PwC’s Tim Ryan has a doozy. He gave an interview to USA Today yesterday afternoon to issue a mea culpa:

“At the end of the day, we made a human error,” Tim Ryan, U.S. chairman and senior partner of PwC told USA TODAY on Monday. “We made a mistake. What happened was, our partner on the left side of the stage, Brian Cullinan, he handed the wrong envelope to Warren Beatty. And then the second we realized that, we notified the appropriate parties and corrected the mistake.”

Ryan also said that he has called the Academy of Motion Picture Arts and Sciences to apologize and take responsibility. He also said he’d be speaking to “the other affected parties” but hadn’t done so yet. Also, apparently he had to cancel on Anderson Cooper under orders from the Academy, so that’s awkward.

Most experts don’t believe this will have long-lasting impact on PwC’s brand, but in the firm’s entertainment and media teams might have some interesting conversations over the next week or so.

Unauthorized tweeting

As for Brian Cullinan, his backstage tweets are allegedly the source of all this trouble:

Mr. Cullinan’s backstage Twitter activity wasn’t sanctioned by the Academy, according to a person familiar with the matter. He’d sought permission to post to social media during the show, but had been turned down, this person added, because his job was only to distribute and verify the envelopes containing the closely guarded names of winners.

I think this where the not-at-all clever shouts of “You had one job!” kinda have a point.

When it rains, it pours

Oh, and how’s this for adding insult to injury:

Not only did the firm’s Academy Award auditors accidentally mix up envelopes, causing chaos when the Best Picture Oscar was handed to the wrong film, but PwC was also dealt a blow in the UK.

The industry watchdog announced it was investigating PwC over its audit of business technology firm Redcentric’s accounts.

The Financial Reporting Council said its investigation would “consider, but not be restricted to, issues regarding misstated accounting balances”.

It’ll get better.

Previously, on Going Concern…

Plenty of PwC coverage, obviously. Also, The Siegfried Group, one of Accountingfly’s Firm Partners, wrote about networking.

In other news:

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