• Accounting News Roundup: Fired KPMG Partners and Tax Return Selfies | 04.12.17

    By | April 12, 2017

    Fired KPMG partners

    By now you’ve probably heard that six KPMG employees, including the head of audit and 4 other partners, have been fired for receiving confidential information on the PCAOB’s plan for its inspection of the firm’s audits. The Wall Street Journal reported yesterday that Scott Marcello, the firm’s Vice Chair of Audit, as well as David Middendorf, the firm’s national managing partner for audit quality and professional practice were two of the partners let go.

    The weird thing about this whole situation is why these people felt like they needed the advanced notice of the PCAOB’s plans. Do they not have confidence that their audits are up to snuff? And if so, why take the risk? A professor quoted in the Journal wonders the same thing:

    The news of the leak is “pretty eye-opening,” said Bryan Church, an accounting professor at the Georgia Institute of Technology. “These guys feel enormous pressure dealing with inspectors, and they do stupid things,” he said.

    Yeah. Really stupid things. Remember last year when the PCAOB told auditors to stop altering workpapers? It’s like people can’t help themselves. And now we learn that a half dozen people at KPMG including bigwigs in their audit practice couldn’t resist leaked info from the PCAOB? This doesn’t strike me as a complex ethical dilemma. But if the Vice Chair of Audit and the guy in charge of audit quality are complicit, what does that suggest?

    File your taxes, already

    I feel like most accountants fall into two camps when it comes to filing their own tax returns: 1) Those who file early; 2) Those who file late. The period in between is not really eligible unless you’re MFJ and your partner picks up the slack. Still, I can’t imagine many accountants letting their non-accountant spouses take charge of that chore.

    Anyway, with just a few days left until the spring deadline, there’s no shortage of people who still haven’t filed and they’re likely to read a slew of tax-filing related articles as a result. For example, Alabama residents can “securely” file their tax returns with an app called eID that verifies identities with selfies. But just because you can, doesn’t mean you should:

    A report from October found that the FBI now has 117 million American’s photos in its facial recognition database. That database has been in development for years and is a major source of controversy among privacy advocates. Guess who built that database? Yup, MorphoTrust, the same company that built the eID app. They also built and maintain the facial recognition databases for the Department of State and the Department of Defense. (pdf link) Can’t imagine a nightmare scenario in which those databases get crossed, nope.

    Elsewhere, if you or a client still haven’t filed, this article has ideas for being “Mindful When Filing Your Taxes.” It’s the perfect thing to troll your most fervent anti-tax friends and clients

    Previously, on Going Concern…

    The KPMG thing. In Open Items, someone who’s graduating without a job lined up wants some advice.

    In other news:

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    • sludgemonkey

      Who is KPMG?

      • Non_chargeable

        It’s one of the big 4 firms

        • sludgemonkey

          Thanks, they must not be very successful. They don’t have their name on any buildings downtown that I can find.