• Accounting News Roundup: PwC’s Oscars Flub | 02.27.17

    By | February 27, 2017

    Oops

    Well, in case you went to bed early last night, here’s what you missed:

    In what was surely the most shocking moment in Oscars history, Faye Dunaway announced the wrong winner for best picture at the end of the ceremony, awarding the trophy to “La La Land” when it actually was supposed to go to “Moonlight.” It turns out that Dunaway and her co-presenter, Warren Beatty, were given the wrong category envelope, so the actors announced the wrong winner, leading to the wrong filmmakers to begin their acceptance speeches for an award they hadn’t actually won. But it took several minutes for the Academy Awards producers and accountants to rectify the mistake and get the actual winners onstage to accept their award.

    Yes, after all the hype, after that briefcase traveled all across to the country to get groped by PwC employees, after standing there all night not being able to go to the bathroom, something went terribly, terribly wrong. Here’s what USA Today reports:

    The night’s true drama kicks in when La La Land filmmakers take the stage to accept best picture. The accountant from PriceWaterhouseCoopers jumps up and says, “He (presenter Warren Beatty) took the wrong envelope!” and goes running onstage. Craziness breaks out. No one knows how Beatty got a best actress envelope; [Emma] Stone later tells reporters in the media room that she has been holding her envelope the entire time.

    I mean, just look at this chaos on stage and PwC partners Brian Cullinan and Martha Ruiz are right in the middle of it:

      Naturally, Twitter reacted (and is still reacting). And the firm put out a statement with an apology to, uh, basically, everyone

    That statement came out in the early morning hours but there are still questions. Here’s the New York Times:

    Many details remained unclear on Monday morning, including how the envelopes were handled backstage before Mr. Beatty and Ms. Dunaway came out and why the error was not corrected more swiftly. Three “La La Land” producers had given acceptance speeches before the mistake was announced.

    Honestly, you couldn’t write a worse scenario for PwC. Their flawless method failed, it happened for the most important award, on TV in front of countless people and NO ONE can really explain why. (Of course, if you can explain, then you should email us.) The Academy is going to want answers. And the question everyone is wondering — will this be curtains for PwC? Here’s what Michigan business professor Erik Gordon told USA Today:

    For a company of accountants who prize themselves on their commitment to accuracy, an event that typically burnishes their credibility quickly devolved into a global crisis.

    Accounting is a “credence good,” which means “customers don’t know to evaluate” it unless something goes wrong, University of Michigan business professor Erik Gordon said.

    “You trust in the name. If you understood accounting, you wouldn’t need PwC or KPMG or any of them,” Gordon said. “It’s a reputation good. This is the most public goofup an accounting firm could make. Accounting firms are in the background.”

    Now they’re the stars. Or villains maybe? Tragic figures? Someone’s going to write a screenplay about this, I’m sure.

    Elsewhere in Oscar screw-ups: Australian Producer Mistakenly Included in Oscars ‘In Memoriam’ Segment

    Accountants behaving badly

    Okay, perhaps you think we should’ve saved this section for PwC, but I think it’s more suitable for accountants with malicious intent:

    Court records say Jamie Nall, 34, of St. Peters, forged 92 checks totalling more than $84,000. The checks were forged with the name of the business treasurer between December 2014 and June 2016 and put into two accounts belonging to Nall, police say.

    I think the moral of this story is that no matter how small you make the checks, something is still going to look fishy. 92 checks in under two years doesn’t seem reasonable these days.

    Previously, on Going Concern…

    Rachel Andujar wrote about ways to prevent busy season fire drills. Adrienne Gonzalez wrote about kittens.

    In other news:

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    • Goodwill Hunting

      That red dress though.

      • willie phuister

        my thoughts were of an overstuffed burrito…

    • Andrew

      This “engagement” is going out for bid next year!

    • Big4Veteran

      Most people around the world probably got a good laugh out of this whole thing. “Look at those stupid accountants who had one easy job to do yet still fucked it up.” PwC will be a punchline for a while, but I think this will all blow over relatively quickly outside of Hollywood. However, inside the industry I guarantee you a lot of people were PISSED last night. They take this Oscars shit seriously. The people from La La Land did show tremendous grace last night, but all these people are egomaniacs who are obsessed with image. Off camera they were fuming. Perhaps they’ve calmed down a bit this morning. I doubt it.

      PwC has some major repair work to do in La La Land. The people who run the Academy are all Hollywood insiders. Last night’s fuck up was a nuclear meltdown level event.

    • Bloviator
    • McValue Meal Audit

      Hilarious…what I would pay to be in the meetings taking place this week at p-dubs

      • Big4Veteran

        I imagine there was an “all hands” conference call with a bunch of partners late last night. They had the PR firm working on the press release, and the partners were discussing their strategy for how to smooth things over with the Academy. I’d bet a contingent of big wigs from PwC showed up at the Academy’s offices this morning to do some big time groveling.

    • Big4Veteran

      Prediction: Next year there will be four partners at the Oscars instead of two. Two teams of two on each side of the stage. One partner will be responsible for reviewing the other’s envelope before it is given to the presenter. Also, the National Office will develop a checklist to be completed and signed off by both partners before each envelope is handed over. Finally, at the Academy’s insistence, the partners will have their cell phones confiscated during the show so that they can remain focused on the envelopes and not taking pictures of and tweeting about beautiful young starlets.

    • Brundlemox

      I’m sure the response from the two Partners was delayed because they were trying to figure out how to blame the screw up on an Associate.

    • Agent Oscar Wallace

      A few of us former whipping boys were discussing this at lunch. Would there even be an RFP process? There is no way PWC receives a fee for this and a couple of us even took the take that PWC may even pay for the gig.

      • Big4Veteran

        PwC does get paid for the work it does for the Academy, but I’m pretty sure they would do it for free if they had to. I think they probably need to get paid for the audit, for independence reasons?

        That said, this isn’t about fees. It’s about publicity with a massive worldwide audience. Any of the other three firms would surely give their left nut to get the Academy as a client.

    • Andrew Y

      I don’t work for pwc, but the impact this will have on their business or brand is nil. Mistakes happen, and they did the right thing owning it quickly and I’m sure it will never happen again. So stop with the nonsense conjecture about whether this will be curtains. I highly doubt they will lose a single meaningful client.

      >>And the question everyone is wondering — will this be curtains for PwC? Here’s what Michigan business professor Erik Gordon told USA Today:<<

      • Big4Veteran

        There is only one client that they might lose because of this. But I guarantee you that one client is highly meaningful to PwC.

        • Andrew Y

          I don’t work there, so not sure who you are referring to. But if it is an industry client or the Academy itself the fees are deminimis. Other than some prestige loss (short term) they won’t feel a thing. In the US they probably are a $12B firm.

          My hunch is they won’t lose that awards gig either.

    • SnarkyAuditor

      They should have had a control in place to provide assurance they don’t hand the wrong envelope to the presenter. Wait – they do – they put the category name on the outside of the envelope. Was Warren Beatty drooling over Emma Stone as she came off the stage too, preventing him from looking down at the envelope? Or did he not want to wear his glasses that make him look old? Can we give the presenter at least 1% of the blame?
      That being said, you had one F-ing job . . .

    • Corporate Liaison

      if you review the tape it seems that Beatty knew something was wrong. He dips into the envelope twice to see if there is another card. He knows what the card says and then hands it to Dunaway. Also how in the world does an award card for an award already announced make it into the mix. There should be only one envelope remaining at the point when Best Picture is due up