Why Do Accounting Firms Feel the Need to Vigorously Defend Themselves?

The other day, news came out that a class action suit had been filed against KPMG. I know, I know, it's like every other week some accounting firm is getting sued for something. Of course, KPMG wanted to make it clear that they would "vigorously defend" themselves in court:

Siskinds LLP, Siskinds Desmeules and JSS Barristers today announced the filing of proposed securities class actions against KPMG LLP in Ontario, Alberta and Québec.

With respect to these legal actions taken relating to Poseidon Concepts Corp., we are confident that our services were provided in accordance with all applicable professional standards and the firm intends to strenuously defend the litigation.

While KPMG rejects the accusations and will vigorously defend itself in court, we have no further comment as the matter is currently before the courts.

That language felt a little familiar, either because accounting firms are constantly "vigorously" defending themselves in court or... no, never mind the or, that's the reason.

So it got us thinking, what happens if we Google it? The results were really not surprising.

Google "vigorously defend" + Deloitte and you get tons of results, some of which you may ring a bell: Parmalat, Navistar, Booz Allen Hamilton, Livent. It's so pervasive in the Deloitte vernacular that it is used outside of the realm of lawsuits on Deloitte's own webpage:

As enterprises become more global and virtual, many leaders recognize that they must vigorously defend their brand against the threat of saboteurs. But are disgruntled customers and aggressive competitors the biggest threats to brands? Or are intentional or accidental disruptions from within even more dangerous?

The hilariousness of an article about brand defense by a firm that seems to be constantly vigorously defending itself is not lost on us, dear reader.

It goes way back, too. Check out this May 1993 article from the New York Times:

The Resolution Trust Corporation filed a $250 million lawsuit today against Deloitte & Touche and several of its former partners, contending that faulty audits were performed at Centrust Bank, a Florida savings institution that failed three years ago.

Deloitte said that it "would vigorously defend its work" and that its "audits of Centrust's financial statements were performed in accordance with professional standards and guidance."

Well, maybe it's good that Deloitte vigorously defended themselves or they may have settled for far more than the $250 million they actually ended up paying to the RTC and FDIC for the Centrust failure.

Guess who else gets in on the action? PwC of course. Recently, they've vigorously defended themselves against Grant Thornton claims at that (if that doesn't make you chuckle, I don't know what will):

Grant Thornton, joint administrators of the failed Irish company Quinn Insurance, is suing PwC for €1bn (£860m) over accusations of negligent auditing in the run-up to the company's collapse.

PwC described the proceedings as 'unjustified and devoid of merit'. The firm stated: 'We stand by the quality of our audit work and we will vigorously defend these proceedings.'

Guys, we get it. Is there any way other than vigorously to defend yourself? Ask any alcoholic accused of drinking too much. We don't expect you to lazily defend yourselves. Or lackadaisically. Or haphazardly. No. VIGOROUSLY.

Too bad they don't treat quiet settlements the same way they do accusations and lawsuits, it would be a lot more fun if they vigorously signed those settlement checks, lotto winner style.

 

 

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