• Big 4

    PwC Is Having a Really Rough November Already

    By | November 5, 2012

    Yeah so first this happened:

    On Wednesday the FDIC, as receiver for the Colonial Bank of Montgomery, Alabama, sued PricewaterhouseCoopers and Crowe Horwath in federal court in Montgomery, claiming that they committed professional malpractice and breach of contract by failing to detect that two Colonial employees helped the notorious (and defunct) mortgage lender Taylor Bean poke hundred-million-dollar holes in Colonial's balance sheet. (PwC was the external auditor and Crowe Horwath performed internal audits.)

    "All the time that (Taylor Bean) was carrying out an increasingly brazen and costly fraud against Colonial, PwC and Crowe never realized that many hundreds of millions of dollars of bank assets did not exist, had been sold to others, or were worthless," wrote the FDIC's counsel at Bailey & Glasser and Mullin, Hoard & Brown. "Missing huge holes in Colonial's balance sheet and serious gaps in internal control, PwC and Crowe continued to perform auditing services for Colonial without ever detecting the (Taylor Bean) fraud. Had they performed their auditing work in accordance with applicable professional standards, they would have learned of the TBW fraud in time to prevent additional losses suffered by Colonial."

    And then this happened:

    Lawyers representing customers of MF Global Holdings Ltd. added accounting firm PricewaterhouseCoopers LLP to a civil lawsuit against former executives of the failed securities firm, saying PwC failed to adequately audit MF Global's internal controls.

    Now, back when we were all working ourselves into a lather over the what ifs, reason and precedent dictated even back then that PwC didn't really have much to sweat over.

    Our friend Francine McKenna – who has been sporting a lady boner over the MF Global scandal from the get-go – once called the PwC/MF Global relationship "too cozy" for her taste, writing last year:

    CME Group couldn’t have been hoodwinked like that if PwC had been doing its job all along. You can't circumvent controls unless there are none or there are holes. It was PwC’s job to review controls and the adequacy of policies and procedures to support them.

    PwC lawyers probably aren't freaking out just yet, they already had in pari delicto work in their favor in 2011 after AIG shareholders came after them.

    We're not sure how PwC's November could any more annoying right now, unless of course Twitter suddenly outlaws the use of hashtags.

    Hang in there, guys, we're here if you need to talk!

    • BIG4Inches

      Visiting this website a couple a times a week has led me to believe that PwC was infallible and the best of the best, I guess not.

    • Kkk

      PWC is the worst big4.

      • Guest

        I agree.  PwC is much worse than Deloitte, Ernst & Young, and McGladrey.

        • CPA4Obama

          Definitely.  The good part about this is now that PwC has been exposed as a joke the real accounting firms like McGladrey can start reaping the benefits.  It’s win-win for everyone who isn’t a PwCailure.

          • Guest

            You lost me at real and McGladrey without a “get” before “real.”

    • Informed

      PwC Sucks

    • DewPointTemp

      PWC could suck a golf ball through a garden hose

      • Gust

        Ha ha “You men (PwC) are pukes.  You are the lowest form of life on earth.  You are not even fucking human beings.  You are nothing but grabastic, disorganized pieces of amphibian shit!”  Full Metal CPA baby.

    • cool story brah

      PwC didn’t detect anything wrong because the audit fee checks continued to roll in.  As far as they’re concerned those assets definitely existed.

    • Guest

      It’s all the same where ever you go. With regards to providing reasonable assurance on a “sample” basis, I have no idea how each firm’s inane rule of choosing a sample of 25 (or 40 or 60 or whatever it may be) gets you any sort of comfort over anything, especially when you have hundreds of thousands of transactions at broker dealers.  Guess as long as you check off the box, firm’s good right?

      Waste. of. time.

      • Pinkerton

        Please have your college refund you for any statistics course you took.

        • Just Sayin

          Statistics = reasonable?

          If yes, please forward message to PCAOB so everyone can chill the eff out.

    • DownUnderAuditor

      Pretty much every time that McKenna woman opens here mouth, she spouts something stupid.  Let’s look at here latest contribution:

      “You can’t circumvent controls unless there are none or there are holes.”

      This is ridiculous.  Anyone who has ever had to design or to audit a system of internal control knows that you cannot design a 100% perfect system.  All internal control systems are vulnerable to fraud, particularly if senior management is involved or if there is collusion.  The auditing standards themselves will tell you this.

      McKenna seems to have made a successful career by being a rent-a-quote whenever someone wants to criticise the audit profession, but to any knowledgeable reader, her credibility and integrity must be zero.

      • Replying to DownUnder

        Agreed. Every profession has its rent-a-quote people who can give journalists reliably hot quotes to get their names in the press. Don’t be concerned. CPAs know the point you’re making. It does not really matter what the “court of public opinion” might think. One rarely wins a case through the press.

      • Guest

        maybe these companies should look at themselves and their hiring practices…obviously their management didnt pick up on it either

    • Gust

      There is plenty to legitimately criticize in our profession but McKenna is a jackass (or more properly a jenny I suppose).  She’ll tell you we’re bought and sold in the market every day, deep in the client’s pocket, and there are three kinds of fools – fools, damn fools and you and me the auditors when we miss collusive fraud once every few hundred companies we audit.  I’m all for constructive criticism but there is just too much hyperbole and too big an ax being ground for my taste..

    • Guest

      It seems that Colonial Bank of Montgomery was a publicly traded company then it got delisted. Here is the SEC complaint regarding the fraud: http://www.sec.gov/litigation/complaints/2011/comp-pr2011-49.pdf

      So how it works in these cases the firm/lawyers will see if its cheaper to settle or fight it.

    • Master of the Universe

      Well what do we have here?  Look to me like a hate parade composed of all the bitter losers who couldn’t get into PwC.  You can throw rocks at the throne all day but you’ll never be us.  We are the Big One. 

      That being said, we’re decent men.  We’ll let you eat our table scraps.  Hell, we’ll even let you joke around some behind our backs.  One word of advice though: at the end of the day don’t forget that we are superior to you and if you cross us we will make you pay.

      • Guest

        LOL I worked at the real firm PW and watched it go to shit once a bunch of cooper pooper fradusters came in.  PWC is a souless machine and I love deleting every recruiting call I get from their “Direct Admit” (to hell) recruiter.  But keep on drinking that urine-laced Kool-Aid 🙂

      • Lloyd Blankfein

        are you 10?