Accounting News Roundup: PCAOB Fines Deloitte; PwC’s New Tax Team; Dueling 8-Ks | 05.25.18

Plus, Lynne Doughtie’s favorite movies, Samsonite’s troubles, stolen crypto, and bad mussels.

PCAOB fines Deloitte $500,000 for faulty audits of Jack Henry [AT, PCAOB]
Jack Henry sounds like someone’s pipe-smoking, whiskey-sipping grandpa, but in this case, it’s a Missouri-based provider of information processing solutions for banks and credit unions, and Deloitte did a lousy job auditing them. Namely:

The PCAOB found that Deloitte was primarily responsible for the violations because none of the engagement personnel it assigned to the audits had sufficient software industry experience and knowledge (including of the relevant generally accepted accounting principles) to properly evaluate and audit the accounting for software license revenue.

This happened over three years of audits. The order notes that Deloitte did find “a number of audit and accounting issues” after it had been notified that the Jack Henry fiscal year 2014 audit would be inspected. Deloitte reported these issues to the PCAOB before its inspection began. So, hey, great job not altering workpapers, Deloitte. Few seem to have that kind of willpower.

PwC announces plan for hundreds of new Connecticut jobs [SA]
The firm is planning to add 400 jobs in Stamford, and if you enjoy public officials gushing over big business, then this article is for you. Anyway, Stamford will be the home of PwC’s “Insourced Solutions for Tax team.” That’s the group that was created out of the deal that saw PwC hire General Electric’s tax department last year.

A Most Unusual Way To Impress KPMG CEO Lynne Doughtie At Your Job Interview [Forbes]
Ugh, yet another interview I’ve read for you. This one isn’t as bad as the “raise-your-hand” nonsense if only because we learn that Lynne Doughtie’s favorite movies include Air Force One, Armageddon, The Help, and The Blind Side.

Samsonite tumbles after short seller questions accounting [Bloomberg]
Blue Orca Capital claims “Samsonite concealed slowing growth with debt-funded acquisitions and inflated profit margins with dubious accounting linked to its takeovers.” Blue Orca also alleges that there are some dodgy related party transactions between Samsonite CEO Ramesh Tainwala and companies controlled by him and his family, as well as  “a revolving door of auditors” in the company’s South Asia business.

Blood Cleaning Company’s Ousted CEO Denies Exit in Filing Faceoff [Bloomberg]
Dueling 8-Ks have caused Rockwell Medical Inc. to have, what Bloomberg’s Matt Levine describes as “different, let’s say, metaphysical statuses.” One 8-K says the CEO has been fired. Another 8-K says that’s not the case. Sounds confusing, right? That’s because it is:

At 9:27 p.m. on Tuesday RMTI-B’s 8-K, announcing that Chioini is still the CEO, arrived at Edgar; at 6:05 a.m. on Wednesday, RMTI-A’s 8-K, announcing that no he isn’t, arrived. Because late-evening Edgar filings don’t actually become public until the next day, the two filings ended up hitting the Bloomberg terminal news feed five minutes apart on Wednesday morning.

Previously, on Going Concern…

I  wrote a farewell post.

In Open Items, WHY CAN’T WE FIX REGULATION?

In other news:

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