Accounting News Roundup: PwC and Steven Cohen; Auditor Inspections | 08.31.17

How’s PwC doing?

Meh, probably about the same. Although since August is traditionally a slow month, you’d think a behemoth accounting firm could manage to stay out of the news. But I think it’s fair to say that this is no ordinary August, and 2017 has not been an ordinary year for PwC.

The latest hit comes from a MarketWatch story by Francine McKenna that reports mega hedge fund guy Steven Cohen used a PwC Cayman affiliate to get rid of some illiquid assets as part of his settlement with the Securities and Exchange Commission over insider trading charges by his former firm, SAC Capital. You see where this is going, but here it is anyway: PwC U.S. audited the funds that held those illiquid assets.

According to PwC spokeswoman Caroline Nolan, “PwC network member firms have not audited any SAC Capital Fund financial statements or Point72 financial statements for periods ending after December 31, 2015.”

However, PwC was still the auditor of record, per the last full Form ADV filed by SAC Capital Advisors, L.P. on Aug. 26, 2016, of the private funds that held the remaining side pocket investments now being liquidated by PwC’s Cayman Islands consulting arm. It was also auditor of record per SEC filings of the main fund, Stamford Harbor Investments LP, under Cohen’s new investment adviser.

This seems to be more of a problem for Cohen, who’s scheduled to start a new fund in January 2018, than for PwC. Still, this seems like a pretty sloppy move on both their parts. “Why risk it?” a guy said. Shrug emojis all around.

Auditor inspections

Earlier this year, we all learned that getting advance notice of the PCAOB’s inspection plans for your firm is a significant career limiting move. If you’d rather play things by the book, then you can read the PCAOB’s Staff Inspection Brief that they issued yesterday. It explains what the Board’s inspectors will look for in 2017. So yes, it’s essentially a cheat sheet that audit firms can use that won’t be considered cheating. If you work at KPMG, be sure to pass it along to the new audit honchos; I wouldn’t blame them for being a little gunshy.

How’s tax reform coming along?

I recommend Thornton McEnery’s summary at Dealbreaker:

 

 

We’ll see you back here for future updates.

Previously, on Going Concern…

I wrote about the AICPA Trends report, their biennial account on the supply of accounting grads and the hiring demand from CPA firms. In Open Items, someone’s asking about security clearance.

In other news:

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