Accounting News Roundup: Big 4 Interns; Wells Fargo; Prison Sentences | 07.28.17

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Big 4 Interns

I guess it was National Intern Day yesterday? Okay, I admit it, I knew it was National Intern Day and was too busy to mention it. Forgive me, interns, for not recognizing you. But don’t worry, Big 4 firms are still laying it on thick. Here’s EY:

And here’s PwC, with cake, naturally:

And here’s Deloitte, boasting about DU, naturally:

And KPMG? Looks like they forgot. Now I don’t feel so bad. Best of luck, interns.

Wells Fargo

Oh, Wells Fargo, what have you gotten yourself into this time?

Wells Fargo & Co.’s disclosure that it may have pushed thousands of car buyers into loan defaults and repossessions by charging them for unwanted insurance is raising doubts about the lender’s ability to put proper controls in place.

“The steady drip of revelations is concerning as it makes quantifying and qualifying the extent of the internal control failures difficult,” Isaac Boltansky, an analyst at Compass Point Research & Trading, said Friday in an email. “Which is worrisome for both Washington and Wall Street.”

And maybe KPMG! I mean, sure, this is ultimately management’s responsibility, but when it comes out that a big bank has sloppy internal controls, auditors can count on some blame coming their way.

Accountants behaving badly

In my mind, the primary reason to not steal money from your employer or clients is an easy one: loss of freedom (aka jail). You’ll notice that the concept of right and wrong does not factor into the reasoning here because you have to assume that the moral compass of someone considering embezzlement is already dysfunctional.

I bring this up because sentencing guidelines can be severe! I’m no criminal psychologist, so I have a hard time understanding why a person would steal millions of dollars and risk spending many years in prison. Maybe the consequences never enter the thought process. In any case, Don R. Iley, a CPA in Parker, Colo. was sentenced to twelve years this week for wire fraud and preparing false tax returns:

Iley kept the money that was intended for payroll taxes and used it for his own purposes. Iley used some of the money to, among other things, make $900,000 in accelerated principal payments for Iley’s home, pay for the design, construction, landscaping and furnishing of Iley’s residence, and make investments in businesses and retirement accounts.

Also fascinating is that the crooked CPA was always a CPA — paying down your mortgage, landscaping, investments, retirement; who but a CPA would be so practical with stolen money but a corrupt CPA?

Previously, on Going Concern…

Megan Lewczyk wrote about beating smartphone addiction. In Open Items, someone needs advice on a PwC IT Advisory manager salary (and other stuff too).

In other news:

  • “To the closing arguments in the trial of his client, Martin Shkreli, the lawyer Benjamin Brafman brought a tale about a wild dog and a wagon, a metaphor about himself as a lifeguard, a Texas accent to mimic an investor, a poster that asked in all caps, ‘WHERE ARE THESE WITNESSES?’ and a bag of Ruffles as a prop.”
  • SEC Announces Whistleblower Award of More Than $1.7 Million
  • Deloitte to Open Little Rock Office
  • U.K. Audit Quality Still Lagging Expectations: Financial Reporting Council
  • Dancing with the Stars’ wants Sean Spicer

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