Accounting News Roundup: Unholy Vatican Accounting and Deloitte’s Bitcoin ATM | 09.08.16

Vatican accounting

Here's an article about Cardinal George Pell, "the pope's finance chief" who hired PwC to audit the Vatican late last year. And if you think your company's/client's books are a mess, you'll thank the Almighty that you don't have to deal with this:

Accounting at the Vatican has never followed unified policies. Annual reports aren’t released, different departments use different accounting principles, data are inconsistent and not comparable. Before Cardinal Pell’s appointment, a panel of cardinals charged with economic oversight met just twice a year. Budgets didn’t exist, and expenditures weren’t itemized. 

Another frightening story that will cause you to make the sign of the cross involves a review by McKinsey that turned up €1.4 billion off-balance sheet assets:

The cardinal attributed the discrepancies to haphazard accounting and ad hoc policies. “I’m not saying it was being mismanaged or anything. It just was there for a rainy day,” Cardinal Pell said.

What's a rainy day for one the biggest religions in the world? I mean, obviously the sex abuse scandals, but what else? The Rapture? Or in case the Medicis took over the papacy again? I wonder how PwC documented the discovery? "Per client, assets of €1.4 billion were kept off-balance sheet in case the Antichrist shows up."  

Cardinal Pell's efforts have run into some barriers lately. PwC's audit was suspended back in April and his "wide-ranging powers" have been reined in a bit. Still, CFO of the Vatican would be an interesting gig. No word about what they're doing with the Antichrist money, though.

SOX 404 disclosures

A new report from research firm Audit Analytics discovered a trend among non-accelerated filers that will worry the most fastidious of auditors:

[T]he percentage of adverse Management-Only assessments showed a seven year trend of increases, reaching a high of 40.48 percent for fiscal year 2014. The percentage for fiscal year 2015, of 36.07 percent, represents a decrease from FY 2014, which was higher than 2011 and the three years prior.

Thanks, Obama! Seriously, though, does it surprise anyone that a "management-assessment" results in such a high adverse rate? If you're an executive at a small public company and your internal controls aren't audited, how high is this assessment of controls on your list of priorities? I'd be surprised if it broke the top 25. In all these adverse assessment scenarios, I imagine an auditor approaching an executive, asking about the assessment and the executive responds, "Our internal controls are fine," while playing solitaire. That can't be far removed from reality.

Bitcoin

Meanwhile, in Toronto:

'Big Four' accounting firm Deloitte is now the owner and operator of its first bitcoin ATM.

After a quiet unveiling yesterday in the downtown Toronto offices of Deloitte's Rubix blockchain division, the bitcoin transaction machine, or BTM, is now ready to exchange digital currency for Canadia [sic] dollars.

Why was it a quiet unveiling? As to not overshadow the self-satisfied revenue results? If I was the owner of a bitcoin ATM machine, I'd email a press release to every libertarian media outlet, no matter how ludicrous their vision for a cash-free utopia might seem. Haters of fiat money would come from across the globe to use the machine. And because everyone hits "I agree" to the usage fee, I'd charge each user 1 bitcoin per transaction. Bwahahahahaha!

Has Donald Trump released his tax returns?

Nope! "Donald Trump's tax returns: Why won't he release them?" reads this CNN headline and I already miss the duck.

Previously, on Going Concern…

Greg Kyte addressed artificial intelligence in Exposure Drafts. I wrote about the Big 4 being big.

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