We were too busy yesterday making AS5 jokes about KPMG to talk about McGladrey's 2013 PCAOB inspection report, which was released at the same time. McGladrey is used to warming the bench over Big 4 firms so we figured they could wait for us to get around to it.
The news is pretty good, at least when compared to Big 4 firms. Of course we're talking apples to oranges because the PCAOB inspected just 13 McGladrey audits. Cue the Big 4 apologists who whine about how Big 4 clients are so much more complicated than mid-tier clients, therefore the potential for failure is higher. A reasonable person might argue that Big 4 audits should actually have lower failure rates due to the fact that they are more complicated since the Big 4 should be more qualified to do good work. If anyone knows a reasonable person that might argue such a thing, have them call us.
Anyhoo, McGladrey. Of the 13 audits inspected by the PCAOB, 4 of them were not up to PCAOB standard. One in particular racked up dings in every noted standard except Auditing Standard No. 5. Go McGladrey!
McGladrey is on a roll here, going from a failure rate of 50% in 2011 to 43.75% in 2012. For 2013, let's call it 31%. It's really 30.76923076923077% but who wants to get that particular?
You'll notice no one bothered to personally sign McGladrey's response to the PCAOB, unless "McGladrey LLP" is actually someone's name which I highly doubt.
How's the ole scoreboard looking now?
- Deloitte: 28%
- McGladrey 31%
- PwC: 33.3%
- KPMG 46%
- EY: 50%
No doubt at least a couple McGladrey offices will adopt "suck it, PwC" as their unofficial slogan if they haven't already.