Auditors

Ernst & Young Lost a Lot of Audit Clients Last Quarter

I suppose "a lot" is a relative term, but I think most people would agree that to lose, on average, more than one client per week constitutes "a lot."

Unilever CFO Tries to Let PwC Go Gently

Jean-Marc Huet, the company's chief financial officer, said: "Our business is very large in scale and reach, with operations in over a hundred countries. "The challenge that this poses for our auditors has been successfully met by PricewaterhouseCoopers over many years and we have always been impressed with the rigour and quality of their audit. "However, given […]

PwC’s Head of Assurance Is Gonna Try Something New

Tim Ryan, who has led PwC's Assurance practice for the last four years is taking on a new role in firm as US Markets, Strategy, and Stakeholders Leader and Vin Colman, the East Region Vice Chair will take his place.    We obtained a copy of the email Mr. Ryan sent to PwC Assurance staff […]

China Ready to Turn Over Audit Workpapers for Some Company at Some Point

The U.S. Securities and Exchange Commission has been struggling to obtain papers from China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China has resisted for years turning over documents because of state-secrets and sovereignty concerns. The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers […]

Yes, the House Bill That Bans Auditor Rotation Is Terrible But There May Be an Upside

As you know, yesterday the House of Representatives passed H.R. 1564, the Audit Integrity and Job Protection Act, with bipartisan support, 321-62. The charge was led by the bill's co-sponsors, Rep. Robert Hurt (R-VA) and Rep. Gregory Meeks (D-NY). Here's an enthusiastic statement from Rep. Hurt via Accounting Today:

What’s in a (Big 4 Partner’s) Name? Maybe a Lot

On Friday, Francine McKenna provided a perfect example of what investors could learn about the audit partners for public companies should the PCAOB start requiring the naming of names.  Francine, through her sources, was able to confirm that Linda McGowan was the partner for MF Global — something widely known amongst regulators, and lawyers involved […]

Ernst & Young Latest Big 4 Firm to Have Part II of PCAOB Inspection Report Released

Okay, remind me — there's a saying about "three" and "trend" or "pattern" or something? Forget it, not important. What is important — at least we've made the argument that it is — is that the PCAOB released Part II of Ernst & Young's 2009 inspection report. That makes three out of four Big 4 […]

The SEC Manages to Get Softer on Big 4 Audit Firms

Incredibly, the SEC has done something I didn't think was possible. It has, in its implicit blessing of Herbalife's selection of PwC as auditor, given the Big 4 and other audit firms more leverage in future debates over independence with regard to past non-audit services. And the last thing the Big 4 needs is more […]

(UPDATE) In Becoming Herbalife’s Auditor, PwC Does a Dicey Independence Dance

~ See update below It seems fitting that PwC would replace KPMG as Herbalife's auditor, doesn't it?  On May 21, 2013, the Audit Committee of the Company’s Board of Directors engaged PricewaterhouseCoopers LLP (“PwC”) to serve as its new independent registered public accounting firm to audit the Company’s financial statements for its fiscal year ending […]

City of Los Angeles Blames Technology, Retired Auditors for Missing $43 Million

Officials in cash-strapped Los Angeles have uncovered almost $43 million that was just sitting in a Department of Transportation account unbeknownst to the city, prompting them to wonder if there's more magic money stashed away: The discovery of $42.6 million will be a welcome one-time infusion into next year's budget, officials said, but has left […]

Guest Post: The PCAOB Is Our Parents Now

Ed. note: The following was written exclusively for Going Concern by a Big 4 auditor who wished to remain anonymous. 

The PCAOB is turning into our parents. Or at least they are using the same tactics in handing out punishment. “We know you were up to no good last night, so if you just tell us what you did we’ll take that into consideration when deciding how long to ground you.”

Herbalife’s Surprise Be-Our-New-Audit-Firm Sweepstakes Will Have a Winner Soon

Herbalife Ltd. is making progress in its search for a new accounting firm, executives said during a conference call with analysts Tuesday. The Los Angeles nutritional products company was forced to hire a new accounting firm after KPMG resigned earlier this month because one of its senior partners was accused of insider trading in Herbalife stock. The […]

ICYMI: BDO Picks Up Skechers After…Ya Know

Bravo Delta Oscar has come to Skechers' rescue and will re-audit the two years worth of financial statements that KPMG abandoned after we learned that Scott London spent some of his billable hours counting cards. From henceforth, gaining a client due to a scandal of a notable degree shall be known as "picking up a London." […]

Judge: Deloitte Can Handle Two Chinese-related Court Cases Just Fine

Deloitte Touche Tohmatsu CPA Ltd. lost a bid to delay a lawsuit brought by the U.S. Securities and Exchange Commission seeking documents in an investigation of the auditor’s former client Longtop Financial Technologies Ltd. U.S. District Judge Gladys Kessler in Washington today rejected Shanghai-based Deloitte’s argument that the case should be put on hold while an […]

Public Company CFO Says Naming Audit Partner Is NBD

Andy Bishop is the chief financial officer of Hallador Energy, a publicly traded coal company. Like many CFOs, he did a little bit of time at a large accounting firm, so he knows a thing or two about auditing and pays attention to the haps in that space. So when he heard that the PCAOB […]

KPMG’s Official Statement Meets Mystery (Bachelor of) Science (in Accounting) Theater

When a giant insider trading turd hits the fan of independence, KPMG spokesman Timothy Connolly is there with a Clorox wipe to sanitize the minds of the American public. Here's what he said. Be careful, it'll probably sting your amygdala. Late last week, we were informed that the partner in charge of KPMG’s audit practice in […]

Despite Entering a ‘War Zone’, the Next Auditor of Herbalife Should Find Solace in All the Fees They’ll Earn

Part of the reason this KPMG resignation is such a conundrum for both Herbalife and Skechers is that the firm withdrew its audits back to 2010. The clean-up crew for each company will have its work cut out, and according to Georgetown professor James Angel, Herbalife's new auditor, especially, will "be walking into a war […]

Lessons From L’affaire Scott London: Don’t Talk About Your Clients While Quoting Caddyshack

I love Peter Henning's suggestion that ex-KPMG partner Scott London was swapping Caddyshack quotes with his golfing buddy. Everyone having few drinks after playing a round inevitably sees someone walk by with a hideous headpiece and says, "When you buy a hat like this I bet you get a free bowl of soup." I think it's a law in Florida that you have to recite that line. 

(UPDATE) KPMG to Resign as Herbalife’s Auditor; Who’s Next? A: Skechers

~ Several updates below including the name of the partner fired by KPMG and statements from Herbalife and Skechers. That was fast. The New York Times reports that the KPMG will be resigning as the auditor of Herbalife:   Herbalife is poised to disclose on Tuesday that KPMG will have to resign as the company’s […]

Table-Dancing Philly Audit Luigi Will Pretty Much Consume Your Entire Afternoon

Alright, so we're all sick of Harlem Shake videos amiright? We almost didn't even bother to click on this reader submission from "Philly audit" (where we just do not know) but we found the guy dressed as Luigi so transfixing we had no choice but to share. See for yourself:   No need to out […]

This ‘Fighting Fraud’ Video from the CAQ Isn’t Going to Help That Expectations Gap Problem Auditors Love to Complain About

Most people like to learn in some sort of visual fashion. Reading? BORING. Lectures? AWFUL. There needs to be action, bright colors, and a damsel in distress — bonus points if there's a scene of frontal nudity — to get people to pay attention for longer than five minutes.  Investors in public companies are no […]

Twilight Remake to Feature Auditors Instead of Vampires

I'm not sure I can keep this up — the words and stuff about accounting. Thankfully, this James Huang guy did another video. It's about that Twilight book I don't know anything about. I did happen to be at the Barnes & Noble a couple of times when the new ones were being released and […]

Southern National Bancorp Not Ashamed to Admit That They’re Dumping KPMG to Save a Hundred Grand

Southern National Bancorp is swapping out KPMG as its auditor for Dixon Goodman Hughes Goodman. Perhaps this development isn't surprising since the firm had, what some might call, a significant restatement last year. But if you were to ask the SNB's President Rod Porter, as one Washington Business Journal reporter did, this isn't about accounting […]

Chimera Seems to Have Enjoyed Firing Deloitte a Little More the Second Time Around

If you've read anything recent about Chimera Investment Corp., you're no doubt glad that you don't have any part in it. Tony Catanatch's post from last week has more than enough to most auditors want to grit their teeth into dust: Here is a company that has neither filed a quarterly report since November 18, 2011 […]

Here’s Why Releasing Part II of the PCAOB Inspection Reports Is Important

I know what a lot of you are thinking — "The PCOAB is a bunch of couldn't-hack-it-in-public know-nothings that like nothing more than making hard-working auditors' lives a living hell. And, oh, Part II doesn't mean jack squat." FANTASTIC! Then you won't mind that I'm going to spend the next few hundred words telling you […]

At Least PwC Doesn’t Have to Worry About Improving the Supervision of Its Auditors Anymore

Last week the PCAOB dropped Part II of PwC's 2008 and 2009 inspection reports. This was only the second time a Big 4 firm's Part II had been released since the audit profession was blessed with government regulation. It was like a fire rainbow or an unassisted triple play. Rare! Exciting-ish! We pored over the […]

There’s No Way Someone at Deloitte Leaked Those Carolina Panthers Financial Statements

Yesterday, Tommy Craggs at Deadspin scooped more sports franchise financial statements, this time those of the Carolina Panthers. As usual, it's great insight into how sports teams are shrewdly run businesses1. Just like any financial statement report, the good stuff is in the notes and Craggs dissects the more interesting points. If you're not up […]

PwC Has Rally Caps on After PCAOB’s Expanded Reports

Yesterday afternoon, right about the time I couldn't read another word about PwC's love of CAKE, this tip came through at approximately 7 pm ET: Tim Ryan just finished up an "emergency" call with all partners and managers about this. Call began at 5:30 EST.  Mr. Ryan, as we noted this morning, was quoted in Floyd […]

Warren Buffett Has No Use for Auditors

In one instance at least!  Here's a little anecdote courtesy of the ubiquitous Business Insider: [I]n 1984, Berkshire highlighted its purchase of Nebraska Furniture Mart [in its annual letter to investors]. Buffett was a huge fan of NFM's chairman, the 91-year-old Rose Blumkin, who he affectionately referred to as "Mrs. B." Here's an excerpt: I […]

PwC and Deloitte Probably Don’t Care That They Lost So Many Audit Clients

One possible alternative title for Accounting Today's "scorecard for new SEC audit clients" would be "Jesus, PwC and Deloitte Lost a Lot of Audit Clients Last Year." I'll go out on a limb and say that it probably didn't even make the short list. AT went with "E&Y, KPMG Top 2012 for Audit Client Wins" which is […]

ICYMI: Slayer’s Drummer Asked for Some Accountability, Got Fired for His Trouble

There isn't a lot of thrash metal in my musical library. In fact, I don't think there's any. I didn't really have Slayer/Anthrax/Megadeth phase. Maybe it's the shouting. Maybe it's the hair. Regardless, I missed this story about Slayer's founding drummer Dave Lambardo getting fired for demanding some business prudence: The band's drummer and co-founding member Dave […]

Oh Look, Deloitte Has More Trouble Thanks to a Chinese Audit Client

Just when you thought Deloitte's China rash had gone into remission, some investors come along who don't think too highly of the audit performed by D to the T. In this particular case, the investors are a group of investment funds including Columbia Pacific Opportunity Fund LP and Fir Tree Value Master Fund LP who, according […]

Anyone Concerned That PwC’s Legal Troubles Lacked International Flair Can Rest Easy

Scandal-hit subprime lender Cattles is suing PwC, alleging negligence over its audit of two years of financial statements. PwC intends to contest what it called the “inflated and misguided claim” in the High Court in London. […] A supervisor representing Cattles’ creditors asserted that PwC should not have signed off the 2006 and 2007 financial statements of […]

Here’s an Unconfirmed Account of a KPMG Auditor That Walked Off the Job and Never Looked Back

From the mailbag: There was an Audit Staff 2 in the Silicon Valley KPMG office that walked out of his audit room during busy season and just did not return. Everyone is talking about it, even here at another big 4. He is our hero. We all want to celebrate him. We don't have any further details at […]

ICYMI: PwC and BDO Both Passed Their AICPA Peer Reviews Just Fine

Remember how Deloitte's AICPA Peer Review finding of "pass with deficiency" was one of the lowliest of low points for the year in auditing? Sure you do. At the time, we learned from the AICPA's James Brackens that from 2008 to 2010, only 8% of the audit firms that participated in the peer review had […]

Accountants: Tell Us Your Busy Season Problems

As many professionals embark on the tumultuous journey that are the busy season months of January, February, March, and April, it is inevitable that known and unknown problems will arise. Some of these are client-initiated and others are co-worker-initiated. Some of them are simple problems; some of them are complex problems. Some involve food odor; some […]

Developing: Ernst & Young Auditor’s Life Is About to Become a Living Hell

Much like the flu, it's far too early to say how bad this busy season will be. But this particular case doesn't sound good:  We have about 10 days between when the client closes their financials and the earnings release…going to be an intense 10 days… — Life at EY (@EYstaff) January 15, 2013 We'll […]

FYI: Attorneys Think Auditors’ Legal Confirmation Letters Are a Giant Waste of Time

Mark Herrmann, the in-house legal columnist at Above the Law, has a bone to pick today and it's one the opiners out there are intimately familiar with: When I worked at a law firm, I knew that lawyers’ responses to audit letters — in which the firm confirms to auditors the status of litigation pending […]

SEC Charges Two KPMG Auditors with Something We’re All Accustomed to Auditors Doing

Way back in April 2010, KPMG resigned as the auditor of TierOne Bank. You see, TierOne was in a bit of a mess with its regulator, the Office of Thrift Supervision; the House of Klynveld risk gurus finally had enough, pulled everyone out of there, withdrew their 2008 audit, and told everyone they wouldn't touch […]

The SEC Investigation into Ernst & Young’s Lobbying Activities Isn’t Going to Amount to Much

Late yesterday, Sarah Lynch and Dena Aubin at Reuters reported that the SEC was poking around Ernst & Young's lobbying activities on behalf of audit clients. Apparently the investigation has been going on since Reuters first broke the story back in March that the specialized advisory group of Washington Council Ernst & Young was trotting around […]

Auditors Not Being Credited with “Better Letter Than Never” in Discovery of Pennsylvania School District’s $15 Million Error

In yesterday's Footnotes, we mentioned that the Reading, Pennsylvania School District sorta overstated the amount of a subsidy that it received from the Keystone State. An unfortunate error that will likely result in cutbacks for another struggling school district.  Because the children are being wronged here, there is plenty of outrage and blamestorming going around. […]

BDO Keeps Pace with Rival Audit Firms in Terrible PCAOB Inspection Reports

For whatever reason, BDO was excluded in the last-minute lump of coal the PCAOB delivered to Deloitte, Ernst & Young, and Grant Thornton right before Christmas, but that doesn't mean their inspection report wasn't in the same class of quality.  The Board inspected audits at 16 of BDO's 35 offices, inspecting 23 audits with 9 […]

Deloitte Rewards Auditors for Job Well Done with Professional Skepticism Homework

On December 21st, long after most people had given up on the world coming to an end and just about the time everyone on the east coast was about to check out for the rest of 2012, the PCAOB conveniently released the 2011 inspection reports for Deloitte, Grant Thornton, and Ernst & Young. The timing […]

KPMG Chairman: Auditor Rotation Is a ‘Terrible Idea’

It's more or less understood by everyone, with a few exceptions, that pursuing mandatory auditor rotation is a giant waste of time. There has been much discussion of the issue — from the hallowed walls of a PCAOB open meeting to the slums of the Going Concern comment section — and while there has been […]

RSM Tenon Shareholders Actually Acted on Their Dissatisfaction with PwC’s Auditing Ability

You may not know this, but McGladrey's British sister from another mister is RSM Tenon. Like most large accounting firms RSM Tenon provides a wide variety of exemplary professional services demanded by the capital markets. Unlike most large accounting firms, however, it has shareholders and is listed on a stock exchange.  Those shareholders get to vote […]

PCAOB Member Jay Hanson Can’t Imagine a World with Auditor Rotation

On Monday, PCAOB Chairman James Doty gave a speech where he mentioned, among other things, that "auditor term limits" was something the Board would consider in order to "protect the auditor's independence."  Undoubtedly, this was disheartening news to auditors who count themselves as the Big 4 variety because they've gone on record to voice opposition and […]

SEC, China Will Probably Compromise Over Big 4 Chinese Affiliates Someday, Says Guy

The SEC's move against the Big 4's Chinese affiliates on Monday has people all worked up. On the one hand, yes, if the SEC were to delist a lot of Chinese companies that would make a lot of people sad. Also, if fewer Chinese companies were to consider accessing U.S. markets because they aren't so […]

Auditors Will Be Happy to Know That Term Limits Are Still on the Table

In a keynote speech at the AICPA's National Conference on SEC and PCAOB developments, Chairman Jim Doty passed on the opportunity to mention extremely recent developments and instead focused on things like the importance of independent auditing to "our economic success" and audit firm culture and the PCAOB's current initiatives. In fact, Mr. Doty doesn't mention […]

SEC Finally Gets Around to Losing Patience with the Big 4’s Chinese Firms

China has been a thorny issue with the SEC and the PCAOB over the last couple of years. You see, there's been some concern that some Chinese companies have accessed U.S. markets through dubious means and then provided financial reporting and disclosures that weren't accurate in material respects. Audit firms charged with providing an opinion […]

(UPDATE) Canadian Officials Not Impressed with Ernst & Young’s Audits of Sino-Forest

Up until this point, Ernst & Young has seemed perfectly content to see how this Sino-Forest situation (some have called it a "Ponzi scheme") would play out, standing quietly by their audit opinions without so much as a peep*. Canadian regulators, possibly impatient with the radio silence, have decided that they'll open things up, as the Ontario Securities […]

Hiring Watch ’13: PCAOB

Yesterday, the PCAOB held an open meeting discussing its plans for being the most dominating force in public accounting regulation over the next few years. Within these plans is a strategory to not just be the type of regulator that points out the things that you royally fucked up, but also to be a resource […]

Report: That Sloppy McGladrey Audit Was Definitely Maybe Probably Unity Bank

HEY, everyone remember that really sloppy audit that 3 (then) McGladrey & Pullen auditors got smacked on the wrist and/or face for when the PCAOB found out they threw in a bunch of necessary documentation after the fact? Jonathan Weil over at Bloomberg seems to have unpuzzled the whole thing and is saying the mystery […]

Big 4 Firm Doesn’t Appreciate the Insinuation That Former Big 4 Employees Are Anything Less Than 100% Objective When Choosing an Audit Firm

It has become increasingly clear that the front line of the war on audit firm oligarchs is in the U.K. While regulators and observers in the U.S. seem ambivalent about the Final Four Horsemen of the Financial Apocalypse, the British have seemed quite content to irritate the Big 4 with their Competition Commission's insistence that […]

Let’s Discuss: Auditors and The Responsibility to Detect Fraud

When I finally got around to writing about the HP/Autonomy finger pointing party yesterday, the topic of fraud detection by auditors came up as it often does in these scenarios. More specifically, the statement that "audits are NOT designed to detect fraud."   A friend of Going Concern emailed me later in the day with […]

This HP/Autonomy “Accounting Improprieties” Thing Hit the Big 4 Superfecta and Other Things We Learned Today

As luck would have it, we don't get to coast this Thanksgiving week as HP had to come along and screw it all up by announcing a $8.8 billion write-down, $5 billion of which is described as "serious accounting improprieties, misrepresentation and disclosure failures" at software company Autonomy, who HP acquired back in 2011. And where […]

Auditor Musical Chairs: 99¢ Only Stores Splurges on Ernst & Young, Dumps BDO

With a business name like "99¢ Only Stores," no one would blame you if you assumed the company and would try to pinch some pennies on their auditor. It's a commodity service that is just asking to be squeezed, after all. However, sometimes as a public company, you'd like a big name brand on your […]

Batman Auditor Gives Scooby Doo a Run For His Scooby Snacks

I'm starting to think we need a Going Concern Halloween costume contest next year. There's always the old "reverse merger" idea or, failing that if you don't want to scare away the client with innuendo, you could always go as the douchey vending machine. Anyway, as we know Halloween has come and gone but that […]

The Basics: Interview Preparedness For Socially Awkward, Loner Refugees

One might think after 3 years of answering what appears to be the same handful of questions over and over and over and over and over and over and over we'd totally be sick of it but I assure you we're not. There are no stupid questions only stupid people so if you've got half […]

Q: Scooby-Dooby-Doo Where Are You? A: In an Audit Room (Allegedly)

Halloween is one of those holidays that auditors don't often get to celebrate at work. The general consensus being that you can't provide exemplary client service while dressed as Captain Jack Sparrow, a contestant on The Price is Right, or Sexy Heinz Ketchup. This is even more unfair due to the fact that the entire tax […]

Being an Independent Auditor Is So Much Easier (and Effective) If You Are a Total Prick

I love HGTV in fact but not in appearance. No one looks at me and thinks, "I bet that guy TiVos Yard Crashers, Curb Appeal, and House Hunters," but I do. And although I think Hilari was robbed in Design Star All Stars, I never really talk about it with anybody. Fortunately, there is no […]

PCAOB Discovers That Some Firms Consider Audit Quality to Be a Nice Idea That Doesn’t Work in Real Life

PCAOB Board Member Jeanette Franzel, CPA, CIA, CMA, CGFM, gave a speech at University of Tennessee Corporate Governance Center today that discusses "Current Trends and Issues in Public Company Auditing." That's nice and all but the first half of the transcript is more or less a history of auditing and the PCAOB. The second half finally gets […]

Dual Monitors Will Allow PwC Auditors to Finally Get Some Work Done

One of the most frustrating things that plagues many capital market servants is not having the necessary equipment to do one’s job. There’s nothing quite like your pull-start laptop that runs Excel 97 crashing in the middle of the day to railroad your progress.

And Now, Here Are Deloitte Chargeable Hour Goals (Assurance)

Following up on the Ernst & Young chargeability goals we published earlier this week, now we bring you Deloitte's goals for "2012" sent to us, second-hand, from a trusted source: Staff – minimum of 1,900 Manager – 1,700 Senior Manager – 1,600   However, after farming the comments on the E&Y post, here are some […]

Here Are Ernst & Young Chargeable Hour Goals for Fiscal Year 2012

Courtesy of a friend of Going Concern, we bring you the bar that Black and Yellow auditors are trying to jump over for the remainder of the fiscal year*. Yes, I'm sure this isn't news to anyone inside Chez Turley, but we felt that it's important that all non-EY auditors know how hard they are […]

China Agrees to “Look But Don’t Touch” PCAOB Visits

Board member Lewis Ferguson tells of China's teasing ways in a speech that he's giving at the California State University SEC Financial Reporting Conference in Irvine: As a first step toward further cooperation [with China], we are working toward and have tentatively agreed on observational visits where PCAOB inspectors would observe the Chinese authorities conducting […]

Big 4 PCAOB Inspection Reports to Be SALY

If a person was going to describe the 2010 PCAOB inspection results, you might hear things like, "didn't meet expectations" or "downright embarrassing" or "an abomination" or they may just make Hans Hoogervorst's favorite hand gesture. Simply, they weren't so good. The good news is there's no place to go but up. The bad news is […]

Going Concern Warnings Are Worthless

Just a few years ago, a number of companies failed, were rescued by competitors (if you can call it a rescue) while on the brink, or bailed out by the federal government. It was a pretty exciting time! One of the downsides of all this drama was that you, me, EVERYBODY lost a lot of […]

Grant Thornton Audit Partner Can Barely Keep From Laughing at PwC’s Claim That UK Audit Market Is ‘Fiercely Competitive’

For some time now, second-tier audit firms in the UK have been bent out of shape about the domination of the Big 4. And seeing how one of the Final Four Horsemen of the accounting apocalypse is auditing 99 out of 100 FTSE companies (and 240 of the FTSE 250), they may have a legitimate beef. On […]

KPMG’s PCAOB Inspection Report Shows Firm’s Audit Quality Was Consistently Meh with Last Year

Late yesterday the PCAOB released the first Big 4 firm inspection report with none other than KPMG (in full on page 2). Compliance Week reported that the House of Klynveld more or less stayed consistent with last year's findings, which basically amounts to everyone shrugging with indifference:  In its first published report from the 2011 […]

Mandatory Audit Firm Rotation: Regulatory Sit ‘n’ Spin

It's been about a year since the PCAOB crapped out Release No. 2011-006, "Concept Release on Auditor Independence and Audit Firm Rotation." Some people in the profession think the PCAOB has no real intention of mandating audit firm rotation; rather, these professional skeptics believe the PCAOB just brought it up to appear relevant. The PCAOB […]

PCAOB’s Latest Report Finds That Auditors of Broker-Dealers Suck, Too

PCAOB Auditor Wrecking Ball Tour 2012 rolls on with the an interim report on the auditors of broker-dealers. And this time there's 100% deficiency!  From the Executive Summary of the Report on the Progress of the Interim Inspection Program Related to Audits of Brokers and Dealers:  This report presents observations from inspections of portions of […]

Here Are Two Accounting-themed Videos Parodying “Call Me Maybe” That You Didn’t Ask For

We've received a number of emails in the past 24 hours pointing to a recruiting video out of PwC Singapore that parodies an awful (yet, awfully catchy) song. I'm only sharing it with you because it deserves public worldwide scorn so this travesty will not be repeated by any misguided recruiting teams here in the […]

Just in Case There Are Audit Committee Members Out There Slacking on the Job, The PCAOB Has Released a Guide to Its Inspections That Should Catch You Up on Things

Are you a member of an audit committee that's been phoning it in? Or are you a newbie that's feeling upstaged by your fellow audit committee buds that are the so-called financial experts? Maybe you're skeptical of the words coming out of your audit firm's piehole(s) but you're not sure how to respond? Fear not! […]

Crowe Horwath May Have the Worst PCAOB Inspection Report Yet

PCAOB Terror Tour 2012 continues with the release of the inspection for Oakbrook Terrace's own Crowe Horwath. Up until this point, we thought that no one was going to make a run at the deplorable performances of Deloitte and McGladrey but ol' Crowe (as opposed to Old Crow) has managed to do it. PCAOB examiners found […]

This is a Makeshift Card for Sarbanes-Oxley’s Anniversary That You Should All Sign

As we mentioned, today is the 10th anniversary of Sarbanes-Oxley. Or was it yesterday? I guess it depends on who you ask. Technically, it was enacted on July 29th and President Bush signed it into law on July 30th. Personally, I prefer it to be the 29th because since I've started writing for this here […]

Deloitte Informs Indiana Officials That When You Let $526 Million Go Missing That, Yeah, It Can Take Awhile to Find It

Maybe you're not aware of this, but the state of Indiana lost track of $320 million in corporate taxes. Yep! They know that "state workers did not properly enter changes in the state's tax collection system" but why it took them four years to discover the problem is anybody's guess. Oh, and they also owe […]

CFTC Chairman Knows PFGBest Auditors Shouldn’t Have Passed GAAS

Gary Gensler, who may or may not be aware that PFGBest's auditor preferred to don jorts at the (home) office, is familiar enough with auditing standards to know there are certain ones that always need to happen: Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers on Wednesday that Peregrine Financial Group's outside auditors should […]

Scoring Sarbanes-Oxley

As we pointed out in this morning's roundup, the New York Times' Room for Debate is discussing the success/failure of Sarbanes-Oxley. Sunday marks SarbOx's 10th birthday so naturally people in the accounting and compliance world are getting all nostalgic about it and yeah, okay, nostalgia can be fun sometimes. The Times had four contributors in […]

Ex-NMFA Controller Admits That He Was ‘Probably Negligent’ to Submit a Fake Audit Report But It’s Okay Because a Real Audit Will Confirm That Everything Is A-okay

The New Mexico Finance Authority ("NMFA") has a bit of a mess on its hands. You see, a week or so back, the State Auditor discovered that the audit report – that was submitted six months late – was fake. Bogus. A sham. The NMFA management and board investigated and determined that the authority’s former […]

Compensation and Bonus Watch ’12: Deloitte Audit

As you recall, last week we went over the Deloitte AERS Advisory group's compensation numbers. Today, we have more comp data to share, this time for the opiners. Unfortunately, we don't have the financial results slide but most of all the other details will be included in this post. Let's get right to it, shall […]

Deloitte Achieves Another Unflattering Milestone in Audit Quality

As you well know, the quality of work performed by Big 4 auditors has been called into question aloud on a regular basis since the fall of 2008. Oh sure, you might say that ever since there was a Final 4 (circa 2002) there have been haters, but since we all came to the brink […]

Big Shot NYC Ernst & Young Auditor Visits St. Louis Engagement Team, Makes It Rain Sandwiches

Apparently, lunch is a luxury in some of Ernst & Young's smaller offices. One of my seniors from our NYC office is working in St. Louis this week so we got lunch yesterday — Life at EY (@EYstaff) July 13, 2012 With these kinds of working conditions, maybe unions are a good idea for Big […]

The First Sign of Trouble at PFGBest Might Have Been The Fact That Their Auditor Worked Out of a Living Room

When shopping around for an auditor, a strong, completely legit company might look for such things as prestige or number of years serving capital markets without going all Arthur Andersen on 'em but for belly-up brokerage firm PFGBest, it looks like some chick's house in the Chicago 'burbs was the perfect sort of office space […]

Deloitte Recycles Greg Weaver as Chairman and CEO of Its Audit Subsidiary

Deloitte is appointing a new Chairman and CEO of its audit subsidiary, Deloitte & Touche, and the new man in charge is actually an old man in charge – Greg Weaver. He led D&T from 2001 to 2005 and with this triumphant return to big chair, this basically making him the Grover Cleveland of the […]

Deloitte Auditor Recognizes Overachieving Intern’s Nauseating Enthusiasm, Responds Accordingly

There's nothing quite like an enthusiastic intern who wants to be prepared for their first day on the job. And when I say, "nothing quite like," I mean, "Nothing quite as barf-worthy." Make no mistake, the effort is appreciated young grasshoppers, but you should know that the senior associate or manager that you are corresponding […]

Yes Auditors, It Is Possible to Explain Your Job Without Scaring People Away

Once again we dig into the ol' mailbag to answer a question that has plagued one of your fellow capital market servant colleagues. If you have questions on anything from appropriate footwear to choosing the right tickmark from the supply room to handling awkward sexual advances by a coworker, email us. Dear GC:   In […]

Survey Surprises Surveyors After Finding Support for Auditor Rotation

In a recent survey of public companies assessing views on Sarbanes-Oxley a decade after its adoption, Protiviti also asked companies what they think of the PCAOB's recent suggestions that mandatory rotation might improve auditing. Nearly half of all survey respondents agreed that rotation would have a positive impact. Among large accelerated filers, Protiviti said 47 […]

How To Tell If the Hot Auditor Is Trying To Tell You She Wants You

I don't read Cosmo because, well, I already know 50 Ways to Drive My Man Wild (49 of them involve Bravo Juliets and one involves things I'd rather not admit I do, amiright ladies?) but while combing the Internet for elusive hot accountants to add to our Accounting Hotties board on Pinterest, I came across […]

The Number of Financial Statement Audit Deficiencies Is Blowing Up

So says an analysis of PCAOB inspection report data: The Survey of Fair Value Audit Deficiencies was released Wednesday by Acuitas, Inc., an Atlanta CPA firm that practices litigation and business valuation services. The analysis found that fair value measurement and impairment deficiencies accounted for 52 percent of all the audit deficiencies cited in the […]

Layoffs Watch ’12: Forced Ranking May Be Hitting KPMG Auditors

Following the news that the IT Advisory group could possibly force some professionals into the underperforming category, I had the following text message exchange yesterday with a source at KPMG that I'll refer to here as Rudy.  Rudy: Did you hear about the layoffs? Me: Nooooo. I just posted about the possible layoffs in ITA […]

Restless Accountant Considers a Second Chance with a Big 4 Firm

Have a question on anything from career limiting moves to plausible excuses for blowing off a random Tuesday to identifying that odor in the audit room? Email the Going Concern Brain Trust with your queries. And remember, there's no such thing as a dumb question; just dumb people who ask questions.  So here's the deal. I […]

Bonus Watch ’12: Grant Thornton Auditors Who Manage to Ignore Their Wicked Impulses

Question for the auditors in the crowd – have you ever come across a nefarious situation in your career and thought, "You know, if doing the right thing were to pay better than doing the wrong thing, I'd walk away from this client in a second."?   Of course you have. That's pretty much the […]

Grant Thornton Is the Latest Firm to Join the Chinese Auditor Resignation Jamboree

SGOCO Group, Ltd. issued a press release this morning to let everyone know that Grant Thornton's Chinese affiliate decided to take a walk on May 14th. They disclosed this with the SEC around 10 am on Friday, but with the Facebook circus going on, no one noticed. What's interesting is that the company filed Form […]

Andrew Fastow Has Some Food for Thought

The ex-CFO of Enron, oh humbly, asks: "If the internal and external auditors and lawyers sign off on it, does that make it okay?" History has shown us that, "that all depends." However, maybe things have changed?  [via HBR]

Auditing in China Sounds Like Pure Hell

Muddy Waters Director of Research, Carson Block wrote an op-ed for the Wall Street Journal today and he sheds some light on problems that Big 4 auditors are facing in China. And from the sounds of it, if you're used to the auditing standards in the west, then you have your work cut out for […]

Is the Next Wave of Auditor Resignations Coming?

Floyd Norris notes: Several Chinese companies that are registered in the United States missed the May 1 deadline for filing their annual reports and received two-week extensions. There are many reasons that a company’s report can be delayed, but given the recent history there is speculation that one or more companies might be fighting with […]

The PCAOB Inspection Report of Grant Thornton Could Have Been Worse

The Board inspected 41 audits at 21 of Grant Thornton's 51 offices. Fifteen issuers were cited in the report that included various failures, primarily related to "obtain[ing] sufficient appropriate audit evidence to support its opinions on the financial statements and on the effectiveness of [internal controls over financial reporting]." There was everything from failure to […]

The Dixon, Illinois Fraud Is the Latest Example of Why Reasonable Assurance Is Bullshit

As you know, the former CFO of DIxon, Illinois, Rita Crundwell, has been accused of misappropriating $30,236,503 and 51¢ from Ronald Reagan's boyhood home. It's a haul of Sue Sachdeva proportions, although it appears that obsessive shopping wasn't so much the motive as it was a My Little Pony fascination for a grown woman. ANYWAY, […]

PwC Partner Who Blamed Staff for Audit Failure Asks That You Not Misinterpret His Tiny Notes As an Attempt To Bury His Error

If you've been following the Centro shareholder lawsuit against PwC, you know that the partner in charge of the engagement, Stephen Cougle, wasn't exactly jumping at the chance to take responsibility for any of the audit team's shortcomings. If you were to ask Mr. Coulge – and Centro lawyers did – he'd say the person responsible […]