[mooseonloose]

What going on with KPMG?

AUD - NINJA in Training
BEC - NINJA in Training
FAR - NINJA in Training
REG - NINJA in Training

BEC: April
AUD: April
REG: July
FAR: Sept

[IcecreamF]

some partners had heads up of PCAOB inspections, its not even a huge deal. It already died down in the Accounting news.

.

[CPAIN2K17]

They missed big time with FIFA and Wells Fargo, and now their head of audit(and multiple partners) had improper communications with the PCAOB regarding upcoming audit inspections. Not looking good…

Wiley CPAExcel + Ninja MCQ & Notes

 

AUD - 97 (1/24/17)

BEC - 84 (3/10/17)

FAR - 94 (5/31/17)

REG - 88 (8/16/17)

[mooseonloose]

I wonder how their clients feels about this news. This is actually a serious matter.

AUD - NINJA in Training
BEC - NINJA in Training
FAR - NINJA in Training
REG - NINJA in Training

BEC: April
AUD: April
REG: July
FAR: Sept

[Anonymous]

Hopefully what is happening is DRAINING THE SWAMP.

Widespread fraud and corruption in public accounting and business in general. From nonreported illegal acts, independence impairments, kickbacks, etc.

I've documented and spoke up about many ethical dilemmas to my superiors at many firms in the past which only led to me being reprimanded or let go for it.

Hopefully they clean house and get rid of all the partners and crooks looking to fill their own pockets and let it serve as a warning.

It could be a good thing in the long run, hopefully this will bring to light the disadvantage of the billable hour and utilization fraud as well. It's time to start holding these dickhead partners accountable!

[RE2PECT]

That's why I never understood how an audit can be totally objective. If you're being paid millions of dollars from a client, how can you risk losing their business by exposing their illegal acts? I know you're reputation is on the line, but when the money's on the table it's hard to walk away from it.

"Luck is what happens when preparation meets opportunity."

Roger & Ninja

FAR: 75
AUD: 73, 81
BEC: 71, 73, 82
REG: 68, 82

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[Anonymous]

^^Agreed! It's funny how much time is spent about the independence but the audit fees are millions of dollars (how is that independent?) and you as a client is their likelihood. If you have a former auditor on the other side, it is possible to be talked into a lot of things…. But that's why there are reviews and inspections-checks and balances…

[Jdn9201]

I was never interested in Audit but even if I had been, the pressure cooker high stakes environment would have pushed me away from even considering working in the field. It's not hard to connect the dots and figure out that High Pressure Environment + millions or billions of dollars in fees, partnership capital (acct firm), and stock value (client) = Fraud. I've always snickered at the concept of independence when there's so much on the line. As long as the current model is in place that dictates the relationship between the accounting firm & client, then its going to be hard for things to change.

Again, speaking from an outsider's perspective (I'm a tax person), what I think needs to happen is better oversight, particularly with the PCAOB. It seems to me that there is too much lag time between the financial data occurring, the audit and financial statement release, and when the you know what hits the fan. Using the housing crisis as an example – by 2007, the MBS and CDO business model so many firms were banking on should have been sending off red flags, yet we didn't find out about how bad it was until the market crashed and Congressional hearings took place in 2010. I wish there could be simultaneous audits by both the PCAOB and the accounting firm so that we would know sooner if something major was wrong, or was covered up. People's attention spans are so short nowadays that it's relatively easy for big accounting firms to distance themselves from something that happened multiple years ago.

BEC - 88 8/29/15
REG - 82 11/14/15
AUD - 83 1/8/16
FAR - 80 2/29/16

[Mike J]

Certainly the rotation rules are a joke. Familiarity breeds contempt, but so too does fraud. All one CPA firm need do is switch off supervisory partners?

At minimum the CPA FIRM should be completely rotated off every 3 years. At the very least a fresh set of eyes is not a bad thing.

And yes, as Re2pect and others have said is correct. There is zero incentive to find any fraud. If you're a big firm, you want to stay big. How do you do that? Mum's the word.

That's where the PCAOB should come in. Again, I cite KPMG and HSBC. Correct me if I'm wrong, but did anyone ask KPMG what came to your attention re fraud or illegal acts? Did you speak to HSBCs legal counsel (or even ask for their permission; not getting it is enough to walk away)? Did they tell you about the numerous cease-and-desist letters from the FBI? Clearly that's what I wanted to know when Eric Holder cited deficient internal controls. How trustworthy can the financials be? etc.

There is also no fear of punishment for ignoring blatant warning signs. A firm can just jettison a scapegoat. No jail time.

This situation, on a lesser scale, reminds me of cops who kill unarmed suspects with impunity. Granted, there is no direct correlation to life and death with what we're talking about. But too many people in each profession love to wave their arms; “How can this happen in our day and age?”; “Let's not let a few rotten apples spoil the bunch.” Yet, there is no investigation with actual teeth going on. Just like with innocent cops, silence speaks volumes. There has been very little pressure on PCAOB or SEC to enact strict AUDIT standards much beyond independence standards within SOX.

Auditors provide a public trust. I firmly believe that. And if we're to take that seriously​, we should demand more of auditors (this the police comparison)–IF KPMG is indeed an isolated case.

You'd think we would've learned from Arthur Andersen and ratings agencies (who basically provide the same service for potential investors) being on the take.

An excuse could be the size of the budget to regulate. However, no institution should be as big as the Big Banks and Accounting firms are. Especially since the justification for the latter group is that smallER firms lack the resources (eg money) to take on as clients the former group.

If the PCAOB can't adequately regulate the big Accounting firms–and they've shown they can't or won't–then we should look into breaking up the Bigs. 2008 demonstrated the folly of allowing this to continue.

AUD - 90
BEC - 79
FAR - 77
REG - 77

They don't trust JUST ANYBODY to count beans

[Author]

Replies