Protip: If you’re an entitled, old, racist white guy, it’s not wise to go on a rant against black people in an airport when the whole world can whip out their smartphones and record you being a douchebag.

That’s what happened last Thursday evening at Cape Town International Airport in South Africa, when a PwC executive was acting like a jag to a South African woman and her family, and the woman’s daughter, Bulelani Ngcauzele, tweeted out a couple videos of the incident.

Ngcauzele told News24 in South Africa that she and her family had taken their stepfather to the airport on Thursday and were at the ticket counter sorting out a booking issue when the confrontation with the PwC executive began:

“My mom was standing behind us with her trolley and luggage. This man came up to her with his suitcase and ticket in hand [without a reason to be at the counter] and started going off about how f…d up the country is because of ‘you people’,” Ngcauzele said.

“She was very calm about it and told him to leave her alone, but he continued to harass her. He thought she was on her own, but my brother was making a video of what was happening.”

Ngcauzele said she had intervened when the man charged her brother, wanting to take his cellphone.

“He was nasty and ridiculous. He told us that all he wanted to do was ‘help you people’ and how he had invested R150m in this country. He was going on about how he ploughed into SA and that ‘these people’ were not fit to lead.”

One recording her brother took with his phone has video, while the other is audio only:

I repeatedly asked him to leave us alone and step away and he wouldn’t. We called for security and nobody helped. They just looked on. An airline counter employee called the police who came to apprehend him and we have opened a case. @PwC is this what you stand for? pic.twitter.com/KteWdSaeuv

— Bulz Ngcauzele (@Bulzlelani) May 31, 2019

Eventually, a staff member from the airline her father was flying with saw and heard the commotion and called the police, according to News24.

“[The man] went toward the bathroom as if he was running away, then headed toward the boarding gates. The police followed him and when he tried to board the officers told him they were aware that there had been an incident,” Ngcauzele said.

While News24 didn’t identify the PwC South Africa executive, Ngcauzele had no problem calling him out on Twitter, and to me, it seems like a pretty good match.

@PwC this racist is part of your staff. Is this really what you stand for in post-apartheid South Africa? In 2019? A black family minding their own business in a public space was attacked by one of your own! pic.twitter.com/bd8LejVJBt

— Bulz Ngcauzele (@Bulzlelani) May 31, 2019

Now, to say PwC South Africa acted swiftly on disciplining the jackass would be incorrect, so it seems. The incident happened on May 30 and the firm didn’t say that it was aware of it until June 1:

We have initiated an immediate investigation into this incident. PwC apologises unreservedly to the individuals involved in this. What was experienced in no way represents the values of the firm, nor the conduct we expect of each and every one of the members of PwC South Africa.

— PwC South Africa (@pwc_za) June 1, 2019

Then earlier today, the firm finally let everyone know that the guy was gone:

The employee involved in a racist incident at Cape Town Airport on Thursday evening has left the firm’s employ with immediate effect. As a firm we don’t tolerate racism and act decisively if any employee is found to have transgressed our values and policies.

— PwC South Africa (@pwc_za) June 3, 2019

This jackass should have been fired on May 31 at the latest, not June 3. And PwC wouldn’t admit that it canned his ass, according to News24:

PwC Africa’s chief operating officer, Fulvio Tonelli, said that following the racist incident, the firm had initiated “disciplinary steps” over the weekend pending a formal investigation into the incident by the firm’s senior leadership. …

News24 asked PwC for clarity on whether the executive had left before a disciplinary hearing commenced, if he left after, or if he was fired. PwC refused to comment.

A case of crimen injuria—a crime under South African common law defined as the act of “unlawfully, intentionally, and seriously impairing the dignity of another,” such as for racism—had been opened following the incident, and criminal charges against the PwC executive are pending, according to News24.

The post PwC South Africa Executive Learns That Being a Racist D-Bag In an Airport Will Get You Fired appeared first on Going Concern.

And that’s not a compliment.

The Australian Financial Review reports:

Deloitte has attacked the way the corporate regulator assesses audit quality as inaccurate, “not fit for purpose” and too volatile, after revealing its latest inspection findings were the poorest of the big four consulting firms.

The Australian Securities and Investments Commission found that in 14 of 44 key audit areas, or 32 per cent, Deloitte’s auditors had not done enough work to ensure the related information was free from error.

This result, from a small risk-targeted sample of public company audit files, was a worse result than EY (22 per cent), KPMG (21 per cent) and PwC (12 per cent) for big four audits covering the 18 months to June 2018.

Jamie Gatt, Deloitte Australia’s managing partner of audit and assurance, said the firm didn’t agree with some of the ASIC’s assessments but he did not disclose the details of the disputed findings, according to AFR. He added: “We are on record in saying that we do not believe individual inspection reports provide an accurate picture.”

Imagine KPMG U.S. saying something like that the next time it gets a 50% audit deficiency rate in a PCAOB inspection report. But instead of whining about its bad inspection results like Deloitte Australia, KPMG always takes its lashings from the PCAOB with a smile and swears it’ll do better next time.

For example, in their response to KPMG’s horrible 2017 PCAOB inspection report, Chairman and CEO Lynne Doughtie and Audit Vice Chair Frank Casal said in a letter to the regulator:

We take the findings from the PCAOB inspection process seriously and believe the inspection process provides valuable insights to improve the quality of our audits. We are committed to full cooperation with the PCAOB, appreciate the professionalism and commitment of the PCAOB staff, and value the important role the PCAOB plays in improving audit quality.

On the other hand, Gatt railed against the ASIC, saying it needs to put more resources into the inspection process and hire more skilled staff.

“For too long, ASIC has been in need of increased resources to enhance its inspection methodology and approach and to attract greater quantum and more skilled inspection resources,” he said.

My advice to Gatt is this: RELAX. There’s always peaks and valleys in audit regulator inspection reports. Look at your firm, for instance. According to AFR, Deloitte had the second-lowest audit deficiency rate (16%) behind PwC (12%) for the 18 months before December 2016. And during that same period, KPMG in Australia had the worst deficiency rate (36%) of the Big 4, but during the 18 months to June 2018, KPMG had the second-lowest amount of errors (21%) behind PwC (12%).

Same thing in the U.S. Among inspection reports the PCAOB issued in 2011, Deloitte had the highest audit deficiency rate among the Big 4 (42%) and, believe it or not, KPMG had the lowest (23%). Now jump ahead to 2017 inspection reports released by the PCAOB, and the two firms have flipped: Deloitte had the lowest (20%) and KPMG the highest (50%). We’re still waiting for EY’s 2017 inspection report to be released.

So don’t worry, Jamie. I’m sure Deloitte will do better next time. Maybe.

The post When It Comes to Audit Quality, Deloitte Is the KPMG U.S. of Australia appeared first on Going Concern.

Whoa, if you haven’t seen by now, the Queen’s PwC announced some pretty big news earlier today.

The Wall Street Journal reported:

Professional-services firm PricewaterhouseCoopers LLP on Wednesday announced various measures aimed at overhauling its U.K. audit business, amid growing regulatory concerns about the quality of the country’s audit sector.

PwC, one of the Big Four accounting firms that also include Deloitte LLP, Ernst & Young LLP and KPMG LLP, said it is splitting its current U.K. assurance practice into two distinct businesses, effective July 1.

The audit practice will focus on external audit and audit-related services, while the company’s risk assurance practice will conduct internal audits and work on issues such as cybersecurity and technology risk, PwC said.

OK, that there is newsworthy, but if you’ve been following all the drama going on right now in the U.K. regarding the audit profession, you’d know that PwC’s action plan falls short of what the Competition and Markets Authority wants each Big 4 firm to do, and that is split their audit and consulting operations into two separate businesses, with different CEOs, boards, and financial statements for each.

Well, now’s your chance!

The post Hiring Watch ’19: Hey Auditors, PwC U.K. Now Has 500 Job Openings For You to Fill appeared first on Going Concern.

The smell of fresh partners has been permeating through the air this week. First, PwC unleashed its 2019 class of 249 new partners and principals on the 50 states and Mexico on May 31. Then earlier today, I saw this:

Baker Tilly admits 20 new partners specializing in a variety of industries and services across the firm. Congratulations to our newest partners! https://t.co/SAWgxFNcKy pic.twitter.com/rEdV0ZIxH3

— Baker Tilly US (@BakerTillyUS) June 4, 2019

I don’t know if this year’s class of 20 new partners is the largest in Baker Tilly’s history, but it’s definitely the biggest since 2013. Last year, BT admitted 11 new partners, 10 in 2017, 15 in 2016, seven in 2015, 13 in 2014, and seven in 2013.

Let’s take a closer look at the class of 2019 by the numbers:

• 11: The number of new partners who are women, or 55% of the class. That’s pretty damn impressive.
• 9: The number of new partners in assurance, the most of any line of service, followed by eight in consulting and three in tax.
• 4: The number of new partners in Philadelphia, the most of any location, followed by three each in Minneapolis, Washington, DC, and Milwaukee.
• 3: The number of new partners who are Certified Internal Auditors.

And here are the 11 women and nine men in the class of 2019:

• Yunis Altahami, CPA, Assurance, Southfield, MI
• Carol Bolles, CPA, Assurance, Minneapolis
• Kevin Brandt, MBA, Consulting, Washington, DC
• Jeremy Chapman, CPA, Assurance, Philadelphia
• Ashley Deihr, CPA, CIA, CFE, Consulting, Washington, DC
• Brigid Elliott-Boger, CPA, Tax, Madison, WI
• Jennifer Finger, CPA, MSA, Assurance, Chicago/Houston
• Paul Frantz, CPA, Assurance, Milwaukee
• Shanté George, CIRA, Consulting, New York City
• Patrick Heavens, CPA, Assurance, Philadelphia
• Andrea Jansen, CPA, CFE, Assurance, Madison, WI
• Zachary Keenan, CPA, Assurance, Allentown, PA
• Amanda Klein, Consulting, Milwaukee
• Joseph McCaffrey, CPA, Consulting, Washington, DC
• Tracey Nguyen, JD, MBA, Consulting, Philadelphia
• John Romano, CPA, CIA, CFE, CITP, CSM, Consulting, Philadelphia
• Donna Scaffidi, CPA, Tax, Milwaukee
• Christopher Schmidt, CPA, Assurance, Appleton, WI
• Renee Schwartz, CPA, MBT, Tax, Minneapolis
• Mallory Thomas, CPA, MBA, CIA, CITP, Consulting, Minneapolis

Congrats to all the new partners!

The post Promotion Watch ’19: Baker Tilly Admits 20 New Partners, 11 of Whom Are Women appeared first on Going Concern.

Remember that KPMG U.K. male senior partner we told you about last week, the one who was accused of being a bully and was found by the firm to have acted like a jerk but not a bully when he was probably acting like a bully, and then two well-respected female partners quit in protest?

Well, we have an update, courtesy of the Financial Times:

One of KPMG’s most senior partners at the centre of a bullying dispute has quit his role and taken a leave of absence from the Big Four accounting firm after fresh allegations about his conduct surfaced last week.

KPMG said in a letter sent to all UK staff on Monday that Sanjay Thakkar, head of the firm’s advisory unit — one of its most profitable divisions — decided to step down from his role this week “in the wider interest of the firm”.

In the wider interest of the firm? Oh really? Thakkar should have been canned last week, but because he led one of KPMG U.K.’s most profitable divisions, KPMG gave him every benefit of the doubt imaginable during its investigation. Why? Because like the other Big 4 firms, all KPMG really cares about is money.

And this section of today’s FT article proves my point:

Several current and former KPMG employees told the FT that they felt complaints raised formally and informally about Mr Thakkar were not taken seriously or dealt with appropriately. Several fear the 50-year-old was protected because he brought in a large amount of revenues.

BOOM!

Last week it was revealed that Maggie Brereton, former head of U.K. transaction services and a nonexecutive U.K. board member, and Ina Kjaer, former head of U.K. integration in the deal advisory team, had resigned in February because they felt KPMG mishandled its investigation into Thakkar’s behavior.

Concerns were raised about Thakkar’s behavior last October, according to FT, and KPMG also received a formal complaint through the firm’s whistleblower hotline that same month about his conduct during a meeting.

His staff even gave his shitty behavior a nickname! According to FT, one former KPMG employee called it “being Sanjayed.”

But an investigation by KPMG concluded that despite the complaints, Thakkar wasn’t a bully, but “aspects of the individual’s behavior required improvement.” So they made him apologize to some people in January and forced him to take leadership coaching.

Taking over for Thakkar is Melanie Richards, KPMG’s deputy chair, who will become acting head of deal advisory in addition to her existing role, pending the appointment of new leadership.

According to FT, KPMG U.K. Chairman Bill Michael said in the email to staff that he had “heard enough over the past few days to know that not all of our people feel confident to speak up when they have concerns,” adding: “This is unacceptable.”

No, Bill. What is unacceptable is that it took two of the firm’s most prominent female partners to quit and even more allegations that Thakkar’s conduct was a little more worse than “aspects of the individual’s behavior required improvement” to realize that the people (presumably women) who had to put up with this guy’s crap may have been right about him being a bully in the first place.

Do better, KPMG. Do better.

The post KPMG U.K. Partner Accused of Being a Bully Decides He Probably Shouldn’t Be a Partner Anymore appeared first on Going Concern.

I dunno about you but I’ve been in a real funk since at least October. Maybe it’s just a seasonal thing, maybe I need professional help idk, but either way, summer really surprised me. It was like one day temperatures were cooling and leaves were falling, the next I woke up from yet another nap and suddenly it’s 95 degrees with a red hot sun shining down on trees plump with fresh green leaves. I hate summer. Give me an igloo with a wolfskin blanket and a fire in Northern Minnesota over East Coast humidity any day. I digress.

If you, like me, were taken completely by surprise when summer snuck up on you, well then I guess we’re not alone. Actually, it’s sort of a known, if somewhat misunderstood, phenomena that time appears to pass faster as you age; add to that new research that says fatigue and a lack of stimuli (think: repetitive daily tasks, the bulk of which are boring as shit) can make time seem to be slipping out of our hands quicker and quicker. That thing they say about time flying when you’re having fun? Yeah, bullshit. Time flies when you’re tired, rapidly aging, and bored as hell. I imagine a good number of you fit in at least two of those categories.

So if you’ve ever had one of those “oh shit, when did Christmas get here?” moments, it’s not just your procrastination to blame. I mean, maybe that’s a big part of it but let’s go ahead and blame it on some outside factor. In the meantime, let’s talk about how to make the most of the next three months and plug ever onward through the CPA exam.

There are about 2,208 hours in summer, many of which are daylight. Let’s be generous and say you sleep seven hours a night, which takes up 644 hours. Let’s also be generous and assume you’re a normal human being with a regular job working eight hours a day, five days a week, which makes 512 hours, give or take. That leaves 1,052 hours to work with if my math is correct, which it may entirely not be since I leave that shit to you guys.

You need about 300-400 hours to study for the CPA exam, depending of course on your core understanding of tested concepts going into it, as well as a plethora of other factors we won’t get into here. Barring a few exceptional outliers, most people fit nicely into that window as far as study time needed goes. So technically speaking, you absolutely could study for and pass all four parts of the CPA exam during summer while working a full-time job and getting a decent night’s rest, but who the hell would do that to themselves?

The entire reason for that exercise was to show that although time flies when you’re parked on the couch stuffing your face, scrolling Reddit, and binge-watching Mad Men for the fifth time, you actually have a lot more time than you think. So if you must, budget it. As you can see from the exercise above, there’s plenty to go around. Prioritize the things that are important to you like time with friends, lounging at the pool, collecting sweat stains on your white t-shirts, whatever.

Second, be realistic. If you’re one of those people who thrives on sunbathing (do people still do that?) and loitering at outdoor cafes when the weather is nice, then don’t be a dumbass and try to cram in too many CPA exam sections during summer. Do that shit when it’s all slushy and gross outside. Unless you’ve blown it off for the last three years and you’re one rescheduled exam away from being counseled out of public accounting forever, there’s absolutely no reason to force yourself to bite off more than you can chew. Bragging rights? Nope, no one gives a shit. Oppression points? Yeah, OK, maybe you’ll be able to complain about how rough your life is when you’re cooped up in the air conditioning doing MCQ drills for the eleventy billionth time while everyone else is out enjoying the nice weather, but see above re: no one gives a crap. At the end of the day, assuming you pass, you and the guy who took all 18 months to pass have exactly equal certifications.

My old boss at CPA review used to (and probably still does) say the CPA exam is a marathon, not a sprint. You ever try to run a marathon in the middle of summer? Fuck that. Pace yourself. Take the time to appreciate a cold beer on a hot patio. Enjoy it now while you can, because summer only comes once a year. Cheers.

The post Here’s How to Study For the CPA Exam and Still Salvage a Decent Summer appeared first on Going Concern.

New partners were deified recently at DHG, Wipfli, and BDO U.K., plus new leaders were named at Wipfli and PwC in South Africa.

Dixon Hughes Goodman admits seven new partners and principals
Seven lucky boys and girls got their seat at the big kids table on June 1, but the class of 2019 is smaller than other DHG classes in recent years. Last year, the top 20 accounting firm added 13 new partners and principals, 11 were admitted in 2017, nine in 2016, 16 in 2015, and 12 in 2014.

Let’s take a closer look at the class 0f 2019 by the numbers:

• 4: The number of new partners and principals in tax, the most of any service line.
• 3: The number of new partners and principals in Atlanta, the most of any location.
• 3: The number of new partners and principals whose first names begin with J.
• 2: The number of new partners and principals whose last names begin with S.
• 1: The number of new partners and principals who are female, or 14% of the class.

Here are the six men and one woman who make up the DHG class of 2019:

• Brian Burns, Forensics and Valuation, Richmond, VA
• Chip Chambley, Tax, Atlanta
• Janice Kong, Transaction Advisory Services, Tysons, VA
• Adam Quattlebaum, Tax, Greenville, SC
• John Seymour, Assurance, Atlanta
• Jack Small, Tax, Atlanta
• Dennis Theodossis, Tax, Asheville, NC

Wipfli names Kurt Gresens new managing partner, admits 11 to partnership
It’s already been a busy June at Milwaukee-based Wipfli, as partners at the top 20 accounting firm elected Kurt Gresens as the firm’s new leader, effective June 1. He will succeed Rick Dreher, who is completing the final term of his 13-year tenure as Wipfli’s managing partner and chairman of the board.

Gresens, who joined Wipfli’s Wausau, WI, office in 1992 after graduating from the University of Wisconsin-Madison, has been a partner at the firm since 2006 and was elected to Wipfli’s board of directors in 2013.

Since 2016, Gresens has been on the firm’s leadership team as overall practice partner. During his career at Wipfli, Gresens has served a variety of clients across industries and played a key role in helping create the firm’s Vision 2020 and Wipfli 2025 strategies, the firm stated in a press release.

Kelly Fisher, who most recently led the firm’s tax practice, is taking over as Wipfli’s new practice partner.

Wipfli also announced that 11 new partners officially got their stripes on June 1. The class of 2019 is slightly smaller than the 14 new partners admitted in 2018 and the 13 admitted in 2017.

Here’s a review of Wipfli’s new class of partners by the numbers:

• 5: The number of new partners in tax, the most of any service line, followed by four in consulting and two in audit and accounting.
• 4: The number of new partners who are women, or 36% of the class.
• 3: The number of new partners who are based in either Madison, WI, or Minneapolis, the most of any location.
• 1: The number of new partners who have the last name of Scully.

Here are the lucky 11:

• Jaili Fajardo, CPA, Tax, Lincolnshire, IL
• Brian Gaumont, Audit and Accounting, Madison, WI
• Casey Kretz, CPA, Tax, Eau Claire, WI
• Chris Lockhart, CPA, Tax, Minneapolis
• Anita Mahamed, CPA, CFP, Tax, Madison, WI
• Kevin Scully, Consulting, Madison, WI
• Nick Smith, Consulting, Minneapolis
• Dana Springer, CPA, Tax, Havre, MT
• Ryan Swiderski, Consulting, Minneapolis
• Michelle Swoboda, CPA, Audit and Accounting, Duluth, MN
• Mike Vaccarella, CPA, CGMA, CM&AA, Consulting, Chicago

BDO U.K. admits 14 new partners
The 14 people added to the partnership this week by the Queen’s Bravo Delta Oscar are in addition to the 10 new partners added by the firm since the start of the year.

The promotions span the firm’s London, Birmingham, Southampton, Manchester, and Ipswich offices.

The 14 newest BDO U.K. partners are:

• Tim Betts, Advisory
• Susan Blower, Advisory
• Kevin Haywood Crouch, Advisory
• Caryn Deeley, Advisory
• Lyndon Firth, Tax
• Steve Hoon, Tax
• Gareth Jones, Advisory
• Tracey Keeble, Audit
• Helen O’Kane, Advisory
• Laura Pingree, Audit
• Steven Roberts, Audit
• Paul Townson, Tax
• Robert Waters, Advisory
• Steve Watts, Tax

PwC South Africa appoints its first woman CEO
Shirley Machaba is the first black African woman to be appointed as CEO of PwC South Africa. She will succeed Dion Shango, who takes over as CEO of PwC Africa on July 1. Shango has led PwC South Africa since July 2015.

A chartered accountant, Machaba has been a partner in PwC’s assurance services division for more than 15 years, and she has more than 26 years of internal and external audit, risk management, compliance, and governance experience within the private and public sectors across all industries.

Machaba also served as a member of the PwC Africa Governance Board and as chairperson of the PwC South Africa Governing Board from October 2012 to June 2018. She is currently PwC Africa’s governance, risk, and internal audit leader, as well as diversity and inclusion leader for PwC South Africa.

And the good news for Shirley is she doesn’t have to deal with this racist bag of trash who no longer works at PwC South Africa.

The post Promotion Watch ’19: DHG Admits 7 New Partners, New MP and 11 Partners at Wipfli, BDO U.K. Adds 14 New Partners appeared first on Going Concern.

We got a tip the other day that said an employee of one of the top accounting firms in the U.S. got into some trouble with the law last week:

Look into the stabbing from Altedena on May 29th. The alleged suspect, Kristopher Brown works as a Senior for BDO Los Angeles. He’s currently in jail on a $1,050,000 bail.

Sure enough, the website Pasadena Now reported that Brown, 35, allegedly jumped out from behind a bush and repeatedly stabbed an Altadena man hiking in Eaton Canyon near Pasadena, CA, on the evening of May 29. However, the article didn’t reveal Brown’s occupation or employer.

So, I asked our tipster, who used to work for BDO USA in California, for some more information about Brown. This person told me:

I did not work with him personally but I still have colleagues there and a few people reached out to me to let me know of the situation. They were in desperate need of seniors for this past busy season and they hired him to fill one of our spots. One of my old staff messaged me to let me know that they had removed Kristopher Brown from the BDO skype and email systems. He also informed me that his career adviser is the same as Kristopher’s and when he spoke with her they said they were certain it was him. He hasn’t been at work since the incident and no one has been able to get in contact with him. I have been in contact with several people who still work at the BDO LA office and they have all confirmed the same information.

I reached out to BDO to find out whether Brown is still an employee of the firm and if the firm wanted to issue a statement, but I still haven’t heard back from anyone yet. And I doubt I will.

The hiker, who was hospitalized with multiple stab wounds to his upper torso, survived the attack, but authorities said he faces a long road to recovery, according to Pasadena Now. The victim and Brown apparently didn’t know each other.

After he was stabbed on the hiking trail, the victim ran toward a nearby house and was allegedly chased by Brown and stabbed again before collapsing in the front yard of a home, according to published reports. Brown was arrested by authorities shortly afterward and they took possession of the knife he allegedly used in the attack.

Brown was in court on May 31, where he pleaded not guilty to one count each of attempted murder and assault with a deadly weapon. As our tipster noted, Brown is being held on $1,050,000 bail. He is expected back in court on June 17.

We’ll update this article if we do hear back from BDO regarding Brown’s employment status.

The post Man Who Was Arrested For Repeatedly Stabbing a Hiker Near Los Angeles Apparently Works at BDO appeared first on Going Concern.

The Financial Times reported today that three—THREE—senior executives at KPMG U.K. were aware of and ignored concerns from staff as early as 2017 alleging senior partner Sanjay Thakkar was acting like a bully before they finally got around to launching an investigation about the complaints last October.

KPMG employees approached the firm’s UK managing partner Philip Davidson, its deputy chair Melanie Richards, and its head of HR Anna Purchas with concerns about Sanjay Thakkar’s behaviour at different points over the past two years, according to several people close to the firm.

KPMG is putting on a clinic of what not to do if your firm gets complaints from employees about the way a partner or manager behaves. The firm’s ineptness has resulted in two longtime female partners quitting the firm in protest over the way it handled the bullying complaints, as well as strife among its staff, some of whom now believe that KPMG did everything in its power to try and protect Thakkar because he was the head of the firm’s advisory unit, which just so happens to generate a lot of revenue.

In 2018, KPMG U.K.’s deal advisory practice, which Thakkar oversees, increased its revenues by 14%—the highest of the firm’s four divisions, which include audit, consulting, and tax. So of course the firm was trying to protect him.

Earlier this week, when the shit started hitting the fan at KPMG after FT, The Times, and others published articles about why Maggie Brereton, former head of U.K. transaction services and a nonexecutive U.K. board member, and Ina Kjaer, former head of U.K. integration in the deal advisory team, resigned in February, KPMG emailed its staff to say Thakkar had quit his role as head of deal advisory “in the wider interest of the firm” and was taking a leave of absence while a new investigation into the bullying accusations was being conducted.

The first investigation, which was initiated after concerns were raised—informally and formally—about Thakkar’s behavior last October, resulted in KPMG concluding that Thakkar wasn’t a bully, but “aspects of the individual’s behavior required improvement.” So they forced him to apologize to some people in January and forced him to take leadership coaching.

However, FT revealed today that Davidson, Richards, and Purchas had previously received several informal complaints about Thakkar throughout 2017 and 2018 and did nothing about it.

Hmmm, maybe this could be the reason for their inaction on the matter:

Mr Thakkar sat on KPMG’s executive leadership team alongside Mr Davidson and Ms Purchas until this week. The leadership team now includes Ms Richards instead of Mr Thakkar as she has taken over as acting head of deal advisory.

And now, according to FT, Purchas has been told to lead an initiative on how KPMG can create a stronger culture. HA! That’s like having David Middendorf instructing a firm’s auditors on how to legally adhere to the PCAOB’s audit inspection process.

KPMG U.K. Chairman Bill Michael said in his email to staff on Monday that it was unacceptable “that not all of our people feel confident to speak up when they have concerns.”

I wonder why that is, Bill? C’mon, Bill. You know exactly why they don’t speak up.

Related articles:

Two KPMG U.K. Female Partners Had Enough Of Working At a Firm That Protected An Alleged Bully
KPMG U.K. Partner Accused of Being a Bully Decides He Probably Shouldn’t Be a Partner Anymore

The post Here’s More Proof That KPMG U.K. Totally F*cked Up the Way It Handled Bullying Allegations Against Partner appeared first on Going Concern.

“[T]he Andersen name may have some negative connotations in audit.”

— Mark Vorsatz, Andersen Global chairman and Andersen Tax CEO, who is a former Arthur Andersen partner, on why Andersen Global firms only provide legal and tax services.

[Bloomberg Tax]

The post There’s a Good Reason Why Andersen Global Firms Don’t Do Audit Work, Chairman Says appeared first on Going Concern.

What I’m about to say may come as a shock to you, dear reader, if you’re at all familiar with the comings and goings of this here website over the years. Believe it or not, there are people out there who accuse Going Concern of being too cynical about the profession as a whole. Crazy, I know, but those people exist.

Anyway, as completely unfounded as that accusation might be, I guess I can understand where the critics are coming from. Certain things we say and topics we choose to cover may be construed as, I dunno, sort of negative I suppose. Therefore in the spirit of proving that we aren’t just a bunch of bitter assholes out to rip on the profession for no reason, we think it’s important — if just every now and then — to report on the good stuff. It’s not our fault “good stuff” is in such short supply.

This year, Deloitte Impact Day turns 20, hence we wanted to wish them a happy birthday or whatever it is you’re supposed to do to congratulate an accounting firm on an event it’s organized going on two decades.

Being Deloitte, we really hoped the anniversary announcement would come with a spreadsheet detailing exactly how many kittens have been rescued and habitats humanitized, but we’ll settle for some bullet points instead.

• Each year on Impact Day, nearly 25,000 Deloitte professionals come together in 80 cities across the country to volunteer on more than 1,000 projects-contributing 179,000 collective hours of volunteer service.
• All Impact Day projects are created, led, and executed by Deloitte professionals.
• Many of Deloitte’s junior professionals get the chance to serve in leadership roles (leading and organizing Impact Day projects) that they may not have access to otherwise.

A few of the 2018 Impact Day activities included painting a public school playground and “teaming with an inner-city farming plot on its daily operations.” We’ll update you on 2019 if anything exciting happens or you Green Dotters can just tweet us about how you aren’t billing time this year. You can find even more details on past Impact Day projects (along with a dash of that GC cynicism you know and love) in our archive.

The post Deloitte’s Giving Spirit Is Almost Old Enough to Drink appeared first on Going Concern.

Bear with me, I’m writing this on my phone at the side of a pool. Anyway, talk about your Friday night news dumps. This came out of the blue:

Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL), one of the world’s leading audit, tax and advisory firms, announced today that Chief Executive Officer Mike McGuire will assume the role of CEO emeritus, effective August 1, 2019. In this role, McGuire will serve as a brand ambassador for the firm, focusing on business development and supporting key client relationships. McGuire also will help execute a seamless leadership transition for the firm

To us, this was unexpected because last November, GT’s partnership board voted unanimously to extend McG’s reign at the Purple Rose of Chicago until July 31, 2021, his mandatory retirement date.

GTers, if this news wasn’t unexpected to you, give us the lowdown about what’s going on by emailing us.

McGuire took over as CEO in January 2015, replacing the ultra-dynamic Stephen Chipman.

Prior to becoming CEO, McGuire served on Grant Thornton’s senior leadership team as national managing partner of operations and previously was managing partner of the firm’s Carolinas practice. He also is an Arthur Andersen alum.

In a press release, McG said:

“It has been the honor of my life to lead Grant Thornton over the past five years, and I am so proud of all we’ve accomplished as a team. Our firm is on a great path to continue to create value for our clients, build on our leading quality and culture, accelerate innovation and growth, and disrupt our profession.

“As fast as the marketplace is changing, I believe we now need to transition as quickly as possible to new leadership that can take us on the next leg of our journey to become the ‘firm of the future’ over the next five years or more. I will do everything in my power in the coming years to help the firm navigate this transition and continue to succeed.”

But in between helping the firm “continue to succeed,” McGuire will now have more time to spend at Wrigley Field and make dumb Status Go videos with Rickie Fowler.

#TBT to my directorial debut. Just like golf, a good mic drop is all in the wrist. Isn't that right @mikemcguireCLT? #StatusGo pic.twitter.com/aZNoqfRq3c

— Rickie Fowler (@RickieFowler) December 21, 2018

Bradley Preber, national managing partner for business risk services at Grant Thornton, will serve as interim CEO-elect until a permanent CEO is named, the firm said.

The Partnership Board will continue its previously announced long-term CEO succession process that is currently underway with a leading executive consulting firm.

The firm will be led by Bradley J. Preber who will serve as interim CEO-elect, effective immediately, working closely with McGuire and other members of the senior leadership team until formally accepting the position of interim CEO on August 1, 2019. Preber will temporarily step aside from these roles while he serves as interim CEO.

Preber, who also is an Andersen alum, currently serves as chairman of the Grant Thornton partnership board. He joined GT in 2003 and has held several executive roles, including national managing partner of forensic and valuation services.

He also currently serves as the Phoenix office managing partner.

Related article:

Grant Thornton CEO Mike McGuire Will Hang Around For a Few More Dynamic Years

The post We’re Sure Mike McGuire Will Be Dynamic In His New Role as Grant Thornton ‘Brand Ambassador’ appeared first on Going Concern.

A powerful storm with high winds hit the Dallas area during the afternoon on June 9, blowing out the windows of some downtown skyscrapers, including the building where KPMG is located.

The NBC affiliate in Dallas-Fort Worth reported:

At the KPMG building downtown, nearly a dozen windows were broken when construction debris from another building slammed into the windows between the 17th and 19th floors.

Vince Ortega, chief building engineer with real estate developer Hall Group, said the windows of the KPMG building are “supposed to withstand high winds, high storms, but debris is a whole different story.”

He said the storm hitting on a weekend versus a weekday prevented injuries, as there could have been hundreds of people around when the glass went flying.

“It was a blessing it was on a Sunday and not a Monday. We could have been telling a whole different story if it would have happened during the week,” Ortega said.

We’ve emailed KPMG to see if any Dallas employees have been affected. We’ll update this article when we get any additional information.

UPDATE: A KPMG spokesperson told us it’s “business as usual” for KPMG employees in Dallas today, as the firm doesn’t occupy any space on the floors of the building that were impacted.

The post Mother Nature Vandalized a Bunch of Windows at KPMG Building In Dallas appeared first on Going Concern.

Here’s a roundup of some bad stuff accountants did or were accused of doing over the past week or so.

Auto shop accountant charged with stealing over $175K from employer [Chicago Sun-Times]
Rungnapa Correia is accused of stealing more than $175,000 from a Bensenville, IL, auto repair shop she used to work at as an accountant.

Correia, who was responsible for payroll at Yukikaze Auto, wrote unauthorized checks to herself, which were written out to cash and deposited into her personal account.

She allegedly stole the money between 2010 and June 2017, when the business closed.

She was charged on June 6 with a felony count of theft of more than $100,000. Bond was set at $25,000.

Accountant stole $550K from KC hospital nonprofit, spent on shopping, travel, drugs [Kansas City Star]
Kathleen Frederico pleaded guilty on June 4 to embezzling more than $550,000 from a nonprofit that serves St. Luke’s Hospital. She was charged with one count of wire fraud.

Frederico was the accounting and special projects manager for the Saint Luke’s Foundation from May 1999 until she was terminated in February 2018. She admitted to conducting two fraudulent schemes. In the first scheme, Frederico created unauthorized checks made payable to herself. She entered a different payee into the ledger and created or falsified corresponding invoices to conceal the embezzlement. Evidence showed she stole at least $452,342 under this arrangement.

In the second scheme, Frederico created unauthorized checks in which the foundation paid her personal credit card bill and, on two occasions, a relative. She collected at least $105,333 using this method.

Frederico spent more than $150,000 of the stolen money on shopping and retail, more than $21,000 on internet drug purchases, and more than $30,0000 on travel. She also used it for mortgage payments and other living expenses, authorities said.

Accountant pleads guilty to participating in Ponzi scheme [Associated Press]
Texas accountant Jay Ledford pleaded guilty in Maryland on June 6 to participating in a scheme to defraud investors of hundreds of millions of dollars. Charges included conspiracy to commit wire fraud and aggravated identity theft.

Authorities said the charges stem from a $550 million investment fraud scheme that operated from 2013 through September 2018.

As part of the scheme, Ledford provided fictitious sales agreements and false tax returns to solicit investors to purchase consumer debt portfolios.

Two other people have already pleaded guilty to charges related to the Ponzi scheme.

You can read the indictment here.

Milford accountant charged with embezzling more than $1 million [WHDH-TV Boston]
Antonis Mallios, a former part-time accountant and bookkeeper for a Framingham, MA, sound engineering company and a Methuen, MA, child health center, has been charged with embezzling more than $1.3 million from the businesses over a four-year-period.

He was charged on June 4 with 10 counts of larceny over $1,200, two counts of false entry into corporate books, and one count of being a common and notorious thief in connection with the alleged embezzlement of over $1 million from the two separate employers.

Mallios began working for SVA Inc. in Framingham in 2011, and his employers determined he was creating checks payable to himself out of the business’s bank accounts. He is accused of embezzling more than $860,000 from SVA.

At the Child Health Center in Methuen, authorities said Mallios was making false entries into the business’s books, records, journals, and QuickBooks to cover up the theft. He is accused of stealing more than $470,000 from the child health center.

Hoboken accountant didn’t pay $914K of income tax: prosecutor [Patch]
Louis Picardo, an accountant based in Hoboken, NJ, admitted he failed to pay more than $914,000 in taxes due on income generated from his accounting firm and various rental properties he owned.

He pleaded guilty to one count of federal income tax evasion on June 5.

Picardo served as the tax collector in Hoboken between 1973 and 2008 and was a partner in Cannarozzi & Picardo LLC, a Hoboken-based accounting firm. He also was a member of multiple entities that managed both commercial and residential properties in Hudson County, NJ.

Picardo failed to report $3,725,853 in taxable income that he collected from Cannarozzi & Picardo and the entities on federal income tax returns he filed with the IRS for the tax years 2012 to 2015, resulting in a tax loss to the U.S. of $914,908, prosecutors said.

Former St. Bonaventure’s accountant pleads guilty to fraud over $5K [CBC]
Kim Stagg, the former accountant at St. Bonaventure’s College, pleaded guilty on June 7 to defrauding her then-employer of more than $5,000.

She also faces nine other charges: one count of criminal breach of trust and four counts each of forgery and using a forged document.

The fraud and breach of trust charges span a period from November 2013 through March 2018, when Stagg was fired.

The post Accountants Behaving Badly: Lots of Theft, Ponzi Scheme, Tax Evasion appeared first on Going Concern.

What will the accounting industry look like in 2040? Will Skynet launch a nuclear apocalypse, leaving robots to inherit Earth’s charred, radioactive remains, or will it just ruin the Terminator franchise with unnecessary and confusing reboots?

Will accountants be plugged into a giant matrix, their bioelectricity used to power evil machine overlords, even though a human being is about the stupidest thing you could possibly use as a battery (sorry Wachowskis)?

We sat down with Pavan Satyaketu, a leader at consulting firm Advaion, to get some real answers. Then we did some research of our own to make sure Pavan knows what he’s talking about (turns out, he does!) and to create some more realistic projections on the future of accounting.

Here are four ways the accounting industry will (probably) change in the next 20 years. We’re pretty confident about these predictions, but if robots or zombies do rise up and destroy human civilization, you’re welcome to come back and tell us how wrong we were.

1. (Human) accountants will still be a thing …

With the advancement of artificial intelligence (AI) and computer automation in recent years, large accounting firms have adapted to a much more IT-reliant work environment.

The Big 4 firms are quickly moving from rows of paper-filled drawers to bot-created computer files stored on invisible cloud servers—virtually eliminating the need for human data entry.

With all these automated changes in the world of accounting, many number-crunching experts have begun to ask the logical question: Are accountants a dying breed?

The quick answer: No. But in order to remain relevant and employed, future accountants and auditors will be forced to make better use of their interpersonal and analytical skills to supplement the continuous changes in automated technology. In other words, we don’t need Miss Cleo to tell us what we already know—human interaction still reigns.

2. … but accounting jobs will look a lot different

It wasn’t long ago that most of us were jumping for joy at the sight of two line graphs crossing on our TI-83 calculators. Today IBM, General Electric, and other tech giants are helping businesses save money and improve accuracy through the use of robot automation for routine tasks.

Due to these advances, many accounting firms are restructuring to remove administrative jobs and are now using AI for accounts payable and receivable. With basic accounting being outsourced to microchips, how much work is left for humans?

According to Satyaketu, a lot. An advisor and former Big 4 accountant, he believes the next generation must understand how the entire business works, not just the accounting department.

Satyaketu said that tomorrow’s accountants will be required to have plenty of advising and consulting skills, as they’ll be called upon to help clients forecast and evaluate financial decisions in ways a computer cannot. And as technology will automate more of the basic numbers tasks, accountants will also need to get better at dealing with *gasp* real people.

“In 20 years, we will have AI interpreting all of our work, but ultimately we’ll need to relay that information to the client,” he said. “You’re going to have to use your base knowledge and advisory skills, as well as interpersonal skills, to a much greater extent than today.”

3. Accounting basics will still be invaluable

Computers have never been perfect. And from what we learned from the Back to the Future series, there’s a good chance two decades won’t change that. Accountants will still need solid math and basic accounting skills to solve solutions that AI might misinterpret.

“Technology will make things much more efficient, but we’re still going to have to go into IT and pull out the anomalies and discrepancies and work through them,” Satyaketu said. “You’re going to have to have the knowledge to say, ‘Well, the computer is giving us an output of x, but I know that it should be y, and I can prove it.’ It will force us to be much more analytical in that regard.”

But again, tomorrow’s clients are going to want to see the faces behind those numbers. And that means accountants who can also deliver some good ol’ fashioned service with a smile will have a leg up on those who struggle to speak human.

“We’re going to have to sit down with clients and go through business processes,” Satyaketu said. “Accountants will be responsible for explaining to companies what they can fix and how they can reposition themselves to improve their business.”  

4. Robots will be our friends, not our overlords (at least not yet)

Why won’t robots take over the accounting world? Well, imagine Bender from Futurama running a client meeting. It’d be funny, sure, but about the fifth or sixth time he chugged a beer and burped fire across the conference table, the clients would run screaming for the hills.

AI is great for some things, but firms won’t want it at the forefront of the company. It won’t be responsible for key client interactions, and it won’t get the final say on business-critical decisions. We’ll still need people for that—preferably, people who are good at talking to and working with our robot buddies.

“I think accountants who understand technology will rise to the top,” Satyaketu said. “Yes, the robots are coming, but they aren’t going to take away our jobs.”

If the current market for accountants is any indication of what is in store for the industry, the future looks bright for those hoping to make it at a big firm. Despite automation, there will likely remain a high demand for those willing and able to adapt.

“Accounting will always be in demand,” Satyaketu said. “While we may change the way we do our jobs and interact with clients, the profession will not fade.”

Your accounting job future is now

As the accounting world continues to evolve, why not take advantage of the opportunity to grow with it? A career in advising gives you the skills accountants will need in 2040 today, exposing you to every part of the business and helping you grow your consulting and interpersonal skills.

And if you’re going to make the switch, there’s no better place to do it than at Satyaketu’s firm, Advaion. Lucky for you, it’s hiring now.

At Advaion, you’ll not only learn to become a better advisor, consultant, and client confidant, you’ll also get to work with cutting-edge technology like AI and business process automation. Forget 2040—at Advaion you can start living the future today.

Click one of the links below to apply for an open advising job at Advaion.

Accounting jobs in New York City and Fort Lauderdale, Florida

Advaion Senior Consultant (New York City)

Advaion Senior Consultant (Fort Lauderdale, Florida)

The post Accounting in 2040: 4 Ways the Industry Will (Probably) Change in 20 Years appeared first on Going Concern.

For years, the PCAOB has pleaded with auditors to quit altering audit workpapers after being notified of an inspection, and some auditors continue to thumb their noses at the PCAOB. Like Humayoun Khan, a former PwC auditor, who was accused of improperly altering a previously archived workpaper in anticipation of a PCAOB inspection.

A PCAOB enforcement order on June 4 states:

Khan was an audit manager on PwC’s audit of the financial statements of issuer A for the fiscal year-ended October 31, 2015.

After PwC released its audit report for the Issuer A Audit, Khan participated in the process of assembling a complete and final set of audit documentation for retention for the audit. Shortly after completing that process, which is commonly referred to as archiving the work papers, Khan became aware that the Board’s inspection staff had selected the Issuer A Audit for review as part of the Board’s annual inspection of PwC.

The archived workpapers consisted of two types of documents: electronic documents retained in “read-only” form in PwC’s electronic workpaper archive system and hard-copy documents that the engagement team assembled in a binder and checked into PwC’s Records Center, the order states.

This is when Khan exercised poor professional judgment:

In advance of the inspection, Khan reviewed a memorandum that the engagement team had prepared during the audit to describe certain work the team had performed to evaluate Issuer A’s disclosure of liquidity risk. The engagement team had previously archived the Liquidity Risk Memo as part of the hard-copy work papers.

After reviewing the Liquidity Risk Memo in advance of the inspection, Khan asked a junior member of the engagement team to make changes to an electronic version of the Liquidity Risk Memo that the junior member had maintained on his computer.

After the junior member of the engagement team made certain changes, he provided the revised version of the Liquidity Risk Memo to Khan in electronic form on March 12, 2016. Thereafter, on or before March 14, 2016, Khan made further changes to the Liquidity Risk Memo. Through their changes, Khan and the junior member of the engagement team substantially revised the description of the work the engagement team performed in connection with Issuer A’s liquidity risk disclosure. Khan thereafter arranged to replace the originally archived version of the Liquidity Risk Memo with the revised version in the hard-copy work paper binder, which the engagement team had checked out of PwC’s Records Center.

During the inspection, Khan provided a copy of the improperly altered liquidity risk memo to the PCAOB inspection team and failed to let them know about the changes to the document, according to the order.

Khan, who worked at PwC from October 2005 to March 2018, was barred from associating with a registered public accounting firm for one year for failing to cooperate with a board inspection and violating PCAOB audit documentation standards.

The post PCAOB Doesn’t Take Kindly to Auditors Who Alter Audit Documentation Prior to an Inspection appeared first on Going Concern.

Two noteworthy things came out of former Dallas police officer Amber Guyger’s first court appearance on June 6 before the judge who will preside over her murder trial in the slaying of PwC accountant Botham Jean:

1. Jury selection to begin Sept. 6. That is the one-year anniversary of when Guyger came home to the South Side Flats apartment complex after a shift just before 10 p.m., still in uniform, went to Jean’s apartment on the fourth floor thinking it was hers, even though she lived on the third floor one unit directly below Jean, opened the front door which was ajar, saw Jean who was watching a football game on his couch and thought he was an intruder, and fatally shot the PwC Dallas accountant in the chest.

The Dallas Morning News reported that potential jurors will first fill out a questionnaire, and those who aren’t disqualified will return on Sept. 13 to be questioned by the attorneys.

2. The judge is PISSED that the audio of Guyger’s 911 call was leaked. According to the Dallas Morning News, State District Judge Tammy Kemp said she was “dismayed to find out the 911 call had been leaked to the media.” She said the person who released it “lacked the integrity and the fortitude to honor” the gag order that she issued on Jan. 8, which prevents attorneys and Guyger from speaking publicly about the case.

Prosecutor Jason Hermus and defense attorney Robert Rogers told Kemp that they had not leaked the recording and they still don’t know who did.

In the 911 call she made after shooting Jean, Guyger repeatedly told the dispatcher that she thought she had entered her apartment, not Jean’s, and that she was going to lose her job.

Guyger did get fired from her job on Sept. 24, about two weeks after she was arrested and charged with manslaughter in Jean’s death. Guyger had worked for the Dallas Police Department for nearly five years.

After two days of hearing evidence in late November, a Dallas County grand jury on Nov. 30 upgraded Guyger’s charge from manslaughter to murder. She turned herself in to authorities that afternoon and was released on $200,000 bond.

Her murder trial is expected to begin on Sept. 23.

The post Jury Selection In Amber Guyger Murder Trial to Begin Exactly One Year After She Killed PwC Accountant Botham Jean appeared first on Going Concern.

What’s with accountants stabbing people lately? First, we had the BDO Los Angeles guy who stabbed a hiker with a knife in California late last month. Now we have a KPMG Australia senior partner who used a corkscrew to stab a man putting up election campaign banners near a school.

A man who stabbed a Tony Abbott volunteer with a corkscrew as he was putting up campaign posters has been revealed as a senior partner at global tax firm KPMG.

Stavros Economides, also known as Steven, pleaded guilty to poking Jonathan Malota, 31, with the corkscrew after earlier threatening 18-year-old Rafe Harrison-Murray outside a Balgowlah Heights school.

Police say the 62-year-old confronted the men at about 8pm on May 17 and tore down posters the volunteers were putting up before running from the scene.

Here’s a video that was posted on Twitter allegedly showing Economides ripping down the campaign banners. NSFW due to language:

Unbelievable! One of our Liberal volunteer stabbed by zali supporter. @zalisteggall s ohotographer here too. How did she know to get here? #warringahvotes #auspol pic.twitter.com/PgkQGktMg1

— leefurlong (@leefurlong) May 17, 2019

Economides, who has worked at KPMG in Australia for nearly 40 years and a partner at the firm since 1987, according to his LinkedIn profile, was arrested within hours of the incident and charged with two counts of common assault, according to the Daily Mail.

He’s expected to be sentenced on July 4.

The man who was stabbed in the stomach was treated by paramedics at the scene and wasn’t hospitalized.

KPMG has yet to issue a statement regarding the senior partner’s attack and arrest.

Tony Abbott, who was Australia’s prime minister from 2013 to 2015, had served as a member of Parliament for Warringah since 1994. However, he lost the Sydney seat of Warringah to former Olympic skier Zali Steggall during the federal election on May 18, a day after Economides was arrested.

The post KPMG Australia Partner Pleaded Guilty to Stabbing a Dude with a Corkscrew Outside of a School appeared first on Going Concern.

My, time flies when you’re mired in the misery of sitting for the CPA exam, don’t it?

Today, NASBA received and processed an absolute shitton of scores from the AICPA, making this another CPA exam score release on time without a hiccup. Well, no, surely there’s some poor candidate in Wyoming or something who didn’t get her score on time, but all things considered, the year is chugging right along without issue. Makes you feel a bit more confident they’ll be able to pull off continuous testing within the year, eh? Er, maybe let’s not get ahead of ourselves.

On June 11, 2019, NASBA received and processed the following scores from the AICPA. pic.twitter.com/Bms3g4YoSv

— NASBA (@NASBA) June 11, 2019

There’s just one more score release left for this quarter and then I’m happy to say you guys are half done with the year. For some of you I’m sure this is a relief, for still others I imagine the concept of time not ticking but sprinting away is terrifying. Terrifying enough for you to stop procrastinating and get to testing? It will be Christmas before you know it and no one wants to schedule for the second week in December, come on now. Actually no, that’s not true, everyone who also procrastinated wants to schedule in December, so better get on that now while you can.

Here’s hoping for good news, and if not, hey, there’s always next time.

The post Here’s Your Open Thread For the Third CPA Exam Score Release of Q2 2019 appeared first on Going Concern.

Last week, the Australian Financial Review reported that a regulator’s inspections of a small risk-based sample of public company audits found that Deloitte’s audit quality was the worst of the Big 4 accounting firms, with 14 of 44 (32%) key audit areas examined having deficiencies. But instead of owning it, Deloitte played the blame game, particularly with the Australian Securities and Investments Commission. The firm said the ASIC’s inspection process is inaccurate, “not fit for purpose,” and too volatile.

Well, this week a representative of an investor advocacy group told AFR that instead of wasting time and energy complaining about the ASIC, Deloitte should put a little more effort into improving its audit quality.

Diana D’Ambra, a company director and the former chairman of the Australian Shareholders Association, told AFR:

“The purpose of the ASIC inspection regime is to promote high quality audits so current and future investors, lenders and shareholders can have confidence in published annual reports,” Ms D’Ambra said.

The regime was important to “ensuring all audits were done to the same high quality standard”.

AFR reported last week that audit inspection results were better at PwC, KPMG, and EY, with the ASIC finding problems with 12%, 21%, and 22% of audits, respectively, at the other three firms. We’d be plastering PwC with gold stars if it ever had an audit deficiency rate that low in a PCAOB inspection report.

D’Ambra went on to say the inspection results might highlight that clients were not willing to pay the amount required for auditors to do their work thoroughly. She also wants bad auditors publicly shamed:

“[The results raise] two questions in my mind – firstly are auditors put under excessive cost constraints by companies so they can’t do sufficient testing? Auditors are there to provide a level of assurance for investors – so we don’t want them cutting corners to save costs,” she said.

“Secondly, ASIC should make public which auditors and which audits don’t come up to scratch and how serious are such failings in audit work.”

There was one guy who came to Deloitte’s defense. Stephen Taylor, a professor of accounting at the University of Technology, Sydney, and a board member of the Australian Accounting Standards Board, said it “isn’t unreasonable to criticize the ASIC approach as selective and, by definition, focused on process rather than outcome” and “the ASIC inspection process is just one small part of the overall audit quality ‘picture’ and can be easily overstated.”

I bet investors would strongly disagree with Taylor on the importance of audit inspections. Studies in the U.S. have concluded that investors respond favorably to PCAOB inspection reports and investors view these reports as “value relevant,” and use them to make informed investment decisions. I’m sure investors in Australia feel the same about ASIC inspection reports.

But as we found out recently in a report from the International Forum of Independent Audit Regulators, audit quality continues to suck all over the world, and I doubt it’s going to get much better anytime soon.

Related article:

When It Comes to Audit Quality, Deloitte Is the KPMG U.S. of Australia

The post Deloitte Australia Told to Stop Bitching About Regulator and Do Better at Auditing appeared first on Going Concern.