Friday Footnotes: KPMG Discipline Looms; Whistleblower Gets 2nd Chance; Firing Auditors | 12.17.21
Deloitte U.S. CEO on the past year’s business challenges and what’s ahead in 2022 [Fortune] “Many came into the year thinking that 2020 was the unprecedented year and things would calm down,” Ucuzoglu said. “Yet you could argue there have actually been more twists and turns [in 2021]. The pandemic is by no means behind us, yet, in spite of all of that, we’ve got a reasonably strong economic recovery underway. We have remarkable tools at our disposal to manage the ongoing pandemic. All of that leaves me relatively bullish.”
KPMG disciplinary date set over misconduct complaint involving Carillion, Regenersis audits [Financial News] A disciplinary hearing has been set for KPMG and some of its former and current staff over allegations they provided false or misleading information to the accounting watchdog for inspections of Carillion and Regenersis. The Financial Reporting Council said it will hold the hearing on 10 January to consider the complaint against the Big Four firm.
Accounting firm pays Jackson County millions over failed Singing River pension plan [SunHerald] KPMG accounting firm will pay a $20 million settlement to Jackson County over the failed pension plan at county-owned Singing River Health System, a news release says. The county netted $16 million after attorney’s fees from the settlement. The money has been placed in an interest-bearing account, Chancery Clerk Josh Eldridge said. The Jackson County Board of Supervisors has not yet decided what the funds will be used for, he said.
KPMG withdraws from bidding for UK government contracts after scandals [Financial Times] The Big Four firm, the third-biggest winner of public sector consulting contracts by value in the financial year to March 2021, has halted bidding for new assignments pending the outcome of a Cabinet Office review. It caps a chaotic year for KPMG UK, in which its chair quit after telling staff to “stop moaning” about their work conditions during the pandemic and the accounting regulator branded the quality of the firm’s banking audits “unacceptable”.
Great news for whistleblower Mauro Botta [The Dig] RSM US LLP has given Botta a second chance as a Senior Director in its National Office after he went through hell for blowing the whistle on PwC to the SEC, after getting no satisfaction making internal complaints.
When Companies Fire Their Auditors, Timing Is Clue to Future Trouble [Wall Street Journal] When a company and its auditor split up, it can be a sign of trouble in the books. But the two sides typically don’t give a reason for the breakup. Two accounting professors instead looked at the timing of the split. They found that the later in the year it occurs, the more worried investors should be.
PCAOB Says It Can’t Inspect Audits of Chinese Firms Listed in U.S. [New York Times] An American accounting board has started what could prove to be a three-year clock for the delisting of many Chinese companies traded on American stock exchanges, in a move involving audit standards that are at the center of a squabble between Beijing and Washington. The Public Company Accounting Oversight Board said late Thursday that it had been unable to fully inspect the audit papers and other documents of accounting firms in mainland China and Hong Kong. The Securities and Exchange Commission has the power to delist companies that lack fully approved overseas audits for three years.
Deloitte wins big auditor work from rival firms [Australian Financial Review] Deloitte will become the corporate auditor for listed companies Booktopia and concrete and quarries group Boral after winning the work from its big four rivals. The shift follows other listed companies changing their auditor as the year draws to a close, including KPMG winning the audit work for electronic design software company Altium and PwC winning the Bank of Queensland audit.
AICPA Legacy Scholarship application period is open [This Way to CPA] Become an AICPA Legacy Scholar by applying for an AICPA Legacy Scholarship. If chosen, you’ll be given funds to help pay for college and be offered exclusive professional development opportunities.
Attributes of top-performing firms revealed [Journal of Accountancy] Double the revenue per partner. Double the profit per partner. Double the compensation per partner. Those are three of the revelations about how top-performing accounting firms compare with their peers, as measured by the 2021 National Management of an Accounting Practice (MAP) survey from the AICPA Private Companies Practice Section (PCPS).
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