Miscellany

Miscellany — interesting items that caught my eye during the week.

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Jonathan Weil shows why he is one of the premier journalists writing about accounting in, “Goldman Sachs Envy Gains New Meaning at Big Four.”  Weil shows several examples of the revolving door between the large accounting firms and their regulators on the PCAOB.  There are stinky conflicts of interest.

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Adam Jones, accountancy correspondent for the Financial Times, writes about new KPMG International chairman Michael Andrew in “KPMG vows to remain a multi-disciplinary firm.”  In this interview, Andrew ridicules all non-Big 4 accounting firms,

He also lashed out at a Commission proposal to force the Big Four to share some audits with smaller rivals. “Can you imagine a second-tier firm auditing a global bank at a time when there is already a lack of confidence in the marketplace?”

He added: “They simply don’t have the skills or the market expertise.”

He also accused some smaller rivals of being “quite lazy” about investing in their businesses.

Mr. Andrew is a jerk.  But Steve Martin was funnier at it.

Jones has another story on the issue, “Auditing has moved into the realms of sitcom.”  It’s worth a read.

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Stephanie Sammons, of Social Media Examiner, writes about, “5 Simple Steps for Improving Your LinkedIn Visibility.”  Read it.  Do it.

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Tom Selling is terrific when he writes about IFRS adoption issues, as he does in, “Will the SEC Sneak IFRS in Through the Back Door?”  Selling is sounding more pessimistic about how the nefarious SEC might sneak in IFRS, despite all reason and common sense (as well as almost every accountant and investor) being against it.

I have little faith.  The commissioners of the SEC are political appointees, and Mary Schapiro has been a willing accomplice to Obama administration policy.  She has her marching orders to install IFRS, and she is loyal to the hand that feeds her.

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Mark Schaefer of {Grow} has another post out on Klout, “Kould Kare Less.”

His Klout score is high, but he doesn’t care.  Mine isn’t, and I don’t care either.  Yet, many do.

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Debit and credit – – David Albrecht

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If U.S. Declaration of Independence Had Been Signed by Audit Firms

KPMG signature accompanying U.S. Department of Labor's audited financial report.

An audit firm must sign its opinion that accompanies a corporation’s financial statements.  An example of KPMG’s signature is shown at the right.  Of course, the signature applied will look different depending on which individual engagement partner actually signs it.  A Google image search on “KPMG signature” returned KPMG written by several different hands.

In “Shhh! Don’t Name That Auditor,” Floyd Norris of the New York Times blogs about the current controversy over such signatures.  Two and a half years ago, the PCAOB signaled its intention to have the audit firm engagement partner sign both the name of the firm and his/her name.  Beaten back, the PCAOB is now only proposing to require that the audit firm engagement partner’s name (sans signature) appear on the opinion.

Norris explains that the purpose of the proposed rule change is to help motivate the audit partner in charge to do a better job.  Audit firms are against this change, and Norris explains their rationale.

If getting audit firms to accept responsibility wasn’t so frustrating, the matter would be laughable.

Let’s go back to 1776 when the 13 U.S. colonies were in the process of declaring independence.  On July 2, the Continental Congress declared independence by a vote of 12 for, 0 against, and 1 abstention (later changed to yes).  Although nearly 50 delegates were present, the vote was by state.  On July 4, the document declaring independence was approved.  Starting on August 2, the delegates signed the declaration document.

As we all know, the delegates signed their names.  56 in total.

There were two to nine delegates per state, and the vote was by state.  Never-the-less, the delegates signed their individual names.  They took responsibility.

If an auditor has signed for New Jersey

If the delegates had signed in a manner similar to audit firms, there would have been only13 signatures, one for each of the original 13 colonies: Virginia, New Jersey, Pennsylvania, etc.

When will audit firm representatives accept some responsibility?

Debit and credit – – David Albrecht

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