Arthur Andersen

ALSO NOTED: Tainted CFOs suffer in post-Sarbox world; After 6-year probe, AOL execs charged;

Tue, 27 May 2008 06:59:58 -0400

> Tainted CFOs suffer in post-Sarbox world. Article
> Ex-CFO spared penalty due to financial woes. Article
> After 6-year probe, AOL execs charged. Article
> Backdating case: SEC charges Broadcom. Article
> Arthur Andersen, dead for six years, is sued. Article
> New group joins exec pay debate. Article
> CFOs back separating CEO, chairman jobs. Article
> Small businesses need to wake up data backup imperative. Article
> Where is the S (for security) in GRC? Article
> Archiving company, Mimosa, gets VC funds. Article

And finally ... Here are some best practices tips for using Excel. Article

KPMG liable for mortgage lender implosion

Tue, 01 Apr 2008 07:59:59 -0400

Once again, we can ask: Wasn't Sarbanes-Oxley supposed to prevent this? Mortgage fraud has been front-page news. A 581-page report by a bankruptcy court examiner has found that New Century--a subprime leader--did a lot of shady stuff. The bombshell is that the report found that auditor KPMG enabled these practices, and thus should be held accountable. The New York Times raises the spectre of Enron and Arthur Andersen. KPMG denies the allegations. There is a big inside story here. Apparently, there were some emails from the KPMG partner suggesting the client was really playing hardball. But at some point, the auditor has to stand up. We'll likely hear more soon.

For more:
- here's the New York Times article
- more on auditors caving in

Related Articles:
Analysis slams Bear Stearns' subprime activity. Article
Some hedge funds hit by subprime meltdown. Article

ALSO NOTED: Ernst & Young has avoided an Arthur Andersen-like fiasco; Cox to AG: what would happen to XBRL?;

Mon, 04 Jun 2007 20:01:38 -0400

> For the moment, Ernst & Young has avoided an Arthur Andersen-like fiasco. Four current and former employees have been charged with tax fraud conspiracy over their work on dubious shelters. But the firm was not charged. Article

> There have been sporadic rumors that SEC Chairman Chris Cox might become the next attorney general. Doesn't look like it will come true. If it did, some people fear that the movement toward XBRL will be derailed. Article

> One CFO wonders: Is Sarbox the only reason audit costs have soared. Article

> Small businesses not yet giving up on another 404 deadline extension. Article

> People with IT security certifications are seeing their salaries rise a bit. Article

> Intensity of security law enforcement is tops in the U.S. Article

> Vista adoption being driven by security concerns. Article

> Here's a primer on Sarbox issues for CPAs. Article

And finally ... Should the feds adopt accrual accounting. Article

Sarbanes-Oxley gives rise to new accounting service providers

Mon, 21 May 2007 20:01:39 -0400

Recall that Sarbanes-Oxley banned accounting firms from providing consulting services to their audit clients--for good reason. That gave rise to a new group of service providers. The need to handle risk assessments, tax-related consulting and IT-related work, among other things. One firm that has distinguished itself is Smart Business Advisory, based in the Philadelphia area. Great Hill Partners, a private equity firm, just sunk $60 billion into the business, which is in hyper growth mode. There are a host of competitors. Huron Consulting Group, which was formed by refugees from Arthur Andersen. Navigant Consulting, Protiviti, a unit of recruiter Robert Half International, and FTI Consulting. Most of the established companies are looking to expand by acquisition. We'll likely see some roll-ups emerge soon enough.

For more:
- here's an article from the Philadelphia Inquirer

But it was supposed to be a good PR move

Mon, 26 Feb 2007 19:01:39 -0500

For most of the past 72 years, the fact that PricewaterhouseCoopers has been validating the Academy Awards voting has been a good PR move. A great way to get a brand out there--almost like a major gold event sponsorship. In the Sarbox era, however, that is no longer true. Slate magazine has used the occasion to deliver a not-so-great profile of the firm. It notes that PwC is no Arthur Andersen. But it has had some missteps, noting its work for Tyco, Lucent and Bristol-Myers Squibb. The article also notes that the PCAOB has found deficiencies, including "failures by (PwC) to perform, or to perform sufficiently, certain necessary audit procedures." In some cases the deficiencies "were of such significance that it appeared to the inspection team that (PwC) had not obtained sufficient competent evidential matter to support its opinion on the issuer's financial statements." Well, there are going to be bad days. All that said, there has never been a breach in PwC's long history with Oscar. Let's hope the record survives.

For more:
- here's the article

Accountants aim to repair Sarbox-related image

Mon, 05 Feb 2007 19:01:39 -0500

For the accounting firms, the Sarbanes-Oxley era has been one in which their professional image has suffered some huge PR blows. They were once seen as impartial, bean-counters making sure that a company's finances were up to par. Then came Enron and all the other scandals--including the Arthur Andersen fiasco--and all of sudden the bean-counters were stereotyped as criminals. The industry is out to change that. The Center for Audit Quality was launched last week by the AICPA and BDO Seidman, Crowe Chizek, Deloitte & Touche, Ernst & Young, Grant Thornton, KPMG, McGladrey & Pullen, and PricewaterhouseCoopers. It's goal is to foster confidence in the audit function. We'll see what steps they take, especially in regards to public perception of Sarbox issues. They'll be promoting a lot of other trade group-like stuff as well.

For more:
- here's an article from CFO.com

Related Articles:
Do accountants need liability protection? Report
Accounting errors persist, tiny companies in hot seat. Report

Lawyers emerge unscathed from regulatory changes

Mon, 04 Sep 2006 20:01:39 -0400

You could argue that the accounting profession has been strengthened immeasurably by Sarbanes Oxley. It didn't always look that way though, not after Arthur Andersen was put out of business and KPMG was humiliated and not after the industry was forced to bow to federal oversight. In this light, you have to wonder about the lawyers. They also handed out some dubious advice and many argue that they should have borne more responsibility for the corporate travails. There are some signs that lawyers will be forced to endure a harsher spotlight. But for the most part, it's just business as usual.

For more on the culpability of corporate lawyers:
- Here's a Washington Post article

Options grants backdating probe takes a new turn

Mon, 12 Jun 2006 20:01:35 -0400

The unrolling scandal involving backdating--or spring-loading--of options granted to executives has veered, somewhat predictably, towards the auditors. Apparently, the SEC and others are taking a look at the Big Four and what they knew about a practice that has put about 30 companies under investigation. This is not necessarily a new tack. Recall that in the case of software maker Peregrine, the agency alleged that its auditor, Arthur Andersen, knew about the practice. Overall, this is turning into a huge compliance issue for many firms. This is bad news for the auditors of course. Now is the time for caution when it comes to grants.

> Here's an article.
> The SEC may require disclosure of options grant backdating. Article
> Here's an update on the unfolding drama.