Some books AB's written: Unaccountable Accounting, 1972; More Debits Than Credits, 1976 and The Truth About Corporate Accounting, 1981. There is nothing new here.
Friday, July 3, 2009
Big 87654 Fraternity
Francine McKenna has a 17 March 2009 post at her re: the Auditors, which is very critical of the Big 87654. Some choice quotes: "And the largest global public accounting firms--KPMG, [PWC], Deloitte and Ernst & Young--again failed to prevent, warn, or mitigate the desperate financial situation, the national crisis of significant proportions we now find ourselves in. ... They're getting a free pass. ... They recruit and promote less like a business, based on merit, and more like a secret society or fraternity. ... There's a type of Big 4 omerta, the extreme form of loyalty and solidarity in the face of authority usually attributed to the Mafia. Once initiated into firm culture, survival requires adoption of this informal oath of allegiance that makes it shameful to betray even one's deadliest enemy, your competitors, to legal and regulatory authorities. ... Violence is the only thing left that the firms haven't depended on to accomplish their goals. ... Controlling and making money from all sides of a transaction is another potential sign of a criminal organization at work", http://www.huffingtonpost.com/francine-mckenna/the-button-down-mafia-how_b_174496.html.
This is how it is. When I was with the Big 87654 we called the road to partnership, "The dance of the sychophants". One partner in my office, who was on the "outs" with the others and biding his time to retirement, complained of the firm's childish, "fraternity-like" atmosphere. The Big 87654 have many conflicts of interest. So? The PCAOB is full of "former" Big 87654 partners. Did the PCAOB publicly demand say Citigroup recall all its financials for the past five years? Did it try to tar and feather the responsible KPMG partners? If not, why not? Good job Francine. Try to hire a Big 87654 firm to testify against another in an accounting malpractice case. Good luck. Francine, how do you know no Big 87654 firm ever resorted to violence to shut up a critic? The closet I know of is the Abe Briloff, 1917- (AB) peer review fiasco of about 15 years ago. AB is a Baruch College professor in New York. He also had a small CPA firm. His NY State Society "peer review", whatever that is, failed his firm. There was an ensuing hubub and the peer reviewers backed down. For my money, the peer review authorities have as much integrity as Mike Nifong of "Duke Three" fame, i.e., none at all.