Saturday, January 31, 2009
"In all cultures where Islam has become ascendant, the Muslim authorities have attempted to rewrite the history of the conquered lands to obliterate the memory of anything that went before Islam. By this method the cultural contribution of civilizations that preceeded Islam--during jahiliyah, 'the days of ignorance'--is minimized, denigrated, and distorted. The destruction of physical evidence is part of the revisionist task. To the average Western scholar, the Bamiyan Buddhas and the archeological artifacts buried in the ancient rubble under the Temple Mount are priceless treasures which muct be preserved, restored, studied, and admired. But to a Muslim they are abominations and must be destroyed. If not actual idolatry, they are evidence of non-Muslim civlizations that preceeded the introduction of Islam, and thus are an affront to the pride of the entire Ummah. It has recently been discovered that an exiled Iranian academic literally took a scalpel to valuable Persians history books in the British Library and the Bodelian Library, removing inconvenient and offensive text. His depredations have caused permanent and irrecoverable damage to the historiography of the periods involved. ... Leading scholars at the library are at a loss to explain why Farhand Hakimzadeh, a Havard-educated businessman and publisher, took a scalpel to the leaves of 150 books that have been in the nation's collection for centuries. ... The process is already underway as school textbooks are modified to apmplify the peaceful accomplishments of Islam and play down its violent expansionism, all the while denigrating European Christain civilization", my emphasis, Baron Bodissey, 17 January 2009 at http://gatesofvienna.blogspot.com/2009/01/historectomy.html.
Finally someone in the MSM discusses waqf and hudna. Once BS discusses takiwa, the "Big Three" words will be complete. No two-state solution can be reached between Israel and its neighbors. Why? Because Jordan exists, it will be at least a "three-state" solution. What is it we Westerners seem not to understand?
Whether it was in India, the West Bank or anywhere else, Islamic practice has been to destroy evidence of prior civilizations. There were 68 synagogues and cemetaries in the West Bank. Between 1948 and 1967 the Jordanians destroyed them all, digging up graves that were in some instances 2,500 years old. This intellectual dry rot has gone far in California where the State Board of Education gave Islamic groups veto power over what appears about Islam in state approved textbooks.
Don Feder expresses similar thoughts on 6 January 2009 at:
Friday, January 30, 2009
Thursday, January 29, 2009
"[SCSL], the Indian outsourcer embroiled in a fraud scandal, used forged documents from at least four major banks to claim a cash balance in excess of $1 billlion, according to a person close to the investigation. Investigators have sent Satyam's account-balance statements and letters of confirmation of account balances to officials at HSBC Holdings PLC of the U.K., Citigroup Inc. of the U.S., and HDFC Bank and ICICI Bank Ltd. of India. Based on the banks' reviews, investigators have determined that the documents were forgeries, according to the person close to the investigation. Spokesmen for all four banks declined to comment", Geeta Anand and Romit Guha at the WSJ, 20 January 2009.
"The disgraced former chairman of [SCSL], B. Ramalinga Raju, used salary payments to 13,000 fictitious employees to siphon millions of dollars from the Indian outsourcer for land purchases, prosecutors said Thursday. Prosecutors said ... Satyam has only about 40,000 employees instead of the 53,000 it claims. ... 'The funds of Satyam have been diverted to many other companies,' K. Ajay Kumar, assistant prosecutor, told a packed courtroom. ... S. Bharat Kumar, a defense lawyer for the Raju family ... said it would be impossible for anyone to juggle 13,000 fake employee accounts", EB and Nirag Sheth at the WSJ, 23 January 2009.
"Satyam's former chairman had ticked all of the boxes normally associated with good governance. He had stacked his board with luminaries including professors from Harvard Business School and the Indian School of Business. He chose as his auditor one of the 'Big Four' international accountancies, PWC", Joe Leahy and James Fontanella-Khan at the FT, 23 January 2009.
"Prosecutors pursuing the fraud at [SCSl] said Tuesday the technology outsourcer's founder, B. Ramalinga Raju, should be denied bail because he could slow the investigation if released. Their assertions came after an employee of a company managed by Mr. Raju's familiy told police that he had been instructed to hide documents connected to land purchases by the Raju family, according to prosecutors and a court document reviewed by the [WSJ]. ... Meanwhile, Satyan's government-sponsored board hired Goldman Sachs and Aventus Capital to advise on strategic options", EB and JR at the WSJ, 28 January 2009.
Gupta's point is well taken. In 2008: Infosys paid KPMG $695,000; Satyam paid PWC $1,919,000 in fees. Infosys is slightly larger than Satyam. Did Satyam pay PWC say $600,000 for the (shoddy) audit and $1,319,000 to close its eyes? The ICAI suit is interesting. About 20 years ago, a plaintiff named the AICPA in an accounting malpractice case, alleging the AICPA's defective auditing standards gave rise to the plaintiff's damage. The suit was not permitted to proceed. We'll see if India's courts are more plaintiff friendly than America's.
Wednesday, January 28, 2009
"The U.S. government, recognizing that the banking crisis is far larger than originally thought, is laying the groundwork for a second phse of its rescue attempt, with plans to purge assets that are paralyzing the financial system. Officials at the Treasury, [Fed] and the [FDIC], in consultation with the incoming Obama administration, are discussing a plan that would create a government bank that would buy up the bad investments and loans that are behind the huge losses that U.S. banks continue to report, say government officials. Another plan under discussion is an additional and giant government guarantee of banks' assets against further losses. ... The new government proposals are aimed at attracting private capital back to the banking system, efforts that have until now largely failed. ... Goldman Sachs economists estimate that financial insititutions and investors world-wide will ultimately realize $2 trillion in losses on bad U.S. loans, but have recognized only half those losses so far. ... Regulators say they worry that the only remaining source of capital for banks is the government. ... In the U.S., [Fed] officals are advocating aggressive action to take assets such as mortgage-backed securities off the balance sheets of financial firms. ... [Sheila] Bair said the assets could be purchased at fair value, the figure the banks use to value thier own assets. Such a move would remove the challenge of placing a price on assets that rarely trade. That would allow banks to avoid selling those assets for a low price, which would force them to take additonal write-offs", my emphasis, Deborah Solomon, John Hilsenrath and Damian Paletts (SH&P) at the WSJ, 17 January 2009.
Here we go again. Super MLEC returns in some guise or other. I disagree with Zimbabwe Ben and Kohn. It's more than time we let banks fail. All of them if need be. From "TBTF" Citibank on down.
Tuesday, January 27, 2009
"For his doctoral thesis at Columbia University in the 1980s, Vikram Pandit tackled a complex economic problem involving asset pricing. His academic advisers told him it would be impossible to unravel. They were right. He never solved the problem. ... Citigroup also is expected to detail the downsizing strategy aimed at dismantling pieces of the financial supermarket that Mr. Pandit repeatedly defended even as the credit crisis and recession overwhelmed his efforts to tackle problems haunting the company long before he arrived. Mr. Pandit hasn't said publicly what changed his mind. ... On Nov. 17, Mr. Pandit touted the company's prospects in an empoyeee meeting. That evening, he boarded a Citigroup jet for a one-day trip to Brazil. Some employees were surprised that he didn't cancel the trip. ... At a meeting in Sao Paulo, an employee asked Mr. Pandit whether the U.S. government might have to intervene to prevent Citigroup from unraveling. Mr. Pandit said no. ... The next day, Mr. Pandit held a conference call with about 3,000 executives. He lashed out at 'fear-mongering' by short-sellers and rivals. But he defended the company's health and structure. 'This is a fantastic business model,' Mr. Pandit said", my emphasis David Enrich at the WSJ, 16 January 2009.
"Sheila Bair, chairwoman of the [FDIC], recently tried to describe how this would work: 'The aggregator bank would buy the assets at fair value. But what does 'fair value' mean? In my example, Gothamgroup is insolvent because the $400 billion of toxic waste on its books is actually worth only $200 billion. The only way a government purchase of that toxic waste can make Gotham solvent again is if the government pays much more than private buyers are willing to offer. ... But should the government be in the business of declaring it knows better than the market what assets are worth? And is it really likely that paying 'fair value,' whatever that means, would be enought to make Gotham solvent again? What I suspect is that policy makers--possibly without realizing it--are gearing up to attempt a bait-and-switch: a policy that looks like the cleanup of the savings and loans, but in practice amounts to making huge gifts to bank shareholders at taxpayer expense, disguised as 'fair value' purchases of toxic assets.", my emphasis, Paul Krugman (PK) at the Houston Chronicle, 21 January 2009.
Pandit is either a criminal or a fool. Either way, he should be exited and told to return his $165 million "signing bonus". Citigroup's controller's office needs a thorough house cleaning. Pandit is right, Citigroup has a "fantastic business model" for him. It gave him $165 million for nothing. Is it possible, I an outsider, 2,000 miles from New York, knows more about what ails Citigroup than its CEO?
Uncle Sam would deceive the public? Say it ain't so, Joe. I go PK one better, why do we let the government declare it knows what interest rates are appropriate? Kill the Fed!
Does Schapiro think she is Linda Thomsen? And is Gary Lynch Mary Jo White in drag? See my 23 October 2008 post, link: http://skepticaltexascpa.blogspot.com/2008/10/who-is-stephen-cutler-2.html. This appointment stinks. Didn't the big Wall Street firms give Obama the majority of their money? Apparently the money was well spent. If Schapiro only "occasionally" went easy on big Wall Street firms, she would never have been nominated.
Monday, January 26, 2009
The dirty word "hyperinflation" finds its way into the MSM.
"Appellant Helig-Meyers Company and five of its wholly-owned subsidiaries appeal the decision by the [US] Bankruptcy Court [BC] for the Eastern District of Virginia that debtors were solvent on the date of the alleged preferential transfers to Wachovia Bank, N.A., and others (collectively 'the lenders'), as part of a financial restructuring on May 25, 2000. ... The debtors argue that the [BC] improperly applied the balance sheet test and relied upon an analysis of the creditor's expert on the mistaken belief that sich expert executed a balance sheet test of the debtor's solvency", In Re Helig-Meyers, 328 BR 471, 474 (ED Va., 2005). "The burden is on the trustee to prove the avoidability of a transfer under subsection (b); however, 'the debtor is presumed to have been insolvent on and during the 90 days immediately preceeding the date of the filing", 475. "The definition of insolvency nicely frames the issue. An insolvent debtor's financial condition is such that 'the sum of such entity's debts os greater than all of such entity's property at a fair valuation.' ... The qualification of 'a fair valuation' in the definition often requires that the judge sort through the differing presentations by the parties' valuation experts and to make factual findings. Not surprisingly in this case, the two valuation experts reached vastly different conclusions regarding the value of the debtors' assets. ... As a threshold matter, Judge Tice considered whether, on the date of the transfers, the debtors collectively operated as a going concern or were on their deathbed", my emphasis, 477. "A debtor lies on its deathbed where the debtor is 'in a precarious financial condition' so that 'liquidation was imminent when the petition was filed", 477. "As a going concern, the court applies the balance sheet test to measure the debtors' solvency. The balance sheet method 'contemplates a conversion of assets into cash during a reasonable period of time'," 477.
If HM is right, "the fallout ... could have been avoided", why does HM think the regulators "totally missed it"? Did they? Was the result intended? In reading this I conclude A&M and HM "cleared" reports before release. They both want to protect LEH's board and the counterparties. "Look what happened"! Yes, look! "Forced into bankruptcy", what nonsense. Either ZB, CC and HP did not anticipate what looks like the counterparities $50 billion gain, or they did. Is A&M preparing a smiliar AIG report at this minute? "Orderly unwinding"? Should HM come back, in his next life, he could make a fine offensive lineman, protect that quarterback! What does "cost the economy" mean? Which participants in the economy? "Counterparties ... are all financially exposed". Yes they were. Should they be dragged into federal district court? Well HM, how big are your cojones? Will you make enemies of every other Wall Street house to benefit LEH's unsecured creditors? If not, you should be replaced. I refer again to Switzer, my 18 December post: http://skepticaltexascpa.blogspot.com/2008/12/deprizio-doctrine-and-aig.html.
Look at some expert "advocacy". In about 1971, McKinsey, the big consulting firm, disgraced itself, in my opinion, by writing Pan American's plea for government subsidies. In about 1999, KPMG wrote a report economically "justifying" subsidies for a Hartford, Connecticut sports stadium. Forensic experts produce junk to attempt to mislead juries into convicting defendants with forensic evidence, my 8 June 2008 post: http://skepticaltexascpa.blogspot.com/2008/06/expert-monopolies.html. No matter how much expertise A&M supposedly has, we don't know why it wrote what it did. No document reveals the circumstances of its preparation, my 7 February 2008 post, link: http://skepticaltexascpa.blogspot.com/2008/02/why-dont-we-learn-from-history.html.
A significant similarity between LEH and AIG is: the derivatives counterparties were protected. HP, ZB and CC seem to have their answer to "Carthago delenda est", i.e., "The counterparties will be protected".
What Judge Tice did at Helig cannot be done for AIG lest someone conclude AIG was insolvent months ago and that liquidation, not going concern valuation was appropriate.
Sunday, January 25, 2009
When will these conditions come to the US? California first!
Saturday, January 24, 2009
"Mike Reilly spent his entire lifetime chasing the California dream. This year he's going to look for it in Colorado. With a house purchase near Denver in the works, the 38-year-old engineering contractor plans to move his family 1,200 miles away from his home state's lemon groves, sunshine and beaches. For him, years of rising taxes, dead-end schools, unchecked illegal immigration and clogged traffic have robbed the Golden State of its allure. Is there something left of the California dream? 'If you are a Hollywood actor,' Reilly says, 'but not for us.' ... But for many California families last year, tomorrow started somewhere else. The number of people leaving California for another state outstripped the number moving in for another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period--more than any other state, according to census estimates. ... Why are so many looking for an exit?", 12 January 2009, link: http://www.msnbc.com/id/28625138.
"In 2004, FAIR published a study estimating California's annual cost for illegal immigration at $9 billion, an amount which surely has not decreased in the intervening time. But the goodies for illegal aliens are not being cut, even as basic services are being axed for citizens. The presence of millions of illegal aliens--many of whom are uneducated, unskilled and non-English speaking--is not the only cause of California's budget crisis, but it is a significant part. ... Schwarzenegger called it a 'big mistake' Wednesday to blame illegal immigrants for the state's looming $8 billion budget gap [in August], just as Republican lawmakers have proposed a rollback of benefits for illegal immigrants to save money", Brenda Walker, 18 January 2009 at http://vdare.com/archieves/2009/01/18/californa-budget-meltdown-staggers-along/
DN is a Congressman from California. He can't say, "The exodus is largely a response to the Mexodus".
Illegal aliens' UCLA and Berkeley tuition is less than foreigners, i.e., Arizona and Nevada kids! If illegal aliens attend UCLA, why doesn't the (in)Justice Department raid UCLA's registrars office, identify, and deport them? Then find a charge to arrest UCLA's adminstrators on. Californians follow Lenin's dictum, they are "voting with their feet". I'm sure this makes Paul Krugman cringe. "Balkanized tribal areas", see my 6 September 2008 post: http://skepticaltexascpa.blogspot.com/2008/09/coming-civil-war.html. The majority of LA County (LAC) residents speak a language other than English at home. The LAT reported 53% of LAC residents are functionally illiterate. What country is LAC in anyway? Robert Putnam is a Harvard professor. I'm surprised he hasn't been driven off that campus. Totally free medical care. Is that making California hospitals close? "Tough measures"? My fix: let California issue its own money then hyperinflate it out of existence! "Cross-communal plundering", I love it! See also gm's comments at my 4 January 2009 post: http://skepticaltexascpa.blogspot.com/2009/01/backlash-afoot.html. California is a witches' brew of troubles.
Because it's too expensive to live there and large parts of California are no longer part of the US.
Is the Guvernator serious? What is California's annual illegal alien and anchor baby cost? 60,000 prison inmates @ $36,000 each or $2.1 billion; 530,000 LAUSD students @ $13,000 each or $6.9 billion, 5.5 million people getting medical care @ $1,500 each or $8.2 billion; that's $17.2 billion already. Either the illegal aliens and their progeny will be denied services at the barrel of a gun, or the Franchise Tax Board will take Californian's property at the barrel of a gun. The question is: who will the gun be aimed at? This reminds me of something Hitler's propaganda minister Joseph Goebbels said, "The most important weapon of war is propaganda. Why? Any idiot can be taught to carry a rifle. But it is the proper administration of propaganda which determines the direction in which he points it".
Friday, January 23, 2009
Thursday, January 22, 2009
Wednesday, January 21, 2009
Tuesday, January 20, 2009
I agree with Higgs. If you like bananas, eat your fill, now!
Monday, January 19, 2009
"[PWC], the long-standing auditor of stricken software company Satyam, faces the prospect of disciplinary action by market regulator SEBI if it is found that it failed to verify the autheticity of financial documents furnished by the company. ... Independent auditors feel the regulator's approach may be too harsh. Officials at audit firms say that if they start verufying the veracity of all documents given to them, would become a full-fledged investigation into the company. ... 'How can we verify the authenticity of millions of pages while auditing a company with a turnover of thousands of crores in a few days?' said an auditor working with one of the big four accounting firms, who asked not to be named. Auditors certify that the financial statement reflect a "true and fair" picture of the state of affairs of the company, and not an accurate picture", he added. The SEBI official, however, rubbished this argument", my emphasis, Junior, 8 January 2009 at http://jraccountant.blogspot.com/2009/01/pwc-epic-indian-failure.html.
"Debate in Mumbai is now focusing on whether Satyam, India's fourth-largest computer software company, or its multinational auditors [PWC], was more to blame for what is possibly corporate India's worst scandal. ... Contrary to perceptions that this is a brand new financial scandal, the Satyam fraud appears to be the latest variant of financial scams involving manipulating information with the aim of duping investors, while involving regulatory and accounting practices not traditionally used in India. ... The general verdict of accountants in Mumbai is that Satyam's auditors blew it big time, whatever fraud and forgery the management could have produced to hoodwink them in a scandal that is estimated to have cost Satyam investors $2 billion on January 7 alone as the stock plunged by 77% on news of the fraud. ... PWC, formed in 1998 through the merger of Price Waterhouse and Coopers & Lybrand of London, faces a choice of either being found so utterly incompetent that it could not spot a $1.5 billion-sized accounting crater, or that it was party to the investor fraud that presented an annual 24% growth rate in Satyam balance sheets instead of an actual 3% growth rate. ... In other words, Satyam auditors have not apparently undertaken what traditionallly would have been the minimum independent verification of the client's accounts as a chartered accountant firm is supposed to do", Raja Murthy, 9 January 209 at http://www.atimes.com/.
"[PWC] , which signed off on [SCSL] finances for several years without detecting the fraud by Satyam's founder and chairman, defended its procedures on Thursday. [PWC] said, in a statement send by email, 'The audits were conducted by [PWC] in accordance with applicable auditing atandards and were supported by appropriate audit evidence.' It said it is cooperating with regulators. ... A [PWC] spokesman declined further comment. Srinivas Talluri, the [PWC] partner who signed off on Satyam's most recent annual accounts in Hyderabad in April last year, couldn't be reached. ... Also in his letter, Mr. Raju said the company's cash and bank balances had been inflated by more than $1 billion dollars. 'This is the easiest thing to verify,' said Vinesh Chandok, national managing partner of accountant Grant Thornton", JR and Scott Patterson at the WSJ, 9 January 2009.
"Indian authorities moved to contain the fallout from the fraud at [SCSL] by arresting the company's founder, firing its remaining board members and launching an accounting review of India's biggest publicly traded companies. ... In an unprecedented action, the government also said it will install directors on a new 10-member Satyam board that will meet within one week. A board meeting that had been scheduled for Saturday was canceled. ... The Securities and Exchange Board of India [SEBI], the chief markets regulator, said Friday it will review auditors' working papers relating to companies in the Sensex and the National Stock Exchange 50-share index in a bid to boost investor confidence in financial disclosures. ... C.B. Bhave, SEBI's chairman ... said recent results for big companies would be subject to peer review by another auditor; other company results will be subject to peer review by accounting firms on a random basis", Eric Bellman and John Kumar at the WSJ, 10 January 2009.
"If this scandal proves anything to transnational investors and corporations it would be that doing business in India may be less risky than doing so in the more criminal friendly USA. India is demonstrating that it has very little tolerance for white collar fraud and they are showing that corporate criminals will be swifly punished. It is yet to be seen if most of those arrested will bribe themselves out of trouble but so far the punishment is more severe than aything we see in the U.S. In contrast to India, the U.S. coddles its corporate criminals by allowing them to stay on the job with big pay raises, or giving them golden parachutes so that they can retire in the Bahamas", Rob Sanchez, 12 January 2009 at http://blog.vdare.com/achieves/2009/01/12/satyam-scandal-wont-change-anything/
"Suresh Senapathy, the chief financial officer of Satyam rival Wipro (WIT) said it was 'impossible to imagine that this could happen. I can't believe that five or six years' worth of misappropriated books and accounts missed the scrutiny of auditors'," Elliot Wilson at Barron's, 12 January 2009.
"The board at troubled [SCSL], freshly appointed by the Indian government, said it is looking for a new auditor. ... 'New independent accountants that we appoint shortly will restate the numbers and confirm the veracity of those numbers,' [Deepak] Parekh told a news conference in Hyderabad following the first meeting of the government-appointed board", Eric Bellman and JR at the WSJ, 13 January 2009.
"Indian regulators and police are trying to unravel how the chairman of [SCSL], who has admitted to falsifying corporate figures, may have managed for years to fool his top financial officer and the company's audit committee. ... Satyam's chief financial officer, Srinivas Vadlamani, was arrested over the weekend on suspicion that he was involved with fraud, forgery and other charges. In a written statement, presented in the local courts Sunday, Mr. Vadlamani said that while he wasn't directly involved in fudging the company's accounts, he knew that there was something suspicious for more than five years. The statement didn't say why he didn't report the suspicions. He said he wasn't in charge of keeping track of the company's deposits. 'I was specifically asked not to look into that area of operations,' Mr. Vadlamani said in the statement. ... Mr. Vadlamani didn't admit to any crime in the statement. ... Sandeep Parekh, a professor at the Indian Institute of Management in Ahmedabad ... said another clue came when an analyst from Mumbai-based securities firm Kotak Securities Ltd. [KSL] raised questions about why the company was keeping such large amounts of money interest-free current accounts rather than a 9% fixed deposit with a bank. Kawaljeet Saluja, a senior research analyst with the institutional equities arm of [KSL], raised the question during an investor call with Satyam in April, a [KSL] spokeswoman said", my emphasis, Eric Bellman and JR at the WSJ, 14 January 2009.
"[SCSL] began a search Wednesday for a new chief executive and new chief financial officer, while the software exporter's board named Deloitte Touche Tohmatsu and KPMG as interim auditors to assess the company's financial health. ... The new board had said Monday it would name new auditors to assess the true financial condition of Satyam, based in Hyderabad, India. Satyam is India's fourth-largest software exporter by revenue. ... In a separate statement Wednesday, [PWC] said its audit opinion on the financial statements of the software exporter may be rendered inaccurate and unreliable. ... 'We placed reliance on management controls over financial reporting and the information and explanations provided by management and also the verbal and written representations made to us during the course of our audits,' the firm said", Romit Guha at the WSJ, 15 January 2009.
"Minutes from a crucial December board meeting at [SCSL] shed light on how the giant outsourcer's directors would up approving two deals that were a key part of the massive fraud that has since engulfed the company. ... The deals at issue were the acquisition by Satyam of two infrastructure companies--Maytas Properties Ltd. and Maytas Infra Ltd.--that are run by the sones of the founder and then-chairman of Satyam, B. Ramalinga Raju. Mr. Raju also had a financial interest in the companies. ... In a prepared statement, Ernst & Young said it had prepared the valuation for another purpose and was 'not given to understand by any party, explicitly or implicitly, during the valuation exercise, about Satyam's plans to acquire Maytas Properties.' ... 'The proposed acquisitions have two complicated aspects--unrelated diversification, and realted party transcation,' said Krishna Palepu, a Satyam director and a Harvard Business School professor of corporate governance,who participated in the meeting by telephone conference, according to the minutes", Niraj Sheth and JR at the WSJ, 16 January 2009.
Shut the World Bank.
This is too rich, a Big 87654 Indian Chartered Accountant doesn't think his clients financials need be stated accurately. He exposes a dirty secret of the CPA business, i.e., given the Big 87654's time constraints, many times they can't finish the work. It would take something lacking in Big 87654 partners to tell the SEC we can't finish audits when you want, a backbone. The damn SEC keep moving up SEC registrant filing deadlines. That's crazy. Indians use crores, 10 million and lakhs, 100,000 as counting units. 10 million rupees is $208,000 at R48.1 = $1.
I can't believe it either.
We'll see if the new auditors conclude PWC's audit was deficient.