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The Competition Commission, a UK regulator, has issued a report today that said the Big Four firms, which do accounting and auditing services for 90 percent of blue chip companies in the UK, lacked adequate competition, which has translated into higher prices, lower quality and less innovation, according to the
On Nov. 30, 2012, Judge Colleen McMahon of the U.S. Federal District Court for the Southern District of New York held in Pippins v. KPMG that the accounting firm's audit associates were exempt as "learned professionals" under the Fair Labor Standards Act (FLSA) and thus not entitled to overtime pay.
In a Dec. 3 release, the SEC began administrative proceedings against the China affiliates of each of the "Big Four" accounting firms and another large U.S. accounting firm. The SEC alleges these firms have refused to produce audit work papers and other documents related to China-based companies the SEC is investigating.
In a case with wide implications for the accounting profession, the N.J. Supreme Court has set limits on auditor lawsuits and explored the nature of privity.
Top officials of Japanese corporation Olympus, which makes cameras and medical supplies, admitted that the company had been using acquisitions to hide decades of losses that date back to the 1990s, according to NPR, with president Shuichi Takayama, who took over in late October, saying in a statement that the company had “conducted extremely improper accounting.”
The Commodity Futures Trading Commission (CFTC) has subpoenaed PricewaterhouseCoopers, the auditors for troubled financial firm MF Global, for information on the segregation of clients' assets from the firm’s, in light of the roughly $633 million allegedly missing from customer accounts when the company filed the eighth largest bankruptcy in U.S. history on Oct.
Saying that the current market for large company audits lacks sufficient competition, Britain's Office of Fair Trading has launched an investigation of the Big Four audit companies, which last year collectively earned 99 percent of the audit fees paid by FTSE-100 companies, according to the Associated Press.
Wachovia Corp. auditor KPMG will shell out $37 million to help settle a federal class action lawsuit brought by investors in New York, reported Reuters. The suit alleges that Well Fargo Co. subsidiary Wachovia was intentionally less than transparent about the viability of certain home loans it sold before the financial crisis, said Reuters.
The Public Company Accounting Oversight Board (PCAOB) announced on Aug. 1 that it has come to a settlement agreement regarding a disciplinary matter involving a former Ernst and Young partner and manager, whom the PCAOB said provided misleading documents and information to PCAOB inspectors and altered working papers.
India-based Satyam Computer Services Ltd. and its former auditors -- all Indian affiliates of the U.S. auditing firm PricewaterhouseCoopers (PwC) -- settled with U.S. regulators on Tuesday for a combined $17.5 million to resolve the probe into what became known as “India’s Enron,” reported Reuters.
Stay on top of Society news and the key legislative, regulatory and administrative issues that affect you with the Feb. 15 issue of The Trusted Professional.
Victims of disgraced financier Bernie Madoff’s multi-billion dollar Ponzi scheme are suing the U.K. branch of Big 4 accounting firm KPMG, alleging that auditors for the jailed billionaire’s financial operations failed to notice or ignored ample evidence of financial misconduct, making them, according to the complaint, the “primary players responsible for the fraud.”
The lengthy relationship between embattled H&R Block and McGladrey & Pullen, the fifth largest accounting firm in the New York area, has soured. The latter has issued formal notice of intent to terminate its contract with H&R Block. While McGladrey & Pullen’s audit practice is an independent, partner-owned firm, related professional services have been offered through RSM McGladrey under an agreement with H&R Block.
Big Four firm KPMG is being sued over its audits of New Century Financial Corp. by the trustee overseeing the bankruptcy of the subprime lender, in one of the first examples of an auditor being blamed for the subprime mortgage crisis.
This follows last April's independent report solicited by the United States Department of Justice that said KPMG may be liable for allowing New Century to engage “in a number of significant improper and imprudent practices related to its loan originations, operations and financial reporting."
The Indian government has superseded the board of Satyam Computer Services, the outsourcing giant that announced this week that its chairman had concealed $1 billion in losses. It will appoint 10 nominee-directors, who will meet within a week and make a decision on a new management team for the company, whose name means "truth" or "this is true" in Sanskrit.
The Big Four firm PricewaterhouseCoopers is now under fire for signing off on Satyam's financial statements for several years. In a statement sent by email, the auditing firm defended itself: "The audits were conducted by Pricewaterhouse in accordance with applicable auditing standards and were supported by appropriate audit evidence."
A federal jury on Wednesday found Robert Pfaff and John Larson, two former employees at the accounting firm KPMG, and a former top tax lawyer, Raymond J. Ruble, guilty in a tax-shelter trial once billed as the largest ever. A third former KPMG partner, David Greenberg, was acquitted of the charges, the New York Times reported.