As mentioned in the previous column, Ed is stepping down from the blogging scene, while Tony continues to fight the good fight. He has posted his first essay on the new blog site, and we invite you to read it: “H-P Throws Its Accountants Under the Bus! But Why?”
Long live Grumpy Old Accountants!
This essay reflects the opinion of the authors and not necessarily the opinions of The Pennsylvania State University, The American College, or Villanova University.
Ed has become really grumpy lately! Is it the classes, the research, or just that the thrill of accounting is too much for someone who has crossed the threshold of geezerdom? The answer is “all of the above,” plus the fact that weekly blogging is a lot of work for someone entering his “golden years.” So, Ed has decided to retire from the Grumpy Old Accountants blog. Yes, the Statler and Waldorf of the accounting blogosphere are parting ways (at least temporarily). And, oh by the way, Ed is Waldorf, since he looks older and actually started the blog! The Grumpies want to share some final thoughts about this phase of our efforts to improve the accounting profession. Continue reading »
This year we have been outspoken critics of the Big Four’s auditing “prowess.” See “The Auditor’s Expectations GAP…Not Again! Excuses, Excuses, Excuses!” and “Who Really Cares About Auditor Rotation? Not Us!” Each of these commentaries implicitly, if not explicitly, called on these firms to make substantive, meaningful changes to their audit models so that they might once again fulfill their oversight responsibilities to the investing public. Instead, according to David Ingram and Dena Aubin at Reuters, the Big Four continue to channel resources into lobbying efforts presumably to maintain the status quo, rather than reengineering the defective service that they label an “audit,” which they continue to peddle with the tacit approval and blessing of the SEC. Continue reading »
The case against three former executives at Nortel is coming to an end. Their actions have been characterized as a “fraud on the public” by the Canadian prosecutors during their closing statements. These managers at Nortel Networks Corporation allegedly used accounting tricks to buoy quarterly profits and activate various bonuses for themselves. Linda Nguen quotes prosecutors as saying, “You cannot just monkey with the accounting.” Continue reading »
The 2008 financial crisis was brought about by bank managers who finagled various transactions, primarily in the mortgage markets or the market for their securitizations, and obfuscated with accounting cover-ups and opaque disclosures. Our governments have prosecuted very few of the criminals and have meted out fines at a fraction of the amounts that managers fraudulently. Furthermore, as Jonathan Weil recently pointed out in his article titled “When Will the SEC Finally Go After Auditors?”, our governments have not brought a single action against an auditor for their involvement in the financial crisis. What has happened to our institutions? Is justice dead in America? Does the current administration care, or is it just incompetent? Continue reading »