Risk management is,
for better or worse, a constant business challenge. As examples, I’ve given recent
attention to the timing mis-alignment between senior-level compensation and
litigation exposure – here – and the perils of failing to assure a long-term
plan for business sustainability – here.
How about a major unmanaged public health [...]
Reader reaction indicates that I touched a sensitive subject, when I suggested on November 10 – here – that there was a mis-alignment in the compensation models of the large accounting firms, who distribute immediate profits to their current partners while the potentially devastating impact of related litigation takes years to befall the succeeding [...]
In my first job in journalism, back on a small-town newspaper, the last critical deadline risk was a break-down of our creaky old press. Now it's that the elves of the internet somehow got Monday's post out via Twitter and my news groups, but failed to feed it to e-mail [...]
What’s in store for reporting on internal controls under the Sarbanes-Oxley law? The most important Washington development was not last week’s legislative merry-go-round over possible small-company exemption.
As discussed here, the SEC had earlier pushed back its deadline under Section 404(b) for auditor reports. Impelled by White House Chief of Staff Raum Emanuel, the House [...]
What’s to be made of the US Securities and Exchange Commission’s grant, on October 2, of yet another extension of its deadline for small companies to have reports on their internal controls by their independent auditors? (See Edith Orenstein’s FEI Blog – here and here.)
As the autumnal season for influenza raises alarmist [...]
Lost, trapped and at risk of a serious crash.
That could very well describe the participants in the financial markets turmoil of the last two years. Instead it was my experience last Saturday afternoon – as an anxious and helpless rear-seat passenger during a frustrating hour fighting the exit traffic after a major college football game.
Autumn [...]
The fall speeds on, and the calendar is packed. I am looking forward with enthusiasm to being at Baruch College in New York on Wednesday, December 2, for the Robert Zicklin Center for Corporate Integrity's 4th Annual Audit Conference, "Ensuring Integrity."
Information on the agenda and registration is here. It [...]
I was struck last weekend by the frequency of coincidence. I was working on the curriculum for my course in Risk Analysis – trying as always to stay a jump ahead of a class of smart, inquisitive MBA students.
This time it was the recurring observation of a common defect in logic and reasoning, named [...]
A senior member of
the fraternity of pundits touchingly spoke, recently, about one effect of the
passage of time: “The older I get,” he said, “the more care and respect I have
for the phrase “not in my lifetime…’.”
There’s a grain of sense -- however frustrating it is, that decent respect for [...]
Because “dumbed
down” education is a poor trade-off for political correctness, it is
unfortunate that the Uncle Remus stories no longer flow through children’s
literature into popular culture.
A favorite from my childhood involved the wily Br’er Rabbit, who was caught up by Br’er Fox’s tar baby, but duped his nemesis by imploring, “Please, [...]
The familiar formula for measuring forward-looking attitudes has an update:
The optimist sees a glass half full.
The pessimist sees a glass half empty.
Whereas -- the consultant sees a glass that’s twice as big as it needs to be.
Varying spins are given to the report just issued by the flagship firm of PricewaterhouseCoopers in the United [...]
The Finance section of this Sunday's edition of the London Telegraph carried a piece by Sean Farrell, under the evocative and self-explanatory headline, "Billion-Dollar Lawsuit Could Destroy Top Accountancy Firms."
It can happen. Attention should be paid.
Farrell captures the essence of the structural weakness of the current model for the [...]
If the global tumult of the last two years has taught us nothing else, it’s that reliable forecasts on complex issues are damnably hard to come by.
So where can wisdom be found today, on the vexed and pressing question of the survivability of the Big Four accounting firms and their franchise to audit the [...]
The dog days of summer. I’d rather be under a beach umbrella, doing teaching outlines for the fall semester with the facilitating aid of something cold and rum-based. Instead I am in deep dialog on tough issues with one of the world’s thoughtful accountancy regulators.
A very small group, that. “Thoughtful [...]
In what is still the global-scale financial scandal of the year -- India’s Satyam Computer Services -- the search for villainy continues to diversify.
• Blogger Francine McKenna leads the charge (Re:The Auditors) against what she sees as a corrupting business relationship of services provided alongside PricewaterhouseCoopers, whose Indian firm [...]
An exchange of lawsuits escalated late last month between Saudi Arabia’s Algosaibi family companies and the Saad group’s Maan al-Sanea.
Misappropriations rising to $10 billion are claimed, based on an alleged series of foreign exchange transactions in a workers’ remittance unit, by which riyal-for-dollars deals were rolled over and diverted [...]
We ought by rights to be in the summer doldrums – those still doing real jobs are taking a break in the country or at the beach, and the rest are hunkered down till the headhunters come back to town in the fall. But there’s a sudden flurry of attention [...]
In a time when channels for the distribution of news and commentary are mutating faster than can be tracked, may I offer this suggestion:
The news feed of the Securities Litigation and Enforcement Group -- here -- gathers thirty sources giving concentrated attention to issues involving securities law, regulation, enforcement [...]
The national celebration this weekend in the United States, and the coming Bastille Day celebration in France, serve as platforms for scrutiny of issues of public policy and private conduct.
Two recent personal experiences provide the context for this question: As a society how should we judge, concerning the balance [...]
A diversion from the usual topics -- because Saturday we had the privilege again to hear the exquisite Diana Krall in live performance – maturing and better with each tour.
Unannounced, in the middle of the set, came a sonorous and dirge-like instrumental of “I’ll Be There” – a touching tribute [...]
Ham-and-eggs for breakfast? To the hen, the choice is a matter of interest. To the pig, it’s life or death.
On the complexities of auditor liability and accounting firm survival, a reader last week had a subtle question. It concerned the Miami state court outcome in the Bankest litigation – where [...]
Recall the frustrated Irish villager, trying to direct a befuddled tourist toward Dublin:
“If I was to be going there, I wouldn’t be starting from here at all.”
Last week came the news that Mark Olson is resigning as chairman of the American audit regulator, the Public Company [...]
When I wrote recently of the likely recurrence of old-fashioned accounting scams – here – based on' [...]
Satchel: The Life and Times of An American Legend, by Larry Tye, Random House, 298 pages
I lost a dear colleague -- eleven years ago and much too soon – who, in addition to his friendship, ranked with the [...]
For reasons known only to Mercury, the god of communications, this post from Thursday was not fed to most subscribers. So this re-posting, with apologies to anyone finding or receiving it a second time.
When I went to make breakfast on Tuesday, I found a tempest swirling in my teapot: the report [...]
When I went to make breakfast on Tuesday, I found a tempest swirling in my teapot: the report that the United States Supreme Court is to resolve a constitutional challenge to the law establishing the Public Company Accounting Oversight Board – created by the post-Enron legislative spasm of the Sarbanes/Oxley [...]
When was there ever so concentrated a burst of public speculation on “which Big 4 audit firm is the next to fail”?
Within a single week, Accountancy Age predicted it would be Ernst & Young; in the blogosphere, Francine McKenna’s wager with Dennis Howlett fingered her ex-employer [...]
Is corporate India now vaccinated against an outbreak of white-collar financial fraud?
The great and the good of the country’s regulators would think it – taking at face value their prideful descriptions of the investigative scrutiny of scandal-ridden Satyam Computer Services Ltd.
The former chairman of the Securities and Exchange Board [...]
To have a real chance at saving the banks, the policy wonks need to get out of town a little more – beyond the urban cinch of the Washington Beltway or the City of London.
If they would shed their bankers’ grey suits and cordovans for a weekend in rubber [...]
"Everything old is new again ...."
-- Peter Allen
To pull off the next large accounting scam – or, more virtuously, to try to prevent it – where would we look?
This always-pertinent question has global dimensions, with criminal charges now lodged against two Price Waterhouse [...]
A graduate student in anthropology, able to have joined my field trip of last week, would have been handed an honors dissertation topic on a platter.
For two days I was with an exotic tribe – about a hundred senior-level bankers and their governmental regulators, assembled together to perform rituals and [...]
There’s a gaping disconnect between the pieties on coordinated regulation of the global financial markets, espoused at last week’s G20 conference in London, and the contrary behavior of the national-level minions on the ground.
Recall Aesop’s simple little tales, where the Greek storyteller often leaves a hanging question. For today, it’s [...]
Bernard Madoff was observably crooked, and his long-running swindle could easily have been stopped, early on. Except that those in the know either didn’t care, or had their own interests to be served.
Calling a halt to his scheming did not require a wake-up call at the soporific SEC, so thoroughly [...]
How confident are you in what you think you know? How certain that the facts underlying your belief are fixed and unchanging?
As reported in the on-line Financial Times for March 10 – here – the Securities and Exchange Commission has declared that financial statements are unacceptable for US purposes, where UK companies have followed that country’s recent rules permitting negotiated agreements for the proportionate liability of their auditors.
The only surprise [...]
Suppose a law that limited the height of professional basketball players to six feet. Or that forbade the performance of Beethoven’s symphonies by groups of musicians larger than a trio.
However able the players, the performance quality would be inferior. Discerning customers would flee in multitudes, for venues freely offering the [...]
Last night I was with a friend just back from Boca Raton, Florida – essentially “ground zero” for the devastation wrought by Bernard Madoff.
Our subject was the uncertain reaction of an average citizen – suffering job uncertainty, equity erosion in the family home, and dissolving prospects of a comfortable retirement [...]
Herewith a two-fold endorsement -- particularly for readers who are securities and litigation practitioners in the United States.
It's been my pleasure to follow with appreciation and admiration the very valuable resource developed by Bruce Carton, Securities Docket, a source of news that well belongs on the subscription list of [...]
The succinct wisdom of the late poet and trenchant social critic Jodie Hansen frames the dust-up started by my criticism of the extended [...]
Even as I said last month that the Indian government’s reaction to the billion-dollar fraud confessed by Ramalinga Raju, the CEO of Satyam Computer Services, would be protracted, disruptive and expensive – here – one manifestation both expected and unpleasant was an excess of prosecutorial zeal.
The Satyam saga has [...]
On the record so far, it is safe to predict that the legal and political maneuverings around India’s Satyam Computer Services will be continue to be noisy, protracted and inefficient. But the answer will come quickly to one question:
Did or did not former chairman Ramalinga Raju loot the company by [...]
I'm in mourning. New York super-lawyer Peter Fleming died on Wednesday.
In times when big disputes are managed to inevitable settlements by lawyers working as case administrators, the specialized courtroom trial bar has lost a brilliant character, whose equal is unlikely to be seen again soon.
Closer to home, the accounting' [...]
With a winter blizzard swirling outside, it???s a good day to adopt a lesson from my last Caribbean resort experience into the curriculum of the MBA course on Risk Management that I will teach later this month.
The context is certainly rich: between the collapse of Bernard Madoff???s investor scheme and [...]
As this blog celebrates its first birthday, there are two related reasons why I am unconcerned about the supply of new material for its second year.
To start, the crystal ball seems fully functional ??? based on my calls of December 16 promptly coming good ??? here ??? ???two predictions [...]
How to Talk About Books You Haven???t Read, by Pierre Bayard, translated from the French, ???Comment Parler des Livres Que l???on n???a pas Lu?,??? by Jeffrey Mehlman, Bloomsbury, 185 pages
It being the time of year for suggestions and resolutions, this bit of strategy is from the syllabus for my January [...]
Last Tuesday, December 16, I wrote that one of the "safe predictions as the Madoff story brings a sorry year to its welcome close" was this:
"(T)he safe but unfortunate bet, at this still-early writing, that at least one remorse-driven suicide will further color an already tawdry tale" -- [...]
There???s an ominous if predictable new chapter this week in the saga of Bernard Madoff???s alleged $50 billion escapade: the inclusion of the auditors as recovery targets. As the front page of the normally sensible Financial Times put it on Wednesday, ???lawyers say the asset-rich firms are likely to be [...]
There???s a rich new context for the aphorism forever linked to Warren Buffett, that ???when the tide goes out, you learn who???s been swimming naked.??? And it???s not a pretty sight.
In the social cliques of the Hamptons and around the pools of Palm Beach, there???s agony aplenty among those pink-cheeked [...]
What chance is there that the restrictions on the credit rating agencies, announced by the US Securities and Exchange Commission on December 3 ??? here --will actually be for the better? There is plenty of reason for doubt.
Although vital players in the credit market implosion that has triggered recession [...]
