Capitalism is grounded in investors entrusting businesses with their money, which requires a system to prevent firms from robbing investors: auditors.
Like every industry, auditing has been monopolized by a handful of firms, but auditing isn't like every industry.
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Like every industry, auditing has been monopolized by a handful of firms, but auditing isn't like every industry.
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Auditing is the industry that lets other industries function, and as auditing shrank to four giant firms - EY (Ernst & Young), PWC (Pricewaterhousecooper), Deloitte, and KPMG - the auditors have switched sides.
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You see, these mega-firms don't merely audit giant companies - they also sell them farcically high priced "consulting" services, and winning these lucrative contracts requires that auditors tacitly (or overtly) agree to turn a blind eye to financial fraud.
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Lurking behind virtually every major corporate scandal of the past decade is an auditor that was secretly in cahoots with the company it was supposed to be overseeing and watchdogging.
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The multibillion-pound Carillion collapse? Abetted by all four of the firms, who also picked up hundreds of millions in contracts to oversee the company's unwinding after it collapsed in a blaze of fraud.
independent.co.uk/news/business/…
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independent.co.uk/news/business/…
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And the internal culture of these companies is - predictably - awful.
Deloitte got hacked, lost 5 million confidential customer documents from the world's largest businesses, and kept it a secret.
theguardian.com/business/2017/…
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Deloitte got hacked, lost 5 million confidential customer documents from the world's largest businesses, and kept it a secret.
theguardian.com/business/2017/…
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PWC threatened security researchers who found grave defects in the software it charged its clients to develop:
zdnet.com/article/pwc-se…
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zdnet.com/article/pwc-se…
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But KPMG might be the worst.
Start with the company's criminal conspiracy to recruit members of its own government oversight board, smuggling documents out of government watchdog offices into its own files.
pogo.org/investigation/…
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Start with the company's criminal conspiracy to recruit members of its own government oversight board, smuggling documents out of government watchdog offices into its own files.
pogo.org/investigation/…
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But it gets even dirtier! Last year, the company admitted that its most senior officials had been conspiring to steal the answer-keys to GOVERNMENT ETHICS EXAMS in order to cheat on them.
marketwatch.com/story/the-kpmg…
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marketwatch.com/story/the-kpmg…
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The thing is, the Big 4 steal from rich people - the investor class - so eventually this shit was going to stick to them. It finally has. Sorta. A little.
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The Financial Reporting Council, Britain's accounting regulator, has given the companies until Oct 24 to submit plans to spin out their consulting arms into separate businesses, which must take place by Jun 2024.
edition.cnn.com/2020/07/06/bus…
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edition.cnn.com/2020/07/06/bus…
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It was prompted by EY's complicity in billions of fraud by Wirecard, Germany's disgraced payment processor.
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Hilariously, the companies claim to welcome the news: "Deloitte has been consistent in our support for reform. We remain committed to playing our role in delivering change that embraces audit quality, improves choice and restores trust" -Stephen Griggs/Deloitte UK Deputy CEO
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Uh, dude. If only you knew someone high up at Deloitte who could have taken action before this?
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