We’ve known that the Big Four auditors were rotten since the Carillion Scandal,
Long before that, of course. They can change the name, but the rot runs deep in the industry:
This problem infects other related industries, too. Management consulting firms and bond-rating agencies are standouts in that regard.
Well this just downgraded my monthly “required” audits from insignificant to corporate theater.
It’s only a DMCA violation if they were copying the material. Simply changing their grade wouldn’t trigger it.
A “record-tying” $50 million fine.
That’s literally pocket change to an outfit like KPMG; it could be pulled from the couch cushions in the executive washroom.
As someone once said, if a crime is punishable only with a fine, it’s basically legal if you’re rich enough.
KPMG made about $600 million in profit last year. A $50 million dollar fine is about 12% of their profits. It’s not nothing, but if this case took several years to close and they’re making this kind of money it’s hard to see this stopping them.
The fine could have been an order of magnitude larger and still not impacted their ability to continue business. A fine that large may have at least gotten shareholder attention. It’s not out of the realm of reason either given that these shenanigans may precipitate another global economic catastrophe and cost the world trillions of dollars in lost productivity and suffering.
On the one hand, yes.
On the other hand, it could be considered part of the integrity test as a honey pot. URL logging is the most basic of web statistics, so it’d be really easy to catch.
Um, isn’t this the company whose sponsorship is always on Phil Mickelson’s golf cap?
Lock them up!
Well, also remember that reported profits are also monies so small a company like KPMG can’t be bothered to hide them…
One way to decouple the two companies would be to require companies pay into a common pool that would be divvied up among companies that perform these types of audits proportional to the number and complexity of the audits they perform. Ideally no auditor should be able to audit the same company repeatedly or even in consecutive years.
Maybe to give the auditing firms some added incentive, a portion of fines from any potential violation they find that are upheld on a follow-up review get awarded as a bounty. So if a company were to be fined $1 million you might earn between $10k and $50k on top of what you get from the pool.
Finally when an auditor gets audited themselves, any fines for violations should be at least trebled (perhaps with an extra percentage going to the one who caught the violation, to reflect the difficulty of catching someone who should know all the tricks for hiding malfeasance.)
OK, how about this. KPMG is dissolved as a company and all assets seized by the SEC. All executive severance and golden parachutes are revoked and the individuals involved prohibited from working in the financial audit field for 7 years. All audits performed by KPMG within the last three years are declared void and the companies impacted must pay for re-audits at their own expense. If KPMG appeals, the names, addresses, and personal information of all senior KPMG executives will be displayed on billboards in rust belt states with high unemployment levels.
Our auditors are dirty; let’s make them hire some auditors to check their work!
It wouldn’t be at all surprising if the test wasn’t directly administered by IT. They probably set up SSO if it was farmed out to a 3rd party; or installed some LMS ‘solution’ and loaded the licensed curriculum pak; but that’s the sort of area that is in the ‘nominally standardized but kind of hairy’ that discourages in-house implementations and DIY.
If I sound SCORMful of the average quality of this genre; that would be because I am…
Maybe they can hire Accenture (formerly Arthur Andersen). I hear they’re reliable[1].
[1] At providing the answer that the audited company wants.
Maybe Accenture should have their auditors and their technology consulting/outsourcing people switch places.
A tech consultancy that reliably delivers the answer the customer wants and auditors that inflict a drip feed of bitter disappointment and unpleasant surprises sounds way better than what they have now…
That’s not really true. I’m not saying that Accenture don’t have the same issues as other consulting firms, and also I’m not saying that once upon a time the thing that became Accenture wasn’t once a part of AA. I’m also not saying that the cast of characters at AA doesn’t overlap with Accenture.
I am saying that, by the time AA went tits up in 2002, Accenture had severed all ties with AA several years earlier and before that had been operating as an independent company for over a decade.
These auditors will never know what it’s like to face a no-win situation.
In a functional world they’d get the same answer from all forms because fear of prison (or some sort of “corporate death penalty” keeps them honest)
