Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Consequences – insider trading edition – #5

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Is possible time in jail the only bad thing on the horizon for a CPA accused of insider trading? Not quite. There’s a long list of bad things within view.

This series of posts is examining the possible consequences on the horizon for Mr. Scott London, former KPMG partner, as a result of his indictment for allegedly trading on insider information.

This post will discuss

  • Poster child for (fill in the blank)
  • Stress on marriage
  • Impact on family

Previous posts are here, here, here, and here.

Poster child for (fill in the blank for your favorite agenda)

Mr. London will be cited as ultimate proof of whatever bias or prejudice an observer has.

After all, what do you expect from:

  • the Big 4
  • a CPA
  • anyone who got their degree from a public college
  • somebody in the big offices that doesn’t have a clue about trying to get by in a small market – I’ll betcha’ he never had to hustle week after week to get another 25k engagement before the end of the year or lose his bonus
  • a firm that doesn’t disclose the name of the lead audit partner
  • someone who’s been around too long
  • someone who came up through the ranks too fast
  • a smug, fat-cat, capitalist pig who’s obviously at the top of the 1%-ers
  • the same firm that gave us that tax disaster
  • someone in the ivory tower that never gets his hands dirty, ‘cuz you know a regional audit PIC doesn’t have a clue what it’s like down here in the trenches

I’ve already heard or read five of the above comments.

For the next few years his name will be proof for a person’s favorite hobby-horse. I think that’s confirmation bias.

Stress on marriage

I know nothing of his marriage other than he is married. The publicity, indictment, possible/likely jail, and financial trauma will put severe pressure on his marriage.

This trauma would be a strain on the most healthy marriage.

I hope his marriage stands strong in the midst of this and that he draws tremendous strength from his beloved. I sincerely hope she is able to help him through this trying time. I really do hope that.

Can you imagine the pain of having to tell your spouse the real reason for the FBI making a 6:00 a.m. visit to your home?

Can you image having to tell her that you likely will go to jail?

I’ll make this next comment really vague – Once upon a time I had the opportunity to be in the room during a meeting in which a person confessed the scope of an embezzlement to the employer while said person’s spouse was present in the room. That was a horrible time. The look on that spouse’s face is a major reason I wrote the tragedy of fraud series.

Impact on family

Can you imagine telling your little girl that her hero is going to jail? Yes my princess, daddy did some bad things.

In this case, published reports indicate the couple has two children, one of whom is a boy and plays on the high school baseball team. I’m sure the two children have better technology with better access to the ‘net than me.

They have been able to follow the news and read all about the disaster as it unfolds.

They can also read the same snotty, mean-spirited comments at the end of news reports that I’ve read.

Can you imagine the pain of the conversations in which Mr. London had to tell his teenage children that what they will soon read in the papers is true? And that yes, he probably will go to jail?

Can you imagine the pain the children will have from the nasty comments they will get at school?

Mr. London will always know that he alone is the direct cause of every bit of his children’s pain. He is the cause of his wife’s tears.

Next post: armchair psychoanalysis, reduced employment prospects, and financial devastation.

Written by Jim Ulvog

April 18, 2013, 7:00 am at 7:00 am

Posted in Audits

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