The aftermath from handing out the wrong envelope at the Oscars continues.
On the long shot that you might be interested in the audit and accounting angle of this mess, here are a few articles for more detail:
3/1 – Variety – New Photos Show PWC (sic) Accountant Tweeting, Mixing Envelopes Backstage at Oscars (EXCLUSIVE) – Article reconstructs the moment by moment timeline, with photos. Of particular note is the tweet by Brian Cullinan of best actress Emma Stone was taken and posted after Warren Beatty and Faye Dunaway were on stage.
Another photo shows Mr. Cullinan standing behind Mr. Beatty holding two envelopes. At a later time I may explain why it is quite reasonable for that to be the exact number of envelopes that ought to have been in his hand at that instant.
3/2 – Page Six – PwC Oscar accountants received death threats – As is almost expected for our completely messed up culture, the two PwC partners have been receiving death threats.
Looks like Credit Suisse is in trouble again. The feds and NYDFS have opened another money laundering investigation.
Check out the report on 2/23 at Wall Street Journal – Credit Suisse Probe Opens Old Wounds for the following info.
A retired professor invested $500K in a startup back in 2000. When the company went public in 2008, his shares were worth $80M.
Cool! Good for him!
He didn’t want to share a lot of that with Uncle Sam, so he got some help from the Israel branch of Credit Suisse to cut his tax bill.
By 2013 he had $200M parked in his accounts in Switzerland.
Well, somehow the revenuers caught up with him.
The accelerating pace of change doesn’t slow down merely because I have multiple audits in progress plus more that just started. Here are a few articles to help keep all of us up to date on two newly effective standards:
For a long time the professional requirements for addressing going concern issues have been located in the audit literature. Yeah, the accounting requirement was in the audit standards. There has been an effort for several years to this guidance out of the SASs and into GAAP. Two articles show the substantial progress:
11/8/16 – Charles Hall at CPA-Scribo – It’s Time to Apply FASB’s New Going Concern Standard – ASU 2014-15 creates a requirement in GAAP for management to assess whether there are conditions or events which raise substantial doubt about ability to continue as going concern.
This is effective for financial statements ending on or after December 15, 2016. Translation: 12/31/16 financial statements. That would be the ones you’re auditing or reviewing or compiling at the moment.
If you haven’t tuned into this new requirement, check out Mr. Hall’s article before you download the ASU for study. Hint: the new requirements on management will seem remarkably familiar.
In case you hadn’t thought about it, having a GAAP-based going concern requirement placed on management means that there is now a specific need to address going concern in a review or comp.
2/22/17 – Accounting Today – AICPA changes going concern audit standard – Now that the going concern requirements are in GAAP, the ASB has modified the rules in the audit literature.
If you casually pay attention to what is going on in the land of Big 4, a world far, far away from most of us in the accounting world, you might have interest in two recent articles from Jim Peterson, pondering the survivability of the huge firms. I will summarize what I think are a few highlights.
2/13 – Jim Peterson at Re:Balance – If the Big Four Went “Ex-advisory” – Deja Vu? Or Worse? – Regulators don’t like the huge consulting practices in the Big 4 and the partners in the Big 4 consulting arms don’t like the constraints on their growth, opportunities, and compensation from being tied to the audit & tax practices.
Article speculates on the impact if the consulting work were to be spun off, as happened back in 1998 through 2001.
There haven’t been a lot of high-profile articles about the Wells Fargo fake account fiasco recently. I’ve noticed a number of articles though, which suggest there is ongoing activity addressing the intentional, systemic failure. This disaster will not be cleared up soon.
- How does Wells fix the indirect harm it caused?
- New compensation plan removes cross-selling as a benchmark
- Possible MD&A enforcement action?
- Branches received 24 hour notice of internal inspections
- Bank may eliminate 2016 bonuses for senior staff
12/27/16 – Wall Street Journal – Wells Fargo Is Trying to Fix Its Rogue Account Scandal, One Grueling Case at a Time – Making customers whole will be easy if the customer was only charged a few dollars a month for a while. Still simple to resolve if there were monthly charges and a bunch of overdraft fees because money was taken out of an account unknowingly which resulted in some bounced checks.
What do you do when the unpaid fees on a credit card flowed into negative information on a credit report which resulted in a customer being denied funding for a home loan somewhere else? That’s what happened to one interviewed customer.
Destroying someone’s credit is a tough thing to make right.
Look at music and newspapers as hint of what could happen in accounting. Then consider how ripe Hollywood is for the same disruption. In your accounting job what are you doing to get ready?
The music and newspaper industries have revenue trends that look vaguely comparable to the graph above. The IT revolution caused that severe disruption.
Hollywood is facing the same disruption.
Here is the question for accountants:
- What are you going to do before that type of disrupting change overruns your firm and your career?
I’ll be quite upfront with my challenge: I can see the impact of massive change in other industries, but I am not quite able to see what disruption would look like in my world. I’m struggling with how to get ready. Maybe you are too.
One more followup on the human devastation caused by Alexander the Great.
There are a lot of posts on my blog discussing Professor Frank Holt’s delightful book, The Treasures of Alexander the Great: How One Man’s Wealth Shaped the World.
In Appendix 2, the professor tallies the reported plunder, tribute, and other resources seized by Alexander the Great. Quantifying the destruction is not possible because the ancient literature often does not quantify amounts, only that slaves, or plunder, or cattle, or tapestries, or something else was seized.
The professor does quantify the reported information in an algebraic format. I’ve previously mentioned:
Total proceeds from the wars is then estimated in a formula expressed as 81.67( X) +311,761.
The author guesses the grand total for his years of campaigning at something between 300,000 and 400,000 talents. With the fixed portion of the second estimate at 311k, I think the total would be well over 300k.
Those amounts are in talents, with each talent being a massive amount of wealth. For an order of magnitude, consider that my guess is an ancient Athenian talent would be expressed something somewhere in the range of around $28M today.
I just went through the Appendix looking at the tally of slaves taken.