Black Friday Footnotes: Carillion Liquidator Wants Lots of KPMG Money; EY Can’t Handle the Truth; Mattel and PwC Settle with Investors | 11.26.21

Carillion Liquidator Seeks $336 Million From KPMG [Bloomberg] The U.K. government agency charged with liquidating Carillion Plc has lodged a claim at the high court against auditor KPMG, the Sunday Times reported. The official receiver has accused KPMG of negligence in its audit of the U.K. contractor and quantified claims of about 250 million pounds ($336 million) in dividends and advisory fees paid between 2014 and 2017, the newspaper reported. Full details of the legal claim are expected to be made public before the end of the year, it said.

Legal actions against PwC, big four grow [Australian Financial Review] The Supreme Court of NSW has struck out a $43 million professional negligence suit against Australia’s biggest auditor, PwC, by failed education provider Cornerstone, but the collapsed firm will be allowed to file an improved claim as legal actions against the major accounting firms continue to mount up. PwC also settled a NSW District Court case over its allegedly deficient work for media company Broadcast Operations last week, while rival firms EY and Pitcher Partners are in a Federal Court trial over their audits of plaintiff law firm Slater & Gordon before its near collapse in 2015.

EY files criminal complaint over leaking of classified Wirecard report [Financial Times] EY has filed a criminal complaint over a German newspaper’s publication of a classified parliamentary report into its work for disgraced payments company Wirecard. The highly critical report was written by Martin Wambach, a partner at accounting firm Rödl & Partner, on behalf of the parliamentary inquiry committee into the Wirecard scandal. It highlighted serious shortcomings in EY’s auditing work, finding that the firm failed to spot indicators of fraud, did not fully implement professional guidelines and, on key questions, relied on verbal assurances from executives.

KPMG UK extends tenure of Bina Mehta as chair [Financial Times] KPMG’s partners have voted to extend the tenure of Bina Mehta as chair of the UK firm until 2024 as it seeks to move on from the disruption caused by the exit of Bill Michael over comments on a staff video call. Mehta became the first woman to chair the Big Four accountant when she was hastily appointed in February.

Mattel Investors Want First Court OK of $98 Million Settlement [Bloomberg Law] Mattel Inc. investors who say it made and then hid material misstatements in its 2017 financial results asked a federal judge in California for initial approval of their $98 million deal with the company and auditor PricewaterhouseCoopers LLP. The cash settlement represents an “excellent recovery” compared to maximum damage estimates ranging from $320 million to $550 million, the toymaker’s investors said in documents filed as part of their preliminary settlement approval bid in the U.S. District Court for the Central District of California.

The PCAOB has a new board. Time to get to work! [The Dig] There’s a lot to do to restore credibility to a regulator badly damaged internally and externally by the most egregious scandal ever to hit the accounting industry.

Deloitte to offer remote working – from overseas [Australian Financial Review] Deloitte staff wanting to have an extended trip overseas will be able to work remotely for the Australian firm from countries likely to include Britain, Singapore and India from next year. The move by the big-four consultancy comes ahead of an expected exodus of professionals from across the sector after almost two years of closed borders, and is designed to keep advisors tied to the firm while allowing them to an extended period in another country.

Warren Averett gets investment from Wealth Partners Capital Group [Accounting Today] Warren Averett became the latest accounting firm to receive capital from a private equity or investment firm, but in this case the money will go to the firm’s asset management subsidiary, which hopes to make future deals with other CPA firms to acquire their wealth management practices.

The post Black Friday Footnotes: Carillion Liquidator Wants Lots of KPMG Money; EY Can’t Handle the Truth; Mattel and PwC Settle with Investors | 11.26.21 appeared first on Going Concern.

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