Auditors Caught Cheating

Integrity

In recent weeks the world is being reminded how military tension in faraway countries can effect us at our front doors. We have become a global village with economies that are interdependent. Some countries blessed with natural resources will negotiate the economic tempest without catastrophic fallout, others will be exposed as not very resilient.

How quickly we have forgotten the role international credit rating agencies played in the 2008 financial crisis. Analysts agree that mortgage-backed securities were given safe investment grade rating – the objective: to encourage highest profit making. The rest as they say is history with some countries like Barbados with opened economies unable to recover to pre-2008 economic performance.

The experience of the 2008 financial crisis emphasizes the importance of oversight bodies implementing robust, relevant governance infrastructure to minimize recurrence of seismic events of 2008. In Barbados we witnessed a local version of poor governance with corruption added to the mix which led to the collapse of CLICO. Many Barbadians have suffered immeasurably as a result, some crossing to the great beyond after losing lifelong investments and nest egg savings.

PwC Canada has been fined more than $900,000 by Canadian and US accounting regulators over exam cheating involving 1,100 of its auditors. 

The watchdogs found that the Big Four firm failed to spot that staff were sharing answers in professional exams between 2016 and 2020 because of shortcomings in its internal standards and test supervision. 

The Canadian Public Accountability Board fined PwC Canada C$200,000 while the US Public Company Accounting Oversight Board imposed a $750,000 penalty. The PCAOB, overseen by the Securities and Exchange Commission, has powers to sanction foreign accounting firms if they are licensed to carry out work for US clients.

FBN

This week another international PwC fined over exam cheating involving 1,100 of its auditorsnada Fined by US for ‘Widespread’ Cheating on Training story caught the eye. PwC Canada has agreed to pay $750,000 to US audit regulator after it was discovered over 1200 of PwC professionals shared or received answers to internal training tests. It makes the average person question the trust given to certifications and attestations issued by financial accounting houses who are responsible for shoring your confidence in the financial space.

PwC employees fined by US regulator represent the culture of that organization. The blogmaster will confidently opine PwC was caught in the dragnet this time around but the unethical behaviour probably exist elsewhere. One can only speculate the extent audit comments and management letters are compromised because of actors with questionable ethnics who represent oversight bodies such as the PwCs and others.

In Barbados we tend to avoid probing these kinds of issues as the CLICO episode exposed. Regulators being fined routinely has become a regular anyway. Not one day so far.

18 comments

  • Peanuts.

    The tip of the iceberg.

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  • Less than a peanut.
    Probably less than the annual salary of some higher-ups

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  • Boy, am I surprised! NOT!

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  • 😀
    I seem to be going through a slow period.

    My comment was more a knock on the small penalty imposed by the US and Canada. Such small fines may seem like punishment but are not harsh enough to curb wrongdoing.

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  • Has anyone else noted that NATION NEWS is still in FULL SLAVERY MODE. They keep quoting this and that lawyers as “QC”, do they know Barbados is now a REPUBLIC and these legal titles are now non existent for the legal fraternity. Same as Royal this and that are now not legal names.

    Highly educated does have it’s limits particularly those administered by the UWI chancellor.

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  • Most fines on the rich are a slap on the wrist. Killer fines are for the poor smoking a spliff to forget their poverty.

    Killer fines can be a couple of hundred dollars for the poor.

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  • Learn from Shaggy.

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  • @ Wily Coyote February 26, 2022 10:23 AM
    (Unquote).
    Has anyone else noted that NATION NEWS is still in FULL SLAVERY MODE. They keep quoting this and that lawyers as “QC”, do they know Barbados is now a REPUBLIC and these legal titles are now non existent for the legal fraternity. Same as Royal this and that are now not legal names.
    Highly educated does have it’s limits particularly those administered by the UWI chancellor.
    (Unquote).

    +++++++++++++++++++++++++++++++++++

    Glad you have noticed, WC!

    These people just can’t help aping their masters, either past or ‘still’ present.

    Even the president refuses to set the right example along with the PM still wallowing in the title “QC”.

    Just a bunch of immature mimics still growing up stupid under the Union Jack.

    What a bunch of ‘Quack’ counsellors, indeed!

    At least Garth Patterson has seen the obviously wise need to drop that monarchical title QC and simply uses SC (Senior Counsel) to set the example of what is means to reflect the mores of a republic.

    Even our own GP 2, the regally right royalist, would not have been that daft to carry on the stupid royal pomp and pageantry enough to make the very Queen cry a dry river of mock tears while advising her grandson Prince Willie to stay clear of Bimshire.

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  • @Wily C

    Some people are addressed as “The most Honourable” and some are just plain “Honourable”

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  • Black insolvency
    By Ralph Jemmott
    Two articles in the Nation of Thursday, February 24, 2022, caught my attention. They both related to insolvency and indebtedness in the black business sector. I have contended for some time that Black Redemption will depend on two key developments.
    One is the restoration of the integrity of the black family, nuclear or extended, and the other is black economic enfranchisement, black people’s ability to control their economic dynasty. Without these, black people in Barbados and much of the diaspora will go nowhere.
    Too many of our children will face conditions of financial and social insecurity and blacks will continue to sell their labour to capital at very marginal rates.
    Speaking on the Appropriation Bill 2022 on February 23, supervisor of insolvency in the Office of Insolvency, Esther Springer, noted that “a lot” of Barbadian businesses were functioning on the edge of insolvency. This is perhaps not surprising given that historically many black enterprises in Barbados have tended to be undercapitalised.
    The average would-be black businessman does not have large reserves of start-up capital and there is often an insufficiency of working capital.
    There may also be some truth to the perception that lending institutions often appear reluctant to underwrite small black enterprise, ostensibly because of an anticipation of failure.
    Given the constraining effects of the COVID-19 pandemic, which has reduced consumer spending across a number of sectors it may not be surprising that small business black and white has seen a reduction in prosperity. What was more surprising in Ms Springer’s speech was the admission that many small enterprises were poorly run because of an apparent lack of expertise and competence.
    Costs their products
    She is quoted as saying: ‘They are unaware of the ability to costs their products, their statutory obligations in relation to tax, to national insurance, the obligation if they are employers in terms of calculating vacation pay, and these are things that have strangled the business from the outset.’ It is hard to conceive of anyone starting an entrepreneurship without a satisfactory understanding of the business obligations mentioned by the insolvency supervisor. One cannot help but feel that too often persons go into private enterprise for the wrong reason. Often the motivation is that they want to be their own boss and “do not want to wuk for anybody”. This sometimes ignores the challenges of establishing a personal business before it begins to show a viable profit. Another issue for small black business persons is that often they want to show prosperity before the concern is safely established. Hence, they adopt a consumerist lifestyle that undercuts the viability of the commercial enterprise.
    One answer to the dilemma is some form of business education.
    Ms Springer herself suggests that the problems “need to be dealt with even at the levels of our schools in terms of what we teach our children”. Others have contended that business
    acumen is an innate talent which one has to be born with or otherwise learn at an early age from being raised in an entrepreneurial environment. Entrepreneurship can probably be taught but as with so many other cognitive acquisitions, there are some who may never acquire the skill set or some whose personality flaws obviate successful learning.
    An acquaintance whose enterprise collapsed went before the court when the business was being wound up. The presiding legal authority stated that he had never seen a business so badly run. The “businessman” has done a one-year course abroad.
    In another case, a businessman running a small enterprise was in the habit of raiding the till to take his lady friends to lunch. When the business was booming, there were apparently many lady friends.
    At the end of each month, he had no idea what his profit margin was. The enterprise failed and the girlfriends quickly disappeared. On another occasion, I was among a group of very young businessmen. Being the only teacher in the group, I kept quiet as the conversation turned to making money and talk about how much this or that person was worth. Later I concluded that the group sounded more like hustlers seeking to make a quick buck than adroit and serious entrepreneurs.
    Another thing that has emerged is the fact that individual Barbadians are increasingly falling into debt. Ms Springer spoke of persons with eight credit cards, using one card to pay off another. Somewhere along the line we have become caught up in a highly consumerist culture.
    Maybe it was when we were approaching “First World status”.
    Now the whole country is in debt, with fading prospects of paying it off as we continue to borrow.
    Owen Arthur once spoke of “creating a new entrepreneurial class”. Easier said than done, particularly in these perilous times.
    Ralph Jemmott is a retired educator and social commentator.

    Source: Nation

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  • @Sargeant

    “Some people are addressed as “The most Honourable” and some are just plain “Honourable”

    The issue I have is the “Honourable & Most Honourable” list is EXTREMELY LIMITED, what do we call the majority of the legal community “DIS-HONORABLE or better still THIEVES”

    Oh yes these individuals still under BLACK SUPREME LEADER SLAVERY and reluctant to give up their mastery “QC” titles, ha, ha., the world laughs at the ignorance.,

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  • I think ALL such titles are pure “pompousity” and therefore quite hilarious. Honourable people really don’t need to be declared honourable every time somebody tries to call their names. If they are IN FACT honourable, it will obvious to most without any such declaration.

    Old oeople need to let go of such vanity. Nobody much is falling for that piffle these days.

    Why does anybody need to be known by anything other than their name?

    Let your honourable deeds speak for themselves, is what I say! They are the only convincing evidence anyway.

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  • Make that “POMPOSITY”.

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  • @Donna

    It is worth the time to acknowledge the origin of the custom of using titles in our system.

    ————————————————————

    The Honourable | Title, Use, & Meaning

    https://www.britannica.com/topic/The-Honourable

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  • Trust blindly for they are experts many say.

    Swiss Banks caught up in Money Laundering Scam, recent international headline screams.

    FDA and CDC not realising pertinent Covid19 dating according to DemocracyNow and other watchdog organizations.

    Poor rakey negotiators in Barbados allow the sale of Cable & Wireless and phone servjce now crappy and new owners scuttle UPS devices for homeowners.

    Banks can do as they like.

    Procurement used to fund kickbacks.

    Proxy companies used to hide kickbacks.

    Feed me shit and tell me eat it and be a good citizen and you will I will ger largasse crumbs and be included in social invites with de boys… while others smell shite.

    Again, trust de experts blindly!

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  • David,

    Lotta shite that needs flushing!

    Makes people look silly, clinging to these damn titles!

    We can award people and reward people without these damn titles!

    Liked by 1 person

  • To let @herman jemmott know, the challenges cited are universal. Any why so many start ups fail. Many failures lack mentors. Or refuse mentorship (they know better?). And yes many want to ‘show success’ before they are actually successful.
    If one observes the many ‘immigrant’ populations in other countries, one will note that skin tone is not a binder. Koreans may ‘look like’ Chinese (even Japanese) but they are very separate for the most part.
    Their support comes from within their community.

    Liked by 1 person

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