{"id":1000897458,"date":"2024-10-16T17:40:28","date_gmt":"2024-10-16T21:40:28","guid":{"rendered":"https:\/\/www.goingconcern.com\/?p=1000897458"},"modified":"2024-10-16T17:40:43","modified_gmt":"2024-10-16T21:40:43","slug":"pwc-joins-deloitte-kpmg-and-mazars-in-the-cheater-hall-of-fame","status":"publish","type":"post","link":"https:\/\/www.goingconcern.com\/pwc-joins-deloitte-kpmg-and-mazars-in-the-cheater-hall-of-fame\/","title":{"rendered":"PwC Joins Deloitte, KPMG, and Mazars in the Cheater Hall of Fame"},"content":{"rendered":"\n

h\/t NL Times<\/em> for reporting this story<\/a>.<\/p>\n\n\n\n

Under normal circumstances we wouldn’t be terribly interested in news coming out of PwC Netherlands but in this case it’s relevant because the thing they did earned Dutch KPMG the largest PCAOB fine to date when they got caught doing it in 2023<\/a>. Why’s our audit regulator fining overseas firms when they should be worried about our firms flunking audit inspections? Your guess is as good as mine. Appearances.<\/p>\n\n\n\n

The TLDR is PwC Netherlands caught its people cheating. On their wives? No. On their taxes? Also no. The firm discovered that their people were sharing answers to e-learning, a phenomenon that happens at every large accounting firm all the time but one that regulators — particularly our regulator in the US — like to clutch pearls about as if this thing is unconscionable<\/a> and unique to the firms they catch doing it. On its face, cheating on exams isn’t a great look for a profession that’s supposed to protect the public and holds itself out as a bastion of ethics. But come on. <\/p>\n\n\n\n

PwC Canada was sharing answers like crazy up until 2020<\/a> and managed to get a completely flawless PCAOB inspection during this same period which you’d think demonstrates that these people know how to do their job. Isn’t that what these trainings are testing? Again…appearances.<\/p>\n\n\n\n

Dutch Deloitte and Mazars (now Forvis Mazars but just Mazars back when this happened) have had their own little cheating scandals<\/a> but what sets them apart from KPMG is that KPMG “submitted \u2013 and failed to correct \u2013 multiple inaccurate representations to the PCAOB” and claimed the firm had no knowledge of answer sharing by its personnel until it received a July 2022 whistleblower report. Oops. The PCAOB will let abysmal audit quality slide<\/a> but don’t you lie to them, they hate that. That goes for you too, Europeans.<\/p>\n\n\n\n

In 2023, the rampant cheating in their country prompted the Dutch Authority for the Financial Markets (AFM) to ask the big audit firms to investigate themselves to root out any possible answer sharing. Revealed in their 2023\/2024 Transparency Report [PDF<\/a>], PwC says they found just that. What a shocking turn of events. Who could have seen that coming.<\/p>\n\n\n\n

Said the firm:<\/p>\n\n\n\n

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The investigation has found that improper answer sharing has occurred within PwC Netherlands. We know that this behavior stands in contrast to the integrity and trust that must serve as the foundation of our firm, and we are committed to addressing the issue thoroughly.<\/p>\n<\/blockquote>\n\n\n\n

The scope of PwC’s investigation includes the period from July 2017 to October 2023 and all parts and job levels of the organization. This investigation is ongoing and is expected to be finalized by fiscal 24\/25. So next year.<\/p>\n\n\n\n

In the meantime, they’ve implemented measures to crack down on this behavior:<\/p>\n\n\n\n

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While the investigation remains ongoing, we have already implemented a number of measures, such as, the introduction of a Learning Code of Conduct to provide clarity of the firm\u2019s expectations and requirements related to participation in and the delivery of training, improving the way e-learnings are organised by converting some of them into classroom training sessions and the implementation of detective controls to flag possible improper behavior in relation to mandatory e-learnings. We are also taking action to hold colleagues accountable where appropriate, such as corrective conversations, written warnings, financial penalties, loss of position or leaving the firm.<\/p>\n<\/blockquote>\n\n\n\n

We’ve heard stories about people at EY US getting canned for BSing through e-learning ever since EY got hit with a $100 million fine for cheating in 2022<\/a>, a fine that was no doubt multiplied by the firm making false submissions to the SEC, so it isn’t too strange to hear that PwC might be axing people for it too. Or maybe they’re just saying that. Let’s be real, the high performers are getting “corrective conversations” at most. Assuming PwC didn’t lie to regulators about it they should be in the clear on a hefty fine.<\/p>\n\n\n\n

PwC Netherlands said they are “engaging in a root cause analysis to identify and interpret the underlying causes of improper answer sharing.” Maybe, and I’m just spitballing here, it has to do with the intense pressure of Big 4 grind culture and a lack of fucks given on the part of overworked staff forced to sit through checkbox trainings? “The results of this analysis will be finalized after completion of the investigation and used to strengthen the measures already taken and introduce any new measures as appropriate,” said PwC. Can’t wait.<\/p>\n\n\n\n

\u201cFew things erode trust like impaired ethics,\u201d said PCAOB Chair Erica Y. Williams in April 2024 when the PCAOB announced fines against Deloittes Indonesia and Philippines for cheating<\/a>. \u201cTo protect investors, the PCAOB will continue to address serious quality control deficiencies at PCAOB-registered firms around the world.\u201d<\/p>\n\n\n\n

“Yeah, we know. Do you really have nothing better to do?” I asked in the write-up of those fines.<\/p>\n\n\n\n

Since PwC came clean about the situation we shouldn’t expect them to earn a big fine for this. A slap on the wrist at most if even that.<\/p>\n\n\n\n

Related I guess:<\/p>\n\n\n\n

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Y’all Probably Need to Cool It on Sharing Exam Answers For the Time Being<\/a><\/blockquote>