Capital Calls: Clariant’s whistleblower woes 14 Feb 2022 Concise views on global finance: The $6 bln Swiss chemical firm’s shares fell by as much as 20% after it delayed 2021 results due to an accounting probe.
Capital Calls: Deutsche and DWS, Big Four 9 Dec 2021 Concise views on global finance: The German bank’s ownership of the asset manager looks less appealing after an ESG reporting scandal riled U.S. regulators; a record $167 bln in revenue will soothe the accountancy giants’ breakup pains.
French investors are collateral damage in EY spat 24 May 2021 Paris-listed Solutions 30 published its 2020 annual report even though the audit firm didn’t sign off its accounts. Post Wirecard, it’s encouraging that auditors are taking a tougher stance. But with lenders potentially pulling credit, it leaves shareholders in a painful limbo.
Guest view: A qualified opinion on UK audit reform 28 Apr 2021 Corporate collapses like Carillion and Thomas Cook highlight flaws in accounting for capital and dividends, argues Natasha Landell-Mills of Sarasin & Partners. Proposals to restore trust in accounts fall dangerously short. The government should focus on enforcing existing laws.
Atos’ April Fool surprise is no laughing matter 1 Apr 2021 The French IT group’s shares fell 14% after it flagged accounting problems at two U.S. units. The 1 bln euro hit to its market value looks harsh given they bring in only 11% of sales. Fears of more financial bugs will stymie CEO Elie Girard’s efforts to close the gap with rivals.
Capital Calls: Deloitte castoff, Banks and Brexit 15 Feb 2021 Concise views on global finance in the Covid-19 era: The UK auditor chooses an unfortunate moment to offload its lucrative restructuring practice; The Bank of England pours cold water on the idea of a regulatory bonfire after Britain leaves the European Union.
Guest view: Auditors hold key to climate crisis 28 Jan 2021 Accountants are not obvious saviours for a world threatened by global warming, argues Natasha Landell-Mills. But their central role in vetting companies’ financial sustainability, and their ability to act independently of regulators and executives, gives them a duty to be bold.
Bad auditors need to be fined like bad lenders 6 Jan 2021 Deloitte’s 15 mln pound fine for poor audits of software company Autonomy is light punishment given shortcomings laid out in a new report. The UK’s oversight regime is being overhauled. But doling out heftier bank-style fines is the surest way to shift behaviour.
GE accounting isn’t only thing that’s too complex 10 Dec 2020 A $200 mln fine for bean-counting tricks shows what happens when companies are driven by a desire to hit big numbers at any cost. Larry Culp has moved GE away from that obsession. But the dishonest accounting was made easier by GE’s sprawl. Culp has yet to grasp that nettle.
Big scandals explain small client auditing cull 19 Oct 2020 PwC quit as Boohoo’s auditor amid supply chain failures and governance concerns at the UK fast-fashion retailer. After backlash over EY’s failure to spot $2 bln missing at Wirecard, the Big Four is nervous. Dumping customers who inspire bad headlines and pay low fees is sensible.
GE’s accounting monster still lurks under the bed 8 Oct 2020 As if the conglomerate’s weak cash flows weren’t problem enough, boss Larry Culp may soon have to field an SEC lawsuit over GE’s misadventures in insurance, which long predate his arrival. A bigger problem, though, is GE Capital’s potential for creating bigger, nastier surprises.
Hadas: Wirecard woes show need for fraud-busters 1 Jul 2020 Accountants EY may have been particularly inept in missing fraudulent bank balances at the German payments processor, but auditors are normally right to presume companies are fairly honest. Sniffing out cheating is a job for separate, licensed and powerful forensic specialists.
Wirecard is argument for a Big Four pay clawback 30 Jun 2020 Audit giant EY is embroiled in the German scandal after signing off accounts when $2 bln was missing. Remedies like splitting bookkeeping from consulting or using two auditors may focus minds on finding frauds. But until pay is linked to clean accounts, scandals will continue.
GE’s audit switch wipes away another layer of dust 22 Jun 2020 The company is switching to Deloitte after a century with KPMG, exiting a club of audit lifers that includes U.S. Steel and P&G. It took too long and a radical new approach is unlikely given auditing remains an oligopoly. Still, fresh eyes should make for sharper housekeeping.
Corona Capital: Air travel, Starbucks 14 May 2020 Concise views on the pandemic’s corporate and financial fallout: Airlines’ experienced hands offer warning; Starbucks begins dance with landlords.
Virus audit crunch can be mitigated, not averted 26 Mar 2020 Covid-19 uncertainties may force accountants to raise red flags on companies’ financial statements. Delaying reports by two months, as in Britain, provides only partial relief. Investors and banks will still have to make calls on solvency, with less help from auditors.
NMC’s Muddy Waters vaccine needs a booster shot 20 Dec 2019 The FTSE 100-listed hospital group is under siege by the short-seller, sending shares down more than 45% this week. NMC has done the right thing in providing a detailed response - within two days. But its jittery investors could still do with greater clarity in some key areas.
Under Armour is unwitting ad for good governance 4 Nov 2019 Flagging growth and federal accounting probes are bad, but in a normal company they wouldn’t knock 20% off the shares. The $7 bln apparel maker, though, is not normal. An unfireable boss and jumbled accountability make it hard to convince investors anything at all is going right.
Wirecard is becoming uninvestable 15 Oct 2019 The $15 bln payments group’s share price fell 19% after the FT said it overstated sales. The company disputes the claims. Persistent volatility makes life hard for short-term traders. Long-term investors may be put off as the latest allegations involve a bigger chunk of revenue.
Muddy Waters’ latest broadside hits AIM as well 7 Aug 2019 Litigation finance firm Burford was the largest on the London exchange for growing firms in July. An attack on its complex accounting by the short seller has vaporized half its value. Less red tape and disclosure attract listings, but reduce trust – and investor returns.