McKenna speaks at the AAA Ethics Symposium
I presented twice, on our KPMG/PCAOB teaching case and on auditors as whistleblowers
It’s been a very busy last few weeks since I wrapped up my summer teaching assignment at Ohio State University on July 6. (I taught my custom-developed course ACCTMIS 7010 — a “ripped from the headlines” accounting ethics course — to 25 Masters of Accounting students that are sponsored by KPMG.)
The activities for American Accounting Association annual meeting next week included a pre-meeting of the Public Interest Section Ethics Symposium, the 25th annual meeting of this group. I moderated a panel on Thursday and then presented twice on Friday.
Click here to download the slides presented to the 2021 AAA Ethics Symposium for our KPMG/PCAOB Teaching Case: Corruption in the Auditor Inspection Process: The Case of KPMG and the PCAOB.
Click here to download the slides presented to the 2021 AAA Ethics Symposium for a panel on “The Future of the Accounting Profession: Regaining the Public Trust.” My piece was Auditors as Whistleblowers.
Speaking of whistleblowers, I gave the Ethics Symposium attendees the bad news that a federal judge in San Francisco posted his decision against whistleblower Mauro Botta, and for PwC, regarding Botta’s case for retaliatory termination by PwC.
Click here for a copy of the judges decision.
I will write more about this decision soon but, in the meantime, paid newsletter subscribers can read the two-part series I wrote while covering the trial and afterward that described a very bad situation that did not have to happen.
In Part 1, I'm looking at how well Botta makes his claims and how well PwC defends itself.
What happens when an abused partner finally feels empowered?
It’s a case that I have written much about, including how PwC did not retain key evidence Botta requested in discovery, in violation of the Sarbanes-Oxley Act of 2002. There have been no sanctions for this alleged violation of SOx or the alleged independence violations Botta revealed in his SEC whistleblower tip and countless media articles. The link below provides many more links to earlier media articles about the case and is free to all.
Mauro Botta's trial exposes the key role of instant messages in cases against the Big 4
Late on Friday I received some positive news from another whistleblower I have written about, Sandy Kuba, who is suing Disney Co. for retaliatory termination after she filed a whistleblower tip to the SEC about alleged revenue recognition fraud.
Click here for a copy of the judge’s decision to deny Disney’s request for a motion to dismiss Kuba’s five claims.
I first wrote about Sandy Kuba’s whistleblower tip to the SEC for MarketWatch.
The whistleblower was fired as a Walt Disney Co. accountant in 2017
Published: Aug. 19, 2019
By Francine McKenna
A former Walt Disney Co. accountant says she has filed a series of whistleblower tips with the Securities and Exchange Commission alleging the company has materially overstated revenue for years.
Sandra Kuba, formerly a senior financial analyst in Disney’s DIS, -1.31% revenue-operations department who worked for the company for 18 years, alleges that employees working in the parks-and-resorts business segment systematically overstated revenue by billions of dollars by exploiting weaknesses in the company’s accounting software.
Kuba said she has met with officials from the SEC on several occasions to discuss the allegations.
A spokeswoman for the SEC declined to comment.
A Disney spokesperson said the company had reviewed the whistleblower’s claims and found that they were “utterly without merit.”
I wrote again here at The Dig to dig into the issue Kuba alluded to regarding Disney allegedly “exploiting weaknesses in the company’s accounting software” to allegedly commit revenue recognition and sales and use tax fraud.
Could PwC's role in Disney's ERP project be discouraging the auditor from reporting material weaknesses in internal controls now?
© Francine McKenna, The Digging Company LLC, 2021