Scott London’s Other Crime: Tax Fraud

Former KPMG audit Partner Scott I. London brought great shame to the accounting profession this week by being charged with conspiracy to commit securities fraud through insider trading. After nearly 30 years with KPMG, London went down in flames after being caught passing insider information on audit clients of the Los Angeles office to his “friend,” Bryan Shaw.

Proving once again that there is no honor among thieves, Shaw got caught first, and then sold out his friend Scott to the Feds.  He helped them get a gorgeous trail of evidence, including phone calls and photographs of the crime.  Both are now charged with insider trading.

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On Becoming a Big 4 Audit Partner

This was left as a comment to an article here, but I didn’t want it to get lost in the shuffle. It gives good insight on becoming a partner at a Big Four firm.

I joined PwC as a director, with explicit expectations that I’d have a leadership role building a new consulting practice. Along with that, I was told I could make a run at partner if my sales numbers were good. Even when the leadership role and the new practice never materialized, I had great numbers and terrific reviews.

After over a year of solid performance and high praise, I found out only by chance that the partnership isn’t an option for me because of my age. Of course this came as a shock. When I asked about my only other option for advancement, the Managing Director role, a partner told me it has similar revenue targets as the partnership but with greater risks.

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The Cost (and Risks) of Becoming an Audit Partner

Ever since my days as a staff auditor at Arthur Andersen, I’ve wondered what it costs to become a partner at a large firm. It’s obviously not something that is widely discussed with staff, so the youngsters all remain clueless.

But Francine McKenna of re: The Auditors has finally answered my question. She points to a report by the Center for Audit Quality. The report says that the average capital contribution per partner is $418,365, which is no small sum for an individual to pay.

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