Thursday, August 16, 2012

Pricewaterhouse Coopers - the see-no-evil audit firm

A short post written in frustration.

I wrote to PWC (via their email-contact service) asking for an email address to send a large dossier alleging fraud at a company Pricewaterhouse Coopers audits.

I received no reply. It may be because PWC does not want the dossier and is happy to audit the firm regardless.

I presume PWC will remedy this (and I will report back when they have).

If they do not remedy it then I will dub PWC the audit firm that chooses to "see no evil".


It took about 24 hours - but I have now been contacted by PWC. Thanks for roughly 10 people who sent this to contacts at the firm.


Anonymous said...

Have you considered sending the dossier to the attention of the chair of the company's audit committee as well?

John Hempton said...

Yes. But in this case the chair of the audit committee is one of the perpetrators.

But as a rule I think that is the wrong course of action. Stock frauds may or may not involve the chair of the audit committee (usually they do).

If I do not know and I send the dossier to the crook I am exposing myself to unnecessary risk. (Crooks do silly things when they risk being caught...)

In this case PWC is NOT crooked - so it is safe to send it to them.


Anonymous said...

They probably outsourced the job of responding to general email queries - most likely to India or the Philippines. My guess is that they either don't know or don't care how to answer your question correctly.

You will have better luck calling them.

longshorttrader said...

Guess who audits Fraud Mountain Coffee Jokers (and was one of their first customers)?

Who audited See No Forest, Satyam, Corzine Global.. I mean MF Global.

These aren't your few hundred million $ market cap frauds, which exist by the dozens. These are the big boy frauds.

Anonymous said...

If it's a generic email address, you will likely have to wait while they attempt to find somebody who will take your request seriously.

The more charitable explanation for the lack of response is that they are having intense internal discussions and want to get their ducks in order before receiving the material.

No matter how you slice it, if they're already audited the firm then they are probably assessing the following probabilities:

1) Whether you will release the information publicly (unlikely?)
2) Whether they will be seen to have been at fault or complicit

I hope that professional code of conduct and ethics will compel PWC to answer you.

Is it safe to say that you don't want to rope in any of your PWC contacts to run it up the chain for fear of reprisal-by-association?

MarkC said...

Why not send it to the published audit partner, failing that the Ethical/Professional Standards bods at the ICAA in Sydney?

John Hempton said...

See no forest was audited by E&Y - I never checked the others - but pwc can't be blamed for everything.

John Hempton said...

And yes- I have left it roughly a week - no response.

I did send it to the local securities regulator though (:

JDW said...

What's that legal term - blissful ignorance??

Anonymous said...

it's not in their interest to get it out. If they messed up (and were messing up for a long time), what signal that does send? Better to shut up and put up, and hope things go quiet.
The whole auditing system needs a serious overhaul of incentives.

Anonymous said...

I belive I am being charged every month from this company: MYFAX PROTUS IP SOLN EURO 7,00, even if I have no recollection of signing any contract, and certainly I am not using their services.
How can I stop this?
Thank you,

Tim Worstall said...

Are you going to tell us which comopany so we can get our shorts on?

Anonymous said...

In actual seriousness, have you tried their Twitter account? It appears to be monitored by an actual human:

Anonymous said...

If you really want to set things in motion, all the local office and get contact information for the partner responsible for independence at the national level. But buckle your braces first.

Anonymous said...

Seems like a pretty lame way to try to contact them. I'm sure if you really wanted to get the dossier in front of them you could find someone with minimal effort. But I don't think I'm saying anything you don't already know.

Anonymous said...


I guess you're doing the apples and oranges thing here. Email is most likely checked by some freshman who's reprimanded instantly if he passes on a "junk" mail, but will most likely not be touched at all for missing something "remotely important" - hence his modus operandi.
But Half-Priced hoo... ouch sorry ;))) is definitely a see-no-evil audit firm, at least have been in a number of instances (I trust it you visit the Grumpy Old Accountants blog at least sometimes, eh?).

Also, don't put too much trust in them not being crooked. They might not be, but given the... complicated relationships that often emerge between them and their clients, and wildly varied nature of professionalism, experience and etics among their stuff, it might be entirely possible for a crooked insider to extract information about source (e.g. point at you) from them "in passing".

(Been there, done that. Not that exactly, but I've been getting info I definitely shouldn't from big4 people. Without all too much trouble, too, they really are interested in pleasing the customer at times, and when it's neither "adjusting the report" nor additional work/fixes - e.g. "the serious stuff" - they tend to relax and ease down. On the other hand, that's Russian wings of big4 i'm talking, maybe they suddenly all grow way older and better in Australia).


dan said...

John, it shouldn't be too hard to guess the email address for Bruce Morgan (or the CEO of whatever PWC division you need). If you have ever emailed someone in PWC before you will know their email address format - it'll be something like

After several unsuccessful attempts to bring it to a company's attention via the normal channels, sending an email directly to the CEO will usually get their attention.

Sadly, after more than 10hrs on the phone and several emails to Vodafone I gave up the normal channels and tried emailing Nigel Dews for help. Even he wasn't able to help me. So two weeks later one email to Vittoria Collao was answered personally from his Blackberry in 2hrs.... it still took a few further emails and phone calls to sort out my issues with them, but at least the wheels started turning. No wonder Nigel was "re-assigned".

Absalon said...

It is a continuing source of amazement and horror to me that no bankers and no auditors were prosecuted as a result of the financial meltdown.

Anonymous said...

E & Y's name seems to crop up with some regularity in many of the biggest frauds, although I may be guilty of thinking I have found patterns in pi.

dearieme said...

"In this case PWC is NOT crooked": heh, heh.

davo said...

Geez John,

You got to stop trying to do the right thing, lest you end up waiting it out in an embassy! Me thinks plenty of shorts to be had. The big four miss plenty in the general purpose audits! Arthur Andersen sure did...

Conscience of a Conservative said...

Have you read Francine Mckenna @ re-the auditors?

Anonymous said...

Hi John,

I like your blog a lot, even though it's rather different from the other content on my blogroll!

I got here late and it seems your problem has been solved already but in future, it might be worth considering using social media to make your frustrations known?

Over the last month or so I've witnessed and heard of at least TEN cases where paying customers at major corporations could not interface with the company in any way. In frustration they hit twitter with complaints and within moments in some cases, staff from the company in question (often the Marketing department) had notified the an appropriate person to make contact with the frustrated tweeter!

Having decided I'll do all my corporate interfacing in this way (short-circuit the system, get Marketing on it!) from now on, thought you might also note the suggestion for future.

Maggie @ Snag A Bargain said...

Now that's how you use social media to get the info you need.

Anonymous said...

And I can only assume that the firm in question is XP Power.

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author.  In particular this blog is not directed for investment purposes at US Persons.