The Big Four - Accounting firms under scrutiny | DW Documentary

I am ex-PwC myself and I think another issue that gets overlooked is the pressure on billable hours that is put on all layers from juniors all the way to the senior manager levels. It does happen that junior auditors could be working on multiple engagements due to planning and it's almost like industrial churn. So you end up having junior auditors who are inexperienced and yet they don't get proper mentorship from their seniors and on top they are too far removed from the business to truly understand how it operates. As a result they don't really know what to look out for when on the field. You end up with a culture of "just get on with the work program so that my manager sees that I ticked off all the right boxes, get a good end of assignment evaluation and then move on to the next" In parallel, managers are exhausted from checking the work papers of several auditors on different engagements and this could lead to confusion etc. A full overhaul is needed from top to bottom in the Big-4 as there are just too many scandals with their involvement, that just seem to go off either unpunished or lightly punished with a slap on the wrist.

"A public auditor does not need to be an angel they should only be an independent". Precisely and well said!

DW is doing some really good stuff right now. Well done.

I am a retired Chartered Accountant. I was aware of such conflicts during my time with the big firms, indeed I was once denigrated as "a delving auditor." Even before that, during my training, there was discussion of "The Audit Expectation Gap." The near impossibility of detecting high level fraud, if carried out by one or more determined offenders. Detection was doubly difficult if external parties colaborated in the crimes. Well done DW. This issue needs to be followed-up in every country.

Writing the rules and then advising companies how to get around he same rules.

They have conflicting interest, they supposed to be auditing at the same time giving consultancy services. They are advisers to governments forming policies then advising corporations to exploit the loopholes. Excellent documentary.

The problem is that these firms often have extremely greedy partners who overwhelm those actually performing the audit by having too few staffed and spreading them on multiple audits. This way they can keep more of the fees for themselves instead of staffing audit engagements appropriately.

Here in Brazil PwC has fallen under scrutiny for, once again, not being able to identify a 20 billion accounting problem in a brazilian company. It made me go back to this documentary and watch it once again because i can't believe how these auditing firms can still work without being punished properly for the demaging consequences of not doing their jobs correctly.

Great reporting. Behind these companies are individuals making decisions. Hold those at the top accountable with serious consequences. This goes for the auditing firms as well as their client corporations engaging in criminal activities. There’s no point in penalizing companies when the executives leading them can retire with enormous severance packages. If people are actually held accountable, more would think twice about trying the same.

I work with auditors from all 4. They hire cheap labor in recent years and they seem to be overwhelmed and rush through audits the very last minute.

DW doing a service to humanity with these free documentaries

I worked in the tax department of a large US bank in the '90s. As I recall, the bank had around 500 US subsidiaries and 400 foreign subsidiaries. There are probably thousands today. I don't think audits are realistic anymore. Bidding for audits is competitive. CPA firms have an interest to cut costs. The auditors earn large fees. Accordingly, there is no independence -- just conflict of interest.

Lmfao, if the Auditors working 80 hours per week for $60k per year right out of college saw this documentary calling them "THE PINSTRIPE MAFIA", they might smile for the first time this busy season. If you want to know why an audit might go wrong, just picture this: You have one guy in his 50s, the Partner, who is making all of the money and "overseeing" the engagement. He has a guy in his 30s or 40s, the Manager, directly under him and managing the audit of the client from the accounting firm's office. The Manager keeps in contact with the Senior, a lower level manager, usually 25 to 30 years old, who is on-site at the client babysitting a small team of fresh college graduates who are working 70-90 hours per week, overworked, and sleep-deprived. The fresh graduates have to fake it until they make it, so they all just follow the principle of "SALY" (Same As Last Year), essentially copying the work that was done last year and rolling the numbers forward. All of the work is done by fresh college graduates and the seasoned professionals just sign off on the work. After 1 or 2 busy seasons, most fresh graduates quit for other jobs and the ones who stay become Seniors, Managers, and Partners. It's truly miserable work, I remember sitting there in my first busy season thinking "so this is what the rest of my life is going to be like?" Lmao. I understand all of the conflict of interest stuff they're talking about in the documentary, but the ones doing the work are fresh graduates who don't even think about those things, they're just overwhelmed with the task in front of them.

Much needed program, for years I have said this to anyone that would care to listen, auditors know that there are three areas that they need to look into 1) errors and omission mistakes 2) fraud 3) management override of controls. Mistakes and omission errors generally have the least impact on the value of an organisation, yet this is the greatest focus of auditors, followed by fraud, so attention by auditors, but management override of controls causes the greatest loss of value, yes, even grater than fraud because without management override of controls any fraud cannot be hidden until and unless the organisation has poor internal controls to begin with (internal could also been deliberately kept lax by management to enable concealment later. Yet, most auditors are not trained in identifying management over ride of controls, in fact many auditors are not even aware there this such a thing.

They didn't verify the bank balances and simply trusted a trustee when they said the money was there. 1/3 of this German company's cash was with a trustee in the Philippines. This is pretty negligent. No new laws are needed. Auditing cash is not that hard. Just enforce the existing laws and accounting practices and take away EY's ability to audit German companies for a few years. Watch how quickly things change when you enforce all the laws already in place.

I worked in audit firms for 7 years. Until today, I do not trust "audited account". Audit report is more of a "discharge of liability" rather than a report of examinations and checks (audit as it is called professionally)

Outstanding quality of documentaries as usual. DW is the way to go 👍🏼

Very good watch. Thank you! The importance of journalism cannot be understated.

This happened right as I was interning and it was when I first realized my big4 job wasn’t as idealistic as I thought

I think audit has become more related to pretty documents rather than actual testing. You cannot check someone and say they might be wrong when you are getting your revenue/income from the same person!