My mother has always been a big rule-maker.
I'm the oldest of four girls, and growing up in our house, privileges were frequently doled out according to age. For me, 10 was the magic age that I was allowed to wear slip-on shoes. For my sister Chrissy, 10 represented the joy of -- at long last -- getting her ears pierced.
And so, inevitably, years later when I heard my youngest sister Eileen was wearing clogs in the first grade and Chrissy witnessed our sister Marianne somehow finagling ear piercings at 8 -- there was understandable strife and division in the Korney household. You could make the argument that Chrissy and I still aren't over the injustice of it all even today.
I'm reminded of my mother's dispersal of liberties in the stories out of
And leaks continue to flow from side discussions, which involve up to two dozen former partners who will likely face individual indictments. Their attorneys are talking to the press, making grumblings that they hope their clients aren't made extreme examples out of in order for the larger firm to save face.
In January 2004, KPMG announced Congress was looking into its past tax shelter activities, after a November 2003 report by a Senate Government Affairs Subcommittee showed that KPMG collected roughly $124 million in fees from shelters from 1997 through 2001. Investigators are saying the shelters may have cost the government more than $1.4 billion in taxes.
Word is that the Bush administration doesn't think the profession would benefit from seeing the Big Four reduced to Three, especially when those firms have their hands full juggling auditing work for more than three quarters of the public companies in the country. And the strict auditor-independence regulations put in place under Sarbanes-Oxley would create chaos if KPMG was indicted and eliminated from the delicate balance.
It's a fine line the Securities and Exchange Commission is going to have to walk in the coming months under new Chairman Christopher Cox, determining what is fair and unfair to not only the larger accounting firms, but to the public those firms represent. The SEC has already talked about a contingency plan perhaps allowing KPMG to perform audits while under indictment, or somehow aiding companies that need to move quickly to find a new auditor if KPMG faces charges. My mother would probably talk about special circumstances here, about how times and trends and things in general change over the years.
It was only this past spring, years after the demise of Arthur Andersen, that the courts overturned the former Big Five firm's indictment on a technicality. Even traveling back in time and reversing the ruling, Andersen's future would have been doubtful. But if I was a former partner at Arthur Andersen, one of those KPMG partners who may be facing trial on my own, or even the owner of a small accounting firm who's always followed the straight-and-narrow path in my work -- I'd probably be questioning the fairness of it all.
But, my mother is right, and things do change. Another huge upheaval in the industry and another round of massive resorting of business audits isn't what's best for anyone. I hope KPMG soon accepts its shelter matter mulligan from the SEC, albeit one with a hefty fine and some harsh words, and from here on out everyone really does play the game by the same rules.
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