SEC to get a new Chief Accountant

Wesley R. Bricker to take over as Chief Accountant of the US SEC after the retirement of the current Chief Accountant James Schnurr.

Weatherford update

Weatherford International announced the sudden exit of it’s CEO Bernard Duroc- Danner. The move though sudden is not unexpected. Recently the company settled with SEC on deceptive accounting charges. The company had overstated its results to meet its earlier announced projections and analyst’s expectation.

In light of that, it would make sense for the company’s CEO to leave, wouldn’t it?

£4 million fine for misconduct

The accounting watchdog in England, Financial Reporting Council, found that misconduct by Deloitte led to the collapse of Aero, an aircraft parts wholesaler. The misconduct cost Deloitte £4 million! The fine is the highest recorded by the FRC for misconduct of a firm. This definitely is a message to the audit firms to adhere to the highest standards and know that they are being watched.

Aero at one point was a favorite of the London’s junior market. But after the accounting irregularities were discovered the company’s banks pulled their findings leading to the collapse of the company. The accounting issues interestingtly were found when the company was readying to move to the main market of the stock exchange. During the due diligence auditors raised questions about the book value of its stock and the physical quantities it held. Deloitte that had been the company’s auditor had given the company unqualified opinion during the years in question (2006-2008)!

Deloitte’s response was a classic, “Our audit quality processes have evolved significantly since these audits were performed between 2006 and 2008, and we are relentless in our focus to ensure all our audits are of the highest quality.” Does this mean that all audits the company undertook during the period were substandard audits!

Exercising on slot machines

exercise photoJazzercise, a physical fitness company, have filed a case against their former finance director, Sherri O. Potts, who was stealing from the company. Sherri is charged with 50 theft related charges including forgery, fraudulent appropriation and grand theft by an employee. If convicted she could spend over 40 years behind bars.

Over the decade of her employment, Sherri embezzled over $1 million from her employer. She would siphon off funds from the petty cash account. She would ask that $13,000 be delivered every month for petty cash, when the actual petty cash usage for the company per month was around $2,000. The amount left after actual payments would be pocketed by her. She would destroy the receipts, manipulate the accounting software and delete records that would track petty cash. She also forged checks (48 per the investigation) from the personal accounts of the owners of the company to pay herself. The forged checks were for over $150,000.

She used the cash to pay her personal bills, travel, shop and above all gamble. She gambled more than $900,000 a year in slots from 2008- 2013!! Must be exercising her arms on the slots!