[tcrlaf]

Tough luck....

The mid-90’s legislation that allowed banks to buy the auditors was the WORST financial legislation to come out in DECADES........

It led to some of the biggest Corporate debacles in history, with the supposedly neutral auditors overpowered by the banking side which wanted the commisions.

Which wins?
the $3 million audit contract?
Or the $500 million in commissions from the derivitive sales?

[Asclepius]

KPMG, the accountancy firm, told the US Justice Department that it would unleash a “nuclear bomb” that would leave more than 1,000 companies without an auditor, if it indicted the firm for selling fraudulent tax shelters, according to newly released internal documents.

Say, what?! This is what you would expect a Bond villain or Lex Luthor to say. What legal theory supports an argument like this? Indict us and we will bring down the industry. So whatever unlawful behaviour was uncovered should be allowed to stand? So: The firm may act and continue to act with impunity because it is holding a sector of the financial services industry hostage?

What am I missing here? How is this even possible? This sounds more like an attempted coup than a legal brief.

[sourcery]

The rich and powerful favor "progressive" tax rates (that make it difficult to become rich in the first place,) but also favor loading the tax code up with deductions from which only the rich can benefit (a.k.a., "tax shelters.") The result is that those already rich can escape the worst effects of the confiscatory tax rates.

The best way to prevent this deadly combination is to totally eliminate all deductions. The top rates would fall faster than Michael Moore in an intense gravitic field.

[MonicaG]

Big 5, Big 4, Big 3, Big 2...

(watch out PWC!)

[nyyankeefan]

KPMG warned of ‘death spiral’ in tax shelter fraud case maybe these giant accounting firms should be downsized and broken up....with all the tax laws....all the workers will still have jobs...but might have to be more honest if not shielded behind the corporate shields!!! honesty in accounting.....ok...myabe a pipe dream...what next ...lawyers becoming honest/telling the truth also???

[Caipirabob]

KPMG, the accountancy firm, told the US Justice Department that it would unleash a “nuclear bomb” that would leave more than 1,000 companies without an auditor

Any corporate employee subjected to the tyranny of SOX compliance would consider this a blessing from Heaven.

Then again, the thought of establishing a rapport with a whole new group of auditors isn't pleasant, either.

[Bernard]

A long time ago, public accounting firms, just like law firms, were required to be straight partnerships (not LLP's), and the most intelligent reason behind that was that these professions hold an enormous public trust - if they don't follow the rules, who will?

And, in a straight partnership, each partner is responsible for policing the behavior of every other partner. That was the best way to ensure that firms did not tolerate bad behavior.

With the evolving ability to shelter your personal situation from the group, the emphasis shifted from ensuring that the group behaved well to covering your personal well-being from the group punishments. That led to acceptance or tolerance of bad behavior, as long as you would not get caught and punished.

And that is where the trouble with professional firms started. Everything after that is a detail.

[Freeport]

Looks like companies will just have to go around the block & hire a local firm... Funny that...

This is so a non-threat I wonder how loud the feds laughed!

[texas booster]

Nothing will happen to them.

KPMG has been actively recruiting gays and lesbians and their counterparts in the Justice Dept will do nothing to hurt those health benefits.

Some of those tax shelters destroyed Jenkins and Gilcrest, a 100 year old law firm with a great conservative reputation. A few flaming cheetos in Chicago brought the entire 400 lawyer firm to its knees in less than three years.

The Most Ethical Administration in History has screwed the American public again, years after they left town. What a legacy.

[SeaHawkFan]

The documents, although several years old, have only just come to light as part of a criminal investigation into 18 former KPMG partners accused of orchestrating the tax shelters. They are awaiting trial in September on charges of cheating the US Treasury out of at least $2 billion, in what the US Government has labelled America’s biggest ever criminal tax case.

Now only five defendants:

13 defendants dismissed