Freddie Mac's Charity Case
For some accountants, maybe charity shouldn't begin at the office.
Giving back to the community may be a noble calling. But when charitable work involves locking arms with an audit client, potential conflicts of interest can arise, some accounting specialists say. That is especially the case when an auditor heads up a charity whose largest private donations come from the philanthropy of the company he audits.
A case in hand: the volunteerism of a former Arthur Andersen LLP partner, Robert G. Arnall, who for seven years was the top outside auditor responsible for Freddie Mac's financial-statement audits. At the same time he was the company's auditor, he also was a member of the board of trustees for one of Freddie Mac's favorite charities, which receives a large portion of its private donations, though a small portion of its overall revenue, from the philanthropy of Freddie Mac. Eventually, this auditor became the charity's chairman.
Freddie Mac, which recently fired its top three executives after admitting to improper accounting practices that require a massive financial restatement, replaced Andersen with PricewaterhouseCoopers LLP last year as Andersen's woes over Enron Corp. engulfed the firm.
Freddie Mac and Andersen say the auditor's charity work didn't tarnish the audits in any way. The partner's service "as a volunteer for an organization to which we give a tiny amount of our contribution budget, and to whom we represent a tiny amount of their total revenue, does not present a conflict," says David Palombi, a Freddie Mac spokesman. "I don't think it had an impact at all on an audit for Freddie Mac," adds Andersen spokesman Patrick Dorton.
But some auditing specialists caution that an auditor who puts himself in this kind of situation creates an appearance of conflicting interests and impaired objectivity.
Mr. Arnall became vice chairman of the board of the Phillips Programs for Children and Families in June 1999. He served as chairman of the Annandale, Va., charity's annual fund-raising gala in 2000, an Andersen spokesman says. He became chairman of the group's board in June 2001. When Mr. Arnall joined the board, he replaced an Andersen tax partner who worked on Freddie Mac's account.
Mr. Arnall, now an audit partner at Ernst & Young LLP's McLean, Va., office, declined to comment for this article.
Sally Sibley, chief executive of the Phillips Programs, says Mr. Arnall didn't solicit donations from Freddie Mac himself, and the Phillips Programs didn't need him to because Freddie Mac had been a major donor for so many years before. "We knew the people at Freddie Mac long before I knew Rob Arnall," she says. "I'm telling you that the connection with Rob with Freddie Mac has nothing to do with our donations from Freddie Mac."
The government-sponsored mortgage financier, of McLean, Va., and its philanthropic foundation contributed $75,425 to the Phillips Programs in the fiscal year ended August 2001 and $95,081 in fiscal 2002, according to the charity. Those figures represent about 30% of the $556,205 in total private contributions that the Phillips Programs received during those two years, according to its annual Internal Revenue Service filings.
Including gifts from its foundation, Freddie Mac was the Phillips Programs' largest private contributor for the two years, the charity's chief executive says. The charity operates schools and other programs for disadvantaged children. For fiscal 2002, Phillips reported $14 million of total revenue, $13.6 million of which came from "program service revenue including government fees and contracts," according to its IRS return.
According to the charity's two most recent annual reports, the board's vice chairman is a Freddie Mac vice president. Leland Brendsel, who last month was ousted as Freddie Mac's chairman and chief executive and then resigned as chairman of the Freddie Mac Foundation, is a Phillips "honorary trustee." Freddie Mac executives occupied four of the 15 seats on the Phillips Programs executive committee, including the committee's chairman post, the charity's 2002 annual report shows.
There are no rules that expressly would have prohibited Mr. Arnall from serving in his two roles simultaneously. Still, some provisions in the American Institute of Certified Public Accountants' code of conduct suggest that auditors should avoid similar predicaments. The problem, some auditing specialists say, is that such relationships between an auditor and an audit client -- no matter how well intended -- don't mesh with an auditor's fiduciary responsibility to act as a watchdog over a company's management.
Most notably, one section of the AICPA code says an accountant should avoid serving on the board of a bank that has significant transactions with an audit client, notes Dan Guy, a Santa Fe, N.M., author of several books on auditing standards and a former AICPA vice president. In that spirit, he says, an accountant also should avoid serving on the board of a charity that receives significant donations from an audit client.
As Freddie Mac's auditor, Mr. Arnall's dual roles placed him "in a situation where he might be inclined to pull punches, because he wants the contributions from the big contributor to continue to flow," Mr. Guy says. "Because of this situation, the partner is not independent, and therefore the firm is not independent."
Mark Joiner, a CPA and director at the Albuquerque accounting firm Atkinson & Co., says such volunteer work by an auditor likely wouldn't have triggered scrutiny only a few years ago. But that was before Enron and so many other companies blew up over accounting scandals. "I don't think any right-minded audit partner would do it today," says Mr. Joiner, whose firm audits several nonprofit organizations.
Conflicts of interest arising from corporate watchdogs' charitable endeavors have surfaced at a handful of companies since Enron's 2001 collapse. However, the emerging controversies typically have centered on the roles of corporate directors. One reason why auditors' potential conflicts may have escaped public attention is that U.S. accounting firms only sign the firm's name to audit-opinion letters, not the names of individual partners.
The Andersen spokesman, Mr. Dorton, adds that the Washington area has a fairly small business community, and overlaps on charitable boards between executives at big accounting firms, law firms and corporations are inevitable. "This charity effort was completely separate from any work done by the accounting firm, and really part of a long tradition, dating back to Arthur Andersen himself, of partners being involved in the community," Mr. Dorton says.
From 1997 through 2002, the Freddie Mac Foundation gave Phillips $320,970, while Freddie Mac, which began donating money to Phillips in 1999, gave $45,920, according to Mr. Palombi, the Freddie Mac spokesman. For the year ended Dec. 31, 2001, Freddie Mac and its affiliated foundation gave about $30 million to charitable causes, according to the foundation's 2001 annual report.
Mr. Palombi says Mr. Brendsel first learned about the Phillips Programs at a meeting of local business leaders in the late 1980s. The introduction prompted him to launch Freddie Mac's foundation. Phillips was the foundation's first philanthropic effort, Mr. Palombi says. Freddie Mac employees volunteer as buddies and pen pals for students at Phillips's schools, which serve children with behavioral, emotional and learning problems. They also help organize events, like Special Olympics. Freddie Mac calls the relationship with Phillips one of its three "business-school partnerships."
Major contributors to Phillips in fiscal 2002 included PricewaterhouseCoopers and Deloitte & Touche LLP (the U.S. arm of Swiss-based Deloitte Touche Tohmatsu), which donated $25,000 and $10,000, respectively. Smaller contributors included Mr. Brendsel and other Freddie Mac executives.
Ms. Sibley, the chief executive of the charity, says Mr. Arnall's selection two years ago as chairman of the Phillips board of trustees had nothing to do with Mr. Arnall's ties to Freddie Mac. Freddie Mac's involvement with the charity dates to 1988. An Andersen representative joined its board the following year.
Mr. Arnall wasn't a member of the audit team assigned to the Freddie Mac Foundation. Andersen, which has ceased nearly all operations, was the foundation's auditor from 1999 until last year.
Freddie Mac的善行令人怀疑
对于一些会计师而言，开展慈善活动或许应当回避其职权范围。
回馈社会可能算是一种高尚的事业。但是，一些会计行业的专家指出，如果慈善活动与审计客户之间的关系密切，就有可能产生潜在的利益冲突。特别是当一位会计师负责著一个慈善机构，而这个慈善机构获得的最大一笔私人捐助恰恰来自于其负责审计的公司时，这一问题就显得尤为突出。
我们手头就有这样的一个例子：前安达信会计师事务所(Arthur Andersen LLP)的合夥人罗伯特．阿纳尔曾负责联邦住房贷款抵押公司(Federal Home Loan Mortage Corporation, Freddie Mac)的外部审计工作长达7年之久，而就在他担任该公司审计师期间，还兼任该公司赞助的最主要的一家慈善基金的受托理事会成员，最后还出任了该基金会的理事长。该基金会得到联邦住房贷款抵押公司的大笔私人捐助，尽管上述慈善支出只占该公司总体收入的一小部分。
联邦住房贷款抵押公司已于去年宣布由普华永道(PricewaterhouseCoopers LLP)取代安达信，负责其外部审计工作，这主要是因为安达信在安然(Enron Corp.)审计事务中存在重大问题而连累到联邦住房贷款抵押公司。该公司最近在承认存在违规会计操作后解雇了三名高层管理人士，并表示需重新发布财务报告并作出大幅修正。 联邦住房贷款抵押公司和安达信均表示，罗伯特．阿纳尔参与慈善工作丝毫没有对该公司的审计工作产生影响。该公司的一位发言人戴维．帕罗比(David Palombi)称，公司从捐赠预算中拿出少量资金捐助给一家慈善机构，而这些资金只占该机构全部收入中的一小部分，这位合夥人只是为这家机构提供服务一位自愿者，这样不会产生利益冲突。安达信的发言人帕特里克．多顿(Patrick Dorton)则表示，他认为这不会对联邦住房贷款抵押公司的审计工作造成任何影响。
然而，一些审计行业的专家警告称，如果一位审计师参与类似活动，就会给人造成存在利益冲突并影响客观公正的印象。
安达信发言人称，阿纳尔于1999年6月出任菲利普斯儿童和家庭项目(Phillips Programs for Children and Families)基金会副理事长，并在该基金会2000年举行的盛大募捐活动中担任理事长，他于2001年6月出任该基金会理事长。在阿纳尔加入该理事会后，他取代了联邦住房贷款抵押公司的会计事务的税务合夥人。
目前担任安永会计师事务所(Ernst & Young LLP)审计合夥人的阿纳尔谢绝就本文所述情况发表评论。
菲利普斯项目(Phillips Programs)的首席执行长萨利．希伯雷(Sally Sibley)称，阿纳尔本人并未参与向联邦住房贷款抵押公司募捐，而且菲利普斯项目也不需要他参与募捐活动，因为，过去许多年来，联邦住房贷款抵押公司一直是一个主要的捐赠人。她表示："我们认识阿纳尔之前很久就认识联邦住房贷款抵押公司的那些人了。"她的意思是，阿纳尔同联邦住房贷款抵押公司之间的关系同菲利普斯项目获得该公司的捐助没有任何关系。
联邦住房贷款抵押公司是联邦政府提供支持的抵押融资公司。菲利普斯项目基金会提供的数据显示，截至2001年8月份的财政年度，该公司共向菲利普斯项目捐助了75,425美元；在2002财年，共向该项目捐助了95,081美元。菲利普斯项目向美国国税局(Internal Revenue Service)递交的报告称，上述资金约占菲利普斯项目在过去两年获得的总额556,205美元私人捐助的30%。
该菲利普斯项目首席执行长称，包括联邦住房贷款抵押公司基金会捐赠的礼品在内，该公司是菲利普斯项目过去两年以来最大的捐增方。菲利普斯项目开办了学校并开展了其他一些项目，用于资助贫困儿童。美国国税局的回复报告显示，2002财年，菲利普斯项目公布总收入1,400万美元，其中1,360万美元来自包括政府资金和合同项目服务收入。
菲利普斯项目基金会的两份最近的年度报告显示，该基金理事会副理事长由联邦住房贷款抵押公司的副总裁担任。上月被该公司免职的董事长和首席执行长、并随后辞去联邦住房贷款抵押公司基金会会长的勒兰德．布兰德瑟(Leland Brendsel)是菲利普斯项目基金的名誉受托人。菲利普斯项目基金会提供的年度报告显示，联邦住房贷款抵押公司的管理人士占据了该基金会执行委员会的15个席位中的4个，其中包括该委员会会长一职。
尽管没有明确的规则禁止阿纳尔同时担任上述两个职务，但是，美国注册会计师协会(American Institute of Certified Public Accountants)的行为准则提出，审计师应当避免可能处于类似的尴尬境地。审计行业的专家称，问题在于，审计师和审计客户之间的上述关系，不管出于多么良好的动机，都是同审计师担当的对一家公司管理层进行监督的职责格格不入的。
尤其应当指出的是，美国注册会计师协会前副会长丹．盖伊(Dan Guy)称，美国注册会计师协会行为准则的某个章节专门规定，会计师应当避免在一家同审计客户有著重要业务往来的银行董事会任职，而且，会计师也应当避免在一家可能获得审计客户重大捐助的慈善基金理事会任职。
而作为联邦住房贷款抵押公司审计师的阿纳尔使自己处于一种可能受到严重抨击的境地，因为他希望继续获得来自大的捐赠方的捐赠款项。正是由于处于这样一种地位，其作为审计公司合夥人的独立性就难以保持，因而其所在的审计公司的独立性也难以保持。
