Pricewaterhouse Ads Criticized In Light of SEC's Tyco Ruling
Would the real PricewaterhouseCoopers LLP please stand up?
Seeking to restore public confidence in its audits, the nation's largest accounting firm for several months has been waging a marketing campaign promising to get tough on companies' accounting practices and to walk away from clients that don't get in line.
"Principles have no loopholes," the firm declared in an April full-page national-newspaper ad, under the anthem "stand and be counted." Other full-page ads have run under the headings "truth as a business opportunity," "integrity 101, education for the public trust," and "building public trust, a status report."
Yes, this is the same auditor that for months allowed Tyco International Ltd. to avoid a financial restatement. If ever there was a PricewaterhouseCoopers client that needed its feet held to the fire, some investors long have bemoaned, it is Tyco, one of the poster children for accounting misbehavior during the recent era of corporate scandals. And now that the Securities and Exchange Commission has, in effect, overruled PricewaterhouseCoopers by deciding a Tyco restatement is necessary, the campaign's slogans ring hollow to some critics.
For months, several outside accounting specialists publicly had been saying that Tyco's need for a financial restatement was obvious, pointing to the SEC's published guidance on when restatements are required. PricewaterhouseCoopers insisted a restatement wasn't needed. Instead, it agreed with Tyco's new management that the appropriate step to correct past misstatements was to take charges to earnings that whacked recent results by about $2 billion but left prior fiscal years' earnings untouched.
This week, Tyco released its restated results going back to 1998, following its June announcement that the SEC had insisted on a restatement. That includes restating the 2002 books that PricewaterhouseCoopers had vetted extra carefully in the wake of a management scandal that rocked the Bermuda-registered conglomerate last year.
A PricewaterhouseCoopers spokesman says the firm's actions are consistent with its ads. "The Tyco restatement deals with complex issues that are matters of judgment," says David Nestor, a firm spokesman. "It is easy for people who are not privy to all of the facts to second-guess our decisions. In this case, we and the company did not believe that a restatement was necessary. After discussions with the SEC, the company agreed to the restatement. We support that decision. Accounting is not a science. It requires judgments, and professionals can reach different conclusions. When we have determined that a restatement is necessary, we have and will continue to require clients to do so. Accordingly, we believe our actions are totally consistent with our advertising."
One of the critics who pointed out the need for Tyco's restatement, Georgia Institute of Technology accounting professor Charles Mulford, says the accounting firm's actions belie its recent talk. "If the Tyco case is any indication, it would sound like it's business as usual," he says. "They should have called it as it was at the time, and they didn't." The firm's integrity, he says, "is taking a hit as a result." Other critics who had been outspoken about the need for a restatement include Abraham Briloff, professor emeritus at Baruch College, and former SEC Chief Accountant Lynn Turner.
For PricewaterhouseCoopers, the recent ad campaign has marked an attempt to put past problems behind it and assume a leadership stance on matters of accounting and corporate governance. Those past problems have included botched audit work at one-time technology darling MicroStrategy Inc. and SEC findings in 2000 that hundreds of partners held investments in various firm audit clients. In last month's ad, the firm said: "Equally important is that those who audit the financial statements of public companies have more than just the knowledge to do the right thing. They must also have the courage and the integrity to do the right thing."
Mr. Mulford says the need for a restatement should have been obvious to PricewaterhouseCoopers and Tyco based on a reading of the SEC's 1999 staff accounting bulletin on the issue of "materiality." The standard under the accounting rules long has been that a restatement is required if errors would have been material to prior periods' earnings. Mr. Mulford says the sheer size of Tyco's accounting misstatements made the need for a restatement reasonably clear.
Additionally, the bulletin says that if a company's accounting practices were intentionally misleading "to impart a sense of increased earnings, a form of earnings management, then by definition amounts involved would be considered material." In May, Tyco's new chief executive, Edward Breen , said he had a "zero-tolerance policy here regarding the type of conduct that has given rise to some of the charges" and that he planned to fire "a number of people ... because of the issues we identified."
哪个才是真的普华永道？
究竟哪个才是真的普华永道(PriceWaterhouseCoopers LLP)？
为了恢复公众对公司审计能力的信心，美国最大的会计公司普华永道数月来一直在打一场市场营销战，承诺严格会计操作，摆脱那些不符合规范的客户。公司今年4月在一家全国性报纸上刊登整版广告称："会计准则没有漏洞"，其他整版广告标题则分别为"诚实就是商业机会"及"树立公众信任"。
是的，这和几个月来一直准许泰科(Tyco International Ltd.)不必重报财务报表的普华永道的确是同一家公司。如果普华永道一定要有一个客户必经此劫的话，投资者都认定，那一定就是泰科，这个因不当会计操作而跻身近期公司丑闻排行榜之中的公司。现在美国证券交易委员会(Securities and Exchange Commission, 简称SEC)否决了普华永道的做法，裁定泰科必须重新公布此前会计期间的财务报表。这令普华永道上述洋洋洒洒的广告语在某些批评家看来未免有欠诚恳。
几个月来，数位外部会计专家一直在公开表示，泰科重新公布财务报表的必要性无庸置疑。普华永道则坚持重报收益没有必要，表示赞同泰科新的管理层提出的解决方案：即计入大约20亿美元支出，冲减目前会计期间利润，而维持此前会计期间收益不变，认为这才是改正此前错误的合适方式。
泰科于本周重新公布了追溯到1998年的财务报表，6月时该公司曾宣布，SEC坚持要求公司重新公布财务报表。公司此次重新公布财务报表中包括2002年财务报表，这可是在当年管理丑闻使泰科陷入风雨飘摇之后，普华永道倍加小心审计的财务报表。
普华永道的发言人大卫?奈斯特(David Nestor)称，普华永道的所作所为与广告还是一致的。他说，泰科重新公布财务报表是一个复杂的涉及个人判断的问题，那些与此事无利害关系的人很容易在事后对公司的决定妄加评论。在这件事上，普华永道和泰科均认为没有必要重新公布财务报表。泰科在与SEC商讨之后同意重新公布财务报表。普华永道支持该决定。 奈斯特称，会计不是一门科学，它需要借助人的判断，不同的专家通常会得出不同的结论。如果普华永道认定有必要重新公布财务报表，那么公司会坚持要求客户采取相应行动。因此，普华永道认为自身的所作所为与广告是完全一致的。
乔治亚理工学院(Georgia Institute of Technology)会计学教授查尔斯?马尔福特(Charles Mulford)是批评家之一，他认为泰科有必要重新公布财务报表。他称，普华永道的行为与公司最近的言论背道而驰。泰科事件对普华永道诚信造成打击。
其他批评家也纷纷表示泰科需要重新公布财务报表。其中包括Baruch College荣誉教授亚伯拉罕?布瑞尔奥佛(Abraham Briloff)及前SEC首席会计师林恩?特纳(Lynn Turner)。
对普华永道来说，最近的广告活动表明公司试图将过去的种种问题抛在身后，并对会计及公司管制问题采取绝对行家的态度。这些过去的问题包括：对曾为科技宠儿的MicroStrategy Inc.糟糕的审计工作及2000年SEC发现普华永道数百个合伙人投资于其审计客户。普华永道在上个月的广告中称，对那些审计上市公司财务报表的审计师来说，拥有专业知识以外的某些素质显得同样重要，这些审计师需要勇气和诚信才能做好审计工作。
马尔福特称，根据SEC 1999年针对会计"实质性"问题所发表的员工会计公告(staff accounting bulletin)，普华永道和泰科重新公布财务报表的必要性显而易见。根据会计规则，如果发现会计错误对此前期间收益有实质性影响，则必须重新公布这些期间的财务报表。马尔福特称，泰科会计问题的严重程度明显说明，重新公布财务报表很有必要。
另外SEC的公告还称，如果一家公司利用会计操作蓄意提高收益，则根据规定这将被视为实质性影响。5月份泰科新任首席执行长艾德华?布润(Edward Breen)称，他对导致指控的一些行为忍无可忍，并打算开除某些人。
