Professional Services Monitor: Today


April 15, 2009

Institutional Investor Magazine Ranks Investor Relations Departments

Filed under: Branding — psmtoday @ 9:06 am

Institutional Investor Magazine has released a study ranking investor relations departments based on surveying buy-side and sell-side portfolio managers and analysts.  While the online article doesn’t provide the exact questionnaire used, it appears that they essentially asked these analysts which companies were forthcoming and helpful in their investor relations functions.

Winners are divided by category and sector. For example, in the Financial Institutions category, Large-Cap Banks sector, JPMorgan Chase, Citigroup, and Bank of America go 1-2-3 among buy-side analysts.

April 8, 2009

Auditor Market Share Lists: Audit Fees Increase/Decrease

Filed under: ARGI,Firms,KPMG — psmtoday @ 12:47 pm

Two more lists have been added to our Auditor Market Share Lists.  These lists provide the 10 companies with the largest increases and decreases in total audit fees, among proxy filers in March 2009.

These 20 companies were taken from more than 1000 proxies filed during March.  The average increase in this group was about 6.1%.

KPMG clients, for one, have an average increase of 10.9%.  Boise Inc., a KPMG client, had the largest increase in fees at more than 1500% between FY2007 and FY2008, although McGladrey was Boise’s auditor for FY07.  Furthermore, as notes, Boise Inc. “was formed in 2008 when Aldabra 2 Acquisition Corp. purchased the paper and packaging assets of Boise Cascade.”  Synovus Financial was the KPMG client with the largest decrease, -60%.


April 2, 2009

New Century Trustee Files Suit Against KPMG

Filed under: Firms,KPMG,Liability — psmtoday @ 12:12 pm

KPMG is being sued for “no less than $1 billion in compensatory and consequential damages” by the bankruptcy trustee for New Century Financial.

The trustee overseeing the bankruptcy of subprime lender New Century Financial Corp. filed suit against its auditor, KPMG LLP, claiming that “reckless and grossly negligent audits” helped accelerate the firm’s collapse two years ago.

The lawsuits filed Wednesday said that specialists at KPMG tried to point out errors in New Century’s financial statements but were silenced by the KPMG partner in charge of the audits “to protect KPMG’s business relationship with, and fees from, New Century.”

Francine McKenna, of Re: The Auditors fame, is quoted in the story, saying that if the suit is successful, “it may embolden others to look more closely at the possibility of bringing [accounting] firms to some level of culpability for the things that happened” that led to the credit crisis.

KPMG spokesman Dan Ginsburg said, “KPMG acted in accordance with professional standards in New Century, and we will vigorously defend our audit work. Any implication that the collapse of New Century was related to accounting issues ignores the reality of the global credit crisis. This was a business failure not an accounting issue.”

New Century disclosed a total of $10.4 million in fees between fiscal 2002 and 2005.

Fiscal Year Audit Fees Total Fees Fees-to-Revenue
2005 $2,319,347 $3,808,781 0.16%
2004 $1,783,100 $3,576,708 0.21%
2003 $705,900 $1,625,959 0.17%
2002 $355,000 $1,450,000 0.24%