Summary of The Financial Scandal No One Is Talking About

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The Financial Scandal No One Is Talking About summary

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Since the mid-1990s, waves of corporate scandals have pounded economies, with many of the crises tied directly to the improper practices of the global accounting giants. Yet despite the widespread damage from these implosions, the Big Four accounting firms are now bigger and more powerful than ever. Journalist Richard Brooks exposes the shadowy world of corporate accounting, in which an oligarchy preserves itself despite misdeeds and irregularities. getAbstract recommends this stylish narrative to executives interested in an examination of the corporate accounting world.

In this summary, you will learn

  • How the Big Four accounting firms dominate corporate auditing,
  • How corporate accountancy has morphed radically from its foundations and
  • Why this power concentration poses risks to the global economy.
 

About the Author

Richard Brooks is a financial journalist who writes for Private Eye and Accountancy Age.

 

Summary

Today, the Big Four accounting firms of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC) are responsible for reviewing and certifying the accounts of 97% of corporations in the United States, as well as of the 100 largest companies in the United Kingdom. With that much control over the financial engineering and auditing of corporate titans, the sphere of accounting has diverged radically from its roots of being a check on unfettered business activity. Rather than provide critical feedback on dubious practices and misaligned financial incentives prior to the 2008 financial crisis, firms conducted subpar and even meaningless audits of corporate books. Postmortems on Lehman Brothers in the United States and HBOS in Britain noted auditors’ failure to bring critical issues up to management.

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