If you are a team lead doing programming for one of these sorts of companies and the auditors come round with some findings, I promise you that you need to take it deadly seriously. I've seen engineers fired for cause by the board of directors of a fortune 500 for failing to do so. Word gets around and nobody will touch them after that. Its literally career ending to poo poo audits.
Tech companies are really the odd man out here when it comes to audits. Who knows how much longer that will last.
It means delaying or coming up with excuses for why you can't have security concerns remediated within the agreed upon time frame. Regardless of the technical challenges involved.
Audit remediations are not the kind of projects where delays are acceptable. You absolutely must drop everything else you've got going on in those situations if you even remotely get a hint that the project might be behind.
The reason here is that your boss and your bosses' boss can't save you. If bad audit results come back you can bet the C suite had an emergency meeting discussing how to explain them to the board and the timeframe for getting them fixed. And you can bet they made some sort of commitment.
There are hundreds of millions to billions of dollars on the line in insurance premiums and future legal process in some cases. Oftentimes cyber insurance will mandate some kind of timeframe for remediation upon notification of a security issue. So you'll get hit with penalties well before the next audit if you delay. You don't want to be the programmer(s) that missed a deadline there.
You audit accounts that are falsified and give thumbs up: you close shop, are held liable for damages and could go to prison.
Auditing companies are crucially important for a working economy. Bank loans, bonds, equity markets would all be chaos and fraud mayhem without them.
We might as well turn "audits" over to the short sellers like Hindenburg Research, at least they make money by exposing rotten accounts rather than hiding them.
The fact that being an activist short seller has become a business model in the last ~8 years tell you how bad the likes of EY are.
RATING agencies are different from AUDITING companies different from CONSULTANCIES.
Rating agencies were somewhat restructured after 2008 (but are still kind of edgy) - because they did literally write AAA on a piece of paper for money. But there ratings were opinions and had no real legal meaning.
Enron’s problem was the “consulting AND auditing” mess with conflict of interest if I am not mistaken.
Otherwise, I mostly agree, though I don't support a ban. It's a complex topic - companies are free to waste money how they want, and even governments do need real advice. It's just too bad they pick such shitty advisors to support decisions they've already made instead of actually seeking good advice.
OTOH, the monetary penalties where a bit on the light side so maybe that also balances out the rather harsh ban.
It only appeals to hate. Sorry to see it being upvoted.
The comment lacks nuance and is not the level of discussion I’d like to see on HN. It’s very much black and white, Trump-like others would say.
Maybe unintended. But that's what I read into it.
The comment’s missing nuance triggered me. Also the word parasite. I should haven’t replied.
Hardly an appeal to hate.
McK and BCG do consultancy and don’t do auditing.
The one certifies your car is safe on the street and is held liable if they didn’t inspect properly.
The other is a car tuning operation that doesnt certify anything but gives you an edge on the racetrack. Or you hope it does.
By the way, it was KPMG that caught the Wirecard fraud. And KPMG is in the same league and business as EY.
One of the reasons, IMHO, that Wirecard managed to get away with it for so long is, that as a German company, they didn't have to switch Accountants and have another accounting firm helping them in preparing the books. That would be a SOX set-up, and it makes perfect sense. It helps to prevent fraud and it protects retail investors, both of which are good things in my book.
Strategy consulting, the stuff BCG and McK does, is different. As is the outsourcing and consulting Accebture does, which is also different from what McK does. The topic so, is EY and accounting.
Consultancies are not doing that.
I’m not sure why certain businesses should be “banned” because YOU believe they do not add value. Do you pay them? No.
It’s not correct that they are proxies for decision making that mangers don’t want to be responsible for. Neither McK nor BCG could run at the scale they do for five decades if that was the case.
But I suppose that was just your happy Sunday rant of the day to let off some steam.
Yes, whenever they are hired by the public sector. http://recreation.gov is one example in the US I know about.
How is a mismanagement of consultants by public sector entities a justification to “ban” an entire sector?
BCG and McK don’t offer auditing.
At a sufficient level of negligence and authority -- yes.
Say your a large company listed on the stock market, so pick from the four big companies because serious companies use them, who's the CFO an ex-account from the big four who knows their orderand process.
Now if no other companies can enter that bubble, are we really surprised at the outcome!?
We should really consider the present western world as some sort of marriage of corporatism and government - they are really hand in hand as two sides of the same coin.
I was a Deloitte manager.
I know much more people on the IT Consulting side who are in it for the long haul to partner or whatever. The job was also much better than the Audit scene, 80+ hour days in a sweaty conference room and next to no days off.
They both had he same MO, send in the 30s\40s flashy employees who then delegate all the work to 23 year olds. Once the project is in full force they tend to leave and another crew comes in who interfaces with the low cost offshore teams or 23 year olds.
Shure a lot of the leg work is being delegated off to juniors but that is not of substance here.
What you talk about might be happening in smaller shops but not on tier 1 audits inside the big four, there just is too much at stake.
worth mentioning that the complex tax situations are the effect of lobbying of the big four firms in the first place.
“Corporatism” is a model of society in which government, private industry, union, and other power centers are integrated, mutually cooperating, and centrally coordinated. A “marriage of corporatism and government” is just “corporatism”.
(Corporatism is an element of, but not coextensive with, fascism.)
Interesting I just watched a video [1] on consulting yday. It is on something similar happening in the UK. And another video ( couldn't find it ) that suggest unless there are some other interest for these consultant, ( like outsourcing certain function to certain clients ) all they do is to make a case for what the management wanted to do anyway, and rubber stamp on it. And mostly because management wanted something on their CV / resume, so they could move on to another job and repeat the same process again.
They were the big proponent of the the just in time management principles in the hospitals in the Netherlands.
Then when covid came they were the first the market on twitter & linkedin for advice how to improve your health inventory & deal with covid challenges.
Serious impact with zero skin in the game. These consultants are parasites.
They are mainly used as proxies to make decisions managers dont want to be responsible for.