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https://pluralistic.net/2024/01/26/noclar-war/#millionaire-on-billionaire-violence>
"One of the weirdest aspects of end-stage capitalism is the collapse of
auditing, the lynchpin of investing. Auditors – independent professionals who
sign off on a company's finances – are the only way that investors can be sure
they're not handing their money over to failing businesses run by crooks.
It's just not feasible for investors to talk to supply-chain partners and
retailers and verify that a company's orders and costs are real. Investors
can't walk into a company's bank and demand to see their account histories.
Auditors – who are paid by companies, but work for themselves – are how
investors avoid shoveling money into Ponzi-pits.
Attentive readers will have noticed that there is an intrinsic tension in an
arrangement where someone is paid by a company to certify its honesty. The
company gets to decide who its auditors are, and those auditors are dependent
on the company for future business. To manage this conflict of interest,
auditors swear fealty to a professional code of ethics, and are themselves
overseen by professional boards with the power to issue fines and ban cheaters.
Enter monopolization. Over the past 40 years, the US government conducted a
failed experiment in allowing companies to form monopolies on the theory that
these would be "efficient." From Boeing to Facebook, Cigna to Inbev, Warner to
Microsoft, it has been a catastrophe. The American corporate landscape is
dominated by vast, crumbling, ghastly companies whose bad products and worse
corporate conduct are locked in a race to see who can attain the most depraved
enshittification quickest.
The accounting profession is no exception. A decades-long incestuous orgy of
mergers and acquisitions yielded up an accounting sector dominated by just four
firms: EY, KPMG, PWC and Deloitte (the last holdout from the
alphabetsoupification of corporate identity). Virtually every major company
relies on one of these companies for auditing, but that's only a small part of
corporate America's relationship with these tottering behemoths. The
real
action comes from "consulting."
Each of the Big Four accounting firms is
also a corporate consultancy. Some
of those consulting services are the normal work of corporate consultants –
cookie cutter advice to fire workers and reduce product quality, as well as
supplying dangerously defecting enterprise software. But you can get that from
the overpaid enablers at McKinsey or BCG. The advantage of contracting with a
Big Four accounting firm for consulting is that they can help you commit
finance fraud."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
