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Big 4 Accounting Firms Podcast: Accounting Career Tips and Accounting News

We discuss the latest accounting news and accounting career tips on how to succeed at the big 4 accounting firms. Learn the rankings of the largest public accounting firms in the world, big 4 interview tips, big 4 salary details, big four news and career tips. We also discuss other topics like what it takes to pass the CPA exam and how to be a successful accountant. We cover the latest news regarding Pricewaterhousecoopers, Ernst and Young, Deloitte and KPMG.
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Mar 7, 2017

In this episode of the Big 4 Accounting Firms podcast we discuss the raid of one PwC's largest clients, Caterpillar. This episode is brought to you by https://big4accountingfirms.com

Caterpillar had 3 of its building in Illinois raided by three federal agencies on March 2, 2017

The departments conducting the raid were the Internal Revenue Service, the Federal Deposit Insurance Corp. and the US Department of Commerce.

The reason for the raid was caterpillar’s offshore tax practices. This caps what was already one of the worst weeks in PwC’s history. PwC was Caterpillar’s tax advisor for these offshore practices.

In this article we will discuss:

  1.  What Caterpillar had to say about the raid
  2. Some facts about Caterpillar’s current tax position
  3. Why we think the raid happened
  4. If the raid of Caterpillar by the government is justified
  5. PwC’s involvement

PwC’s involvement

PwC is Caterpillar’s independent auditor, but they were also Caterpillar’s tax advisor for the transaction in question for this investigation. PwC was reportedly paid over $50 million for the planning and consulting around the tax advice for this tax haven idea. Those fees have come way down over the years, and Caterpillar no longer pays large tax advice fees. If you look in past 10-k’s, you can see the huge tax planning fees. This was common in the pre Sarbanes-Oxley era. That is probably one of the reasons why the fees for tax advice are no longer significant.

This has huge implications for PwC. If they are found guilty of setting up sham tax transactions by these governmental agencies, Pricewaterhousecoopers could face some harsh punishment and limitations on their tax practice similar to what happened to KPMG.

Visit out blog for more information

https://big4accountingfirms.com/the-blog/caterpillar-raided-and-irs-investigation/

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