Some Accountants Got Caught in the Revolving Door

If you work at a regulator, and you would like a more lucrative job at a company that you regulate, what should you do? How should you regulate, in order to make yourself as attractive a hire as possible? I have argued that, if your goal is to move to the other side, you should be an especially tough and vigilant regulator. On the one hand, every employer prefers to hire diligent ambitious go-getters, so being a diligent ambitious go-getter as a regulator sends a good signal to prospective employers. On the other hand, regulated companies may prefer not to be regulated by tough regulators -- but that is all the more reason to hire you. That way you'll stop regulating them!

Yesterday's Securities and Exchange Commission enforcement action (and the related federal criminal prosecution) against six accountants provides at least a little support for that view.1516729395767 Brian Sweet worked at the Public Company Accounting Oversight Board, a regulatory agency in charge of examining accounting firms for deficiencies in their audits. Specifically he was responsible for inspecting KPMG LLP's audits for deficiencies. He found a lot of deficiencies: