Years ago I
attended a memorable lecture by Al Capp, the rude and raucous American cartoonist
(1909-1979), whose irreverence included a lesson on the Bronx-cheer pronunciation
of his hapless character Joe Btfsplk, who went through life attracting
misfortune with a dark rain cloud hovering over his head.

Joe came to mind
recently, over lunch with my friend and blogging colleague Francine McKenna,
who had just written with her usual enthusiasm to kick at the PCAOB’s
sometime-dormant suggestion that the United States should join the many
European and other countries that require audit reports to be signed in the individual name of the lead
partner, or otherwise require disclosure of the lead partner’s identity.

Having previously
expressed my
views — that in context of far more substantive pending issues and
concerns, this one is a tempest in a very small teapot and unworthy of the
dedication of any but a trivial amount of energy – I will briefly expand.

In summary, the
passionate arguments of the US profession against partner naming are undercut
by the absence of serious difficulties under the practice in Europe – even
though, as shown by the perfervid finger-pointing around Edward Snowden and the
daily revelations of global spy-mongering, European concerns for personal
confidences and resistance to privacy intrusions by government run as deep if
not deeper than in America.

Yet, the case that
individual partner performance quality would be positively affected by name
disclosure is not supported. Definitely not in Europe, where a vacuum of
favorable evidence combines with an absence of elevated professional virtue.

Nor in the US where
a “name-that-partner” exercise would leave gaping holes in the base of
information. That is:

First, of course, the discovery of rogue partners
such as the information-sharing guilty pleaders, Scott London of KPMG and Tom Flanagan of Deloitte, involved post-exposure
revelations – as to which any prior personal disclosure would have provided no
informational value at all.

Second, to be serious, arguments in favor of the
disinfectant effects of disclosure should require publication of entire partner
lists. That’s because the Big Four routinely move senior-level partners into
consultation, concurrence, job review or standard-setting – which under pending
proposals would not require either individual rotation or disclosure unless there
should be a hugely expanded set of naming requirements.

Francine’s own
fussing about the naming of PwC’s lead partner on its engagement for now-accused Jon Corzine’s failed MF Global makes the
point –that partner seems to have had broad industry-based involvement across
the firm’s financial services clients, but not
in the putatively disclosable capacity of lead partner.     

Other examples are
to the same effect: 

• E&Y’s
  national office head was dinged by the SEC in 2009, over Bally Total Fitness,
  not in an engagement capacity at all, but on the basis of one problem-oriented
  telephone call in 2003.

• KPMG’s
  engagement partner on Xerox, for only one of the four years for which it was
  charged by the SEC, went on to a senior-level role from which he eventually
  retired.

• And the
  Arthur Andersen partner who figured in the government’s criticism of the
  application of the firm’s document retention policy in Enron, had been the
  subject of a prior SEC proceeding in 2001 related to Waste Management, not as
  engagement partner but as an audit practice director in 1995.[1]
    

Third – going back to poor Joe Btfsplk – the
firms themselves are powerfully incentivized to evaluate and manage any
exposure created by the activities of their personnel under legal or regulatory
scrutiny.

Early in my
courtroom career, my law firm defended one of the then-Big Eight in an entire
portfolio of lawsuits involving the clients of a single audit partner – who in
his genial ineptitude was not just a Joe Btfsplk, but a virtual Typhoid Mary of
litigation exposure.

Briefly put, that
firm quite rightly deserved the expanded exposure it attracted, for failure to
identify and firewall this at-risk partner as soon it appeared – as a viral exception
to its usually high quality standards – that every job he touched was infected.

With that, a
large-firm partner ensnared in a major lawsuit, investigation or enforcement
proceeding is, to use the euphemism, already “career impaired.” The protracted
and unpredictable timetable of judicial proceedings is personally deadening to
the soul and the spirit; no useful purpose is served by publicly drenching such
a partner under Joe Btfsplk’s black cloud.

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