2 Min Read
LONDON (Reuters Breakingviews) - Mistakes happen. It’s what happens next that counts. Sunday's Academy Awards gaffe that saw the wrong film named as best picture may leave the ceremony’s accounting partner with a sense of déjà vu. PricewaterhouseCoopers flubbed its job of handing closely guarded voting results to presenters, resulting in "La La Land" being mistakenly awarded the Oscar until the error and the real winner, "Moonlight", were finally announced in the middle of the third "La La Land" acceptance speech.
PwC’s day job, which has included auditing scandal-hit companies from Colonial Bank to Tesco and BT, might have served as a warning. Financial firms dealing with past misdemeanours, like Deutsche Bank and JPMorgan, will also recognize the pattern. Most embarrassing corporate moments tend to have at least three actors: the person who commits the deception or error, the person who fails to notice, and the person who notices but doesn’t do anything.
First came a mistake that was clearly PwC's. It handed the presenters the wrong envelope. On its own, that needn’t have turned into a fiasco. As it was, though, actor Warren Beatty, who spotted the problem, said nothing, leaving it to fellow presenter Faye Dunaway to blurt out the wrong result. The PwC representatives in the wings surely knew immediately, and the show's producers must have learnt quickly, yet it took minutes to halt proceedings.
PwC, which makes quite a show of protecting the top-secret Academy Awards briefcases, apologized after the ceremony. No real harm was done – it’s a tale of fallibility rather than blame. Auditors are expected to spot dud numbers, but to do so they rely on process and human judgement, both of which can fail. The moment when everyone is comfortable that nothing can go wrong is the time mistakes will inevitably happen. That's a lesson for auditing, too.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.