Oscars flub engulfs PwC in controversy
‘ Human error’ could affect firm’s reputation as an awards monitor
The now- infamous Oscars flub engulfed PricewaterhouseCoopers in crisis Monday, threatening to undermine the auditing giant’s reputation as the Academy Awards awards ceremony monitor amid jokes and ridicule by social media users and others.
The firm, popularly referred to as PwC, apologized after award presenters Sunday night incorrectly announced La
La Land as 2016 best picture winner. The mistake triggered an off- stage scramble that spilled onto the stage and led to an embarrassing reversal in which
Moonlight was correctly crowned champion.
Next comes a business scramble as the New York City- based company with $ 35.9 billion in 2016 revenue seeks to avoid a permanent blow to its reputation. Corporate experts predicted Monday that short- term damage is likely inevitable but said the long- range business outlook hasn’t necessarily dimmed.
“At the end of the day we made a human error,” Tim Ryan, U. S. chairman and senior partner of PWC told USA TODAY on Monday. “We made a mistake. What happened was, our partner on the left side of the stage, Brian Cullinan ... handed the wrong envelope to ( actor) Warren Beatty. And the second we realized that we notified the appropriate parties and corrected the mistake.”
Efforts to reach both Cullinan and Martha Ruiz, the other PwC accountant who oversees Oscars balloting and award presentations, were unsuccessful.
The firm’s role in the movie industry’s biggest event long has been a source of pride for the firm. Rivals Ernst & Young audits theEmmys and the Golden Globe Awards and Deloitte Touche Tohmatsu audits the Grammy Awards.
PwC has tabulated results and monitored awards distribution for the Academy of Motion Picture Arts & Sciences for 83 years. The mistake seen by 32.9 million TV viewers was at the end of Sunday’s ceremony inHollywood.
For a company of accountants who pride themselves on their commitment to accuracy, an event that ordinarily helps burnish corporate credibility threatened to devolve into a crisis.
Accounting is a “credence good,” which means “customers don’t know to evaluate” it unless something goes wrong, University of Michigan business professor Erik Gordon said. He said accounting firms are hired to ensure public companies, for example, have processes in place to avoid blunders.
PwC is sure to remain “the punchline of any number of gags for years to come,” says James O’Rourke, a corporate communication and reputation management expert at the University of Notre Dame’s Mendoza College of Business. But given PwC’s size, O’Rourke said PwC would remain in demand as one of the few companies with the capability of auditing other U. S. corporate giants.