Partly false. We were audited every year by one of our competitors. There is a strong likely hood that the reason she was told to stop finding problems is because the de minimus limit (the dollar figure at which we don't care) is truly, and I mean TRULY massive for the kind of companies that are audited by EY, PWC, KPMG, and Deloitte. I refuse to believe for one second that a serious issue was swept under the rug by a senior or manager.

As for the guy sleeping in cupboards...the staff at those firms reguarly work 80 hour weeks (not the "I work 80 hour weeks counting all kinds of stupid things" but the "I was at the client site or in the home office for 80 hours this week". It was a very common occurence for hard working staff members to take naps at the client (most likely because last night was a 2am night). Promotions at these firms are often very competitive as the organization is an "Up or out" organization designed to chew up fresh college grads.

The peer review is conducted by an independent evaluator, known as a peer reviewer. The AICPA oversees the program, and the review is administered by an entity approved by the AICPA to perform that role. 2. The peer review helps to monitor a CPA firm's accounting and auditing practice (practice monitoring).

So no legal risk, but there is still professional risk. When external auditors come in or an issue is found that impacts customers, they could scapegoat their internal (deliberately made useless) team, fire them, and have a go at using that as part of their defense/response. The higher-ups would be ok if they can pull it off, but your wife would've been out a job and with an inability to get a reference from them (beyond the basic: She was employed here from X-Y).

Best plan for everyone is to get out of shady companies like that ASAP.