When Academy Award-winning actress Faye Dunaway looked at the card, smiled and said, "La La Land," the Hollywood luminaries assembled Sunday in the Dolby Theatre burst into applause and cheers, as did many of the TV viewers still awake. They, like the producers of the remarkably successful musical, thought that the movie had been named best picture of the year.
Not so. Moments later, when Jordan Horowitz, producer of "La La Land," took the microphone and began waving his index finger in the air, it was clear something was not exactly right. "Sorry guys, hold on. There's a mistake. 'Moonlight,' you guys won best picture. This is not a joke." He then held up the correct card and the camera zoomed in on the print. Sure enough, "Moonlight" was listed as best picture.
How does this happen? It was reminiscent of Steve Harvey announcing in 2015 that Miss Colombia, Ariadna Gutierrez, had won the Miss Universe contest. In fact, she was runner-up. Pia Wurtzbach, Miss Philippines, had been voted the winner that year. Apologies, tears, recriminations and a thousand rewrites for late evening newscasts quickly followed.
PricewaterhouseCoopers, the venerable public accounting and professional services firm, issued a statement of apology by 3 a.m., some 2 1/2 hours later: "We sincerely apologize to 'Moonlight,' 'La La Land,' Warren Beatty, Faye Dunaway, and Oscar viewers for the error that was made during the award announcement for best picture. The presenters had mistakenly been given the wrong category envelope, and when discovered, was immediately corrected. We are currently investigating how this could have happened, and deeply regret that this occurred."
In fairness, at the ceremony PwC responded immediately. A PwC accountant jumped up after the announcement and yelled, "He (Warren Beatty) took the wrong envelope!" and ran on stage.
The question here is whether you blame your client for "taking the wrong envelope" or the supervising CPA for handing it to him. Either way, they got it wrong. The error was quickly corrected, but the damage will last for years. Even if race and the dust-up over #OscarsSoWhite last year weren't part of the discussion, the moment was tarnished for "Moonlight" producers Adele Romanski, Jeremy Kleiner and Dede Gardner. They can't have it back.
Most public accounting firms can quickly file a Form 1040X to revise a filing error in your tax return, or can assist in restating earnings on an 1120X if a company's chief financial officer should get it wrong. Most of those errors are easily corrected and, for the most part, little known outside of the financial community.
Not so with an Academy Award. This one was public, live and enormously embarrassing. It's not Arthur Andersen certifying the earnings of Enron, but it's pretty bad. The Securities and Exchange Commission will not move to bar PwC from auditing publicly traded companies, but unless Beatty fesses up and says, "Yeah, it was my fault," PwC is likely to be tarred with this event as the punchline to a joke involving a less-than-fully-competent accounting firm.
The apology must be followed by a thorough explanation of the facts, as best they can be determined, and a resolution never to allow such a publicly humiliating event to occur again. That is, if they're given the job next year.
Then again, this is Hollywood, the land of make-believe. Every moviemaker wants to believe, if only for a moment, that this is really his or her turn in the spotlight. And perhaps many more moviegoers will want to see "Moonlight."
James S. O'Rourke is a professor of management and director of the Fanning Center for Business Communication in the University of Notre Dame's Mendoza College of Business.
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