Will Auditors Be Held Accountable? The PCAOB Has A Plan

I view successful litigation against negligent auditors and strong enforcement of sanctions for auditor malpractice as positive developments. This is a view many of my readers would disagree with. However, I've learned over the last four years not to get too excited by any one positive development...

Two Wildly Different Stories About Deloitte: Or Are They?

In the last few weeks, I've written two very different stories about Deloitte: One, published as media criticism by the Columbia Journalism Review , skewers new Deloitte Global CEO Barry Salzberg - and The New York Times - for misdirecting readers from real world issues with a puff piece....

Comments about James Doty’s Speech – A Poor State of the Audit . . . and the Profession

by David Tate Many comments have already been made about the speech by James Doty (Chair, PCAOB) on June 2, 2011 at the SEC and Financial Reporting Institute 30 th Annual Conference. See the speech at http://pcaobus.org/News/Speech/Pages/06022011_DotyKeynoteAddress.aspx I lend some of my thoughts...

Going In Circles: A Few Remarks On Audit Reform

Don't get me wrong. I'm thrilled that there's a lot of traffic in my lane. What I mean is, it's good for everyone that we're talking about these issues and that someone other than me and a few other broken records are playing these tunes. Fairly new PCAOB Chairman Jim Doty...

An Update on Lehman and Ernst & Young

According to an article in the Wall Street Journal : A lawsuit contending that Lehman Brothers Holdings Inc.'s former officials, underwriters and auditors are responsible for investor losses should go forward for the most part, a federal judge ruled Wednesday. According to the article, the...

Ernst & Young Lehman Litigation: It’s No Victory If You’re Going To Trial

It wasn't even a verdict. Just a decision by New York Federal Court Judge Lewis Kaplan in one Lehman failure cases Ernst & Young is fighting. A decision to allow substantially all of the allegations against Lehman executives and at least one of the allegations against Ernst & Young to...

A Potentially Costly Combination: Deloitte, Taylor Bean and the PCAOB

If you follow news affecting auditors, you may have noticed that the PCAOB made a very rare disclosure yesterday about one of the big four firms, Deloitte. The PCAOB said that Deloitte was previously sanctioned for not being skeptical enough to challenge statements made by management and that they...

At Deloitte, More Pain Before Any Quality Gain

The PCAOB, the audit industry regulator, shamed global audit firm Deloitte recently when they exposed the private portion of the inspection report of the firm's 2006 audits. It was the first time that had happened to one the Big Four audit firms, the largest firms that audit the vast majority...

PCAOB Imposes Record Fine on E&Y in Public Proceeding

E&Y was censured and fined a record $2 million by the PCAOB in connection with repeated violations of professional standards. It was imposed in a proceeding that was filed in March 2011 as a non-public but which, for good cause shown, was made public. In the Matter of Ernst & Young LLP, PCAOB...

Are Auditors Reporting Fraud And Illegal Acts? The SEC Knows But Isn’t Telling

Section 10A of the Securities and Exchange Act of 1934 requires reporting by auditors to the Securities and Exchange Commission (SEC) when, during the course of a financial audit, an auditor detects likely illegal acts that have a material impact on the financial statements and appropriate remedial...

Why Is The SEC Pursuing Deloitte Shanghai? Looks Like It’s Personal

The Securities and Exchange Commission is rattling a dull sabre again towards Shanghai-based Deloitte Touche Tohmatsu CPA Ltd. for its refusal to provide the agency with audit work papers related to Longtop, a China-based company under investigation for potential accounting fraud against U.S. investors...

Big Four Auditors and Jury Trials: Not In The U.S.

Deloitte has settled a shareholder case against the firm stemming from their role as auditor of Bear Stearn s, one of the early financial services firms to fail, be force sold or nationalized during the financial crisis of 2008-2009. Deloitte was dangerously close to having to answer for its actions...

PFGBest: Another Fraud, Another Example Of Weak Auditors and Weak Regulatory Oversight

My latest column @Forbes is about the most recent futures industry fraud case, PFGBest. PFGBest is another reason why the industry's poor business environment, wracked with a crisis of confidence after MF Global, just got much worse. All Fall Down; PFGBest and MF Global Frauds Reveal Weak ...

More Sarbanes-Oxley Anniversary Thoughts

The day my OpEd in the Financial Times was published, July 30, there were many other stories in other publications marking the occasion of Sarbanes-Oxley's tenth anniversary. Most of them focused on the lack of prosecutions of CEOs and CFOs for false financial statement certification crimes....

Four Years After Madoff, Audits and Auditors of Broker-Dealers Still Lousy

Last week I posted a column at Forbes: Already Behind The Eight-Ball: Auditors of Broker-Dealers Are A Disaster The Public Company Accounting Oversight Board, the US audit industry regulator, issued its first report on the auditors of broker-dealers this week and it was ugly. The PCAOB inspection...

Deloitte, HP And Autonomy: You Lose Some But You Win Some More, Much More

When HP announced its intention to acquire Autonomy, the British data analysis firm now mired in accusations of serious fraud , Deloitte probably shed some enormous tears of joy. Deloitte was more than happy, I'm sure, to rid itself of the Autonomy audit albatross . That may surprise some of you...

Scott London Subverted Sarbanes-Oxley: Big Four Mock Audit Partner Rotation

The earth rotates around the sun. Galaxy Doppler shifts are almost always redshifts. The further away the galaxy the faster it is receding. I'm learning a lot in my first class, Cosmology, in the University of Chicago Masters in Liberal Arts Program . The universe has order. There's synchronicity...