You think I’m kidding, don’t you?
Earlier:
You’d Be Wrong If You Thought Americans for Tax Reform Were a Bunch of Humorless Killjoys
You think I’m kidding, don’t you?
Earlier:
You’d Be Wrong If You Thought Americans for Tax Reform Were a Bunch of Humorless Killjoys
In case you’re just joining us on this MOANday, the SCOTUS ruled this morning that “the structure of the accounting board violated constitutional separation-of-powers principles because it was too difficult for the president to remove board members.”
So, pretty wonky legal stuff. The good news is that auditors will get to keep their jobs (mixed feelings, we’re sure) but what’s the reaction at large?
PCAOB – The PCAOB, for one, is just excited that the SCOTUS is still letting them play. Sayeth interm Chairman for life Dan Goelzer, “We are pleased that the decision allows the PCAOB to continue without interruption to carry out its important mission of overseeing public company audits in order to protect investors and promote the public interest.”
SEC – Likewise, SEC Chair Mary Schapiro is fine with the decsion too, “I am pleased that the Court has determined that the Board’s operations may continue and the Sarbanes-Oxley Act, with the Board’s tenure restrictions excised, remains fully in effect. The PCAOB is a cornerstone of the Sarbanes-Oxley Act and serves a critical role in promoting investor protection and audit quality. We look forward to continuing to work with the Board in connection with its mission to oversee auditors in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports.”
Wall St. Journal – Suzanne Barlyn over at Financial Adviser writes that the small broker dealers won’t get the much coveted relief on their audit fees, “Historic financial regulatory reform legislation, which may be enacted as soon as July 4, would empower the PCAOB to regulate auditors of privately held broker dealers, who would then be subject to the organization’s inspections and possible enforcement actions. The potential change could mean auditing fees as high as $50,000 to $100,000 per year for certain broker dealers, instead of the $5,000 to $10,000 they typically shell out now.”
And Michael Corkery at Deal Journal writes that there is disappointment out there for the über-haters, “Dashed are the hopes of some corporations who believed the Court would use this case to question the broader issues of Sarbanes-Oxley, which critics say has buried publicly traded companies in onerous regulation and paperwork.”
Former SEC Chairman Harvey Pitt – Former Chairman Pitt is less thrilled, telling Bloomberg that the decision was “an unfortunate and serious blow” and that even if Congress could squeeze there regulatory fix into the current reform bill, “in the two thousand pages of the legislation…there’s not a word dealing with the PCAOB That is something that will have to be fixed.”
DealBook – Peter Henning of White Collar Watch is fairly unmoved, “[T]he decision in the Free Enterprise Fund case has no real impact on the operations of the Public Company Accounting Oversight Board beyond removing a cloud as to its continued viability. The likelihood one of its members would be removed by the S.E.C. is virtually nonexistent, and its oversight and enforcement powers continue undisturbed. Similarly, the Sarbanes-Oxley Act remains fully in force beyond the narrow constraint on removal of a board member that is no longer operative.”
The Economist – Schumpeter’s Notebook is thankful that the entire law doesn’t have to be rewritten in the current legislative environment, “[I]t is probably a good verdict from business’s point of view. Companies have spent millions on SOX compliance, and had just about got used to the legislation. Moreover, there is no guarantee that a broad reconsideration of SOX, in the current business climate, would produce better legislation. Far from it.”
Ernst & Young – Directly from Jim Turley, “Independent regulation of the profession post-Sarbanes Oxley (SOX) has strengthened audit quality and confidence in financial reporting. We are pleased that the Court’s decision provides that the PCAOB’s independent oversight can continue without interruption. Although today’s ruling found a flaw in a provision within SOX regarding the removal of Board members, the Court held that Sarbanes Oxley remains the law.”
AICPA – Barry Melancon is as excited as everyone else, “The court’s ruling is a victory for investors and for the accounting profession. The decision effectively fixes the constitutionality of the PCAOB by making board members subject to `at will’ removal by the SEC and therefore the president. It sustains the continued function of both the PCAOB and Sarbanes-Oxley. As such, the court rejected a transparent attempt to undermine the post-Enron reforms that have served our financial markets well.”
Center for Audit Quality – The CAQ filed an amicus brief with court and Executive Director Cindy Fornelli was happy with the result, “The CAQ is pleased that the U.S. Supreme Court’s decision will allow the continued operation of the Public Company Accounting Oversight Board (PCAOB) without any changes or legislative action. This narrow decision clearly severs the PCAOB board member removal process from the rest of the Sarbanes-Oxley Act (SOX) and reaffirms all provisions of the law except for the power to remove the board members. The PCAOB was put in place to achieve the goals Congress embodied in SOX. As we observed in our friend-of-the-court brief, evidence demonstrates that audit quality and investor confidence have improved since the Board’s creation. The decision will prevent any disruption to the key activities of the PCAOB including setting auditing standards and the public company audit oversight process, critical factors in the continued strength and stability of our capital markets.”
Paul Sarbanes and Michael Oxley – The architects, if you will. “The PCAOB provides essential protections to the more than half of American households that invest savings in securities. It ensures the integrity of public company audits and, thereby, the accuracy of financial reporting. The PCAOB enjoys widespread support from investors as well as from the accounting profession. The decision from the Supreme Court adjusts the law in a way that allows the PCAOB to continue to ensure the integrity of public company audits. The Board’s essential protections of American investors will continue.”
That’s not a typo, people, this guy made $661,000 in 2010 for services rendered to the New Orleans traffic court.
Vandale Thomas, a personal friend of Judge Robert Jones, billed the traffic court over $660,000 in 2010 for entire chunks of hours with zero description of what those hours entail. “There’s just aggregations of hours. Forty-five hours for this, 45 hours for that. And that’s it. On that basis, we paid, the courts paid $661,000 to this guy. We’ll be talking to people to try to make sure where the money went and what it was for,” New Orleans inspector general Ed Quatrevaux told local WWLTV.
On top of his billable hours, Thomas also was handed $100,000 from traffic court with no mention of what the fee was for in court records.
Well, let’s do the math (keeping in mind while we do it that I am anything but a mathlete). If Thomas billed $40 per hour (pulling that number out of my ass, much like Thomas likely pulled his hours), he’d have to work a little over 317 hours a week to validate a $660,000 salary for the year. The problem with that, of course, is that there are only 168 hours in a week. According to documents obtained by WWLTV, Thomas is billing $80 an hour, therefore by that math, he’d have to work 20 hour days every single day of the week for every week of the year to earn the $661,000 he billed.
Judge Jones, when confronted with the dollar amount of Thomas’ services, expressed shock, telling WWLTV he then called in Thomas and told him “unless you have an army of accountants working for you around the clock, this is humanly impossible.” Jones went on to say he supports an investigation of Thomas, but doesn’t think it will show any criminal wrongdoing.
I know armies of accountants and they don’t make that kind of money.
BDO released a press release on ESOP at 10 am this morning, here it is […]