U.S. investors urge "going concern" warning reform [Reuters]
Most big companies bailed out by the government in the 2007-2009 financial crisis had clean bills of health from their auditors and no auditors have been disciplined over this, investors told the Public Company Accounting Oversight Board at a meeting in Washington. If auditors "continue on the track they're on, two decades from now, they'll no longer be relevant at all," said Lynn Turner, former chief accountant for the U.S. Securities and Exchange Commission and a member of a PCAOB advisory group.
Accounting Problems in China Make a Comeback [WSJ, Earlier]
Three companies halted trading in Hong Kong on Thursday, including Shirble Department Store, which didn’t provide a reason for its suspension. However, Shirble’s stock has dropped 26.5% since its March 21 close, when the company said it would postpone its full-year results to March 30 from March 22, as its auditor needs more time to finalize its accounts. Another company, Ausnutria Dairy Corp., said in a statement to the stock exchange Thursday morning that it would also delay the publication of its results. High-end fashion retailer Ports Design Ltd. also said Thursday that it would postpone its annual results report as auditor KPMG needed more time to audit its accounts. The suspensions come after Daqing Dairy Holdings Ltd. and Boshiwa International Holdings Ltd., a children’s apparel maker, both said this month that Deloitte had resigned as their auditor. Boshiwa shares had fallen 35% before being halted from trading March 22.
Lawmakers blast audit watchdog as "activist" [Reuters]
Politicians slammed the U.S. auditing industry watchdog on Wednesday for its push toward publicizing disciplinary proceedings and for considering term limits for audit firms, saying such measures would amount to "regulatory overreach." Republicans and some Democrats at a House of Representatives Financial Services subcommittee hearing criticized policy initiatives under way at the Public Company Accounting Oversight Board, or PCAOB, which polices the firms that audit corporations. "I am very concerned about some of the recent activist proposals put forth by the PCAOB," said New Jersey Republican Scott Garrett, chairman of the panel that held the hearing.
At MF Hearing, Sounds of Silence [WSJ]
For more than two hours, three MF Global executives frustrated and stymied lawmakers in both parties who demanded answers about money transfers made in late October that left the securities firm's customers with losses. "This reminded me of a hearing we had…on Enron," where no one would admit to anything, said Rep. Michael E. Capuano (D., Mass.). And the person lawmakers hoped would be their star witness kept her mouth shut. "On the advice of counsel, I respectfully decline to answer based on my constitutional rights," said Edith O'Brien, MF Global's assistant treasurer.
Panel Clears Ernst & Young in Olympus Probe [WSJ]
Closing another chapter in probes into the scandal that rocked Olympus Corp. last year, an independent panel of lawyers and professors on Thursday cleared Ernst & Young ShinNihon LLC of legal responsibility in its audit of the company's accounts. But the panel also called on the accounting industry to take measures that go beyond existing legal obligations to better spot potential fraud. "We reached the conclusion that legal responsibility cannot be confirmed," panel member Nobuo Gohara, a lawyer and professor of compliance at Meijo University, said at a news conference.
Mary Boelke is replacing Michael Becher, who ran the Indianapolis office for 20 years.