PCAOB

Uh-Oh, PwC, You’ve Gotten the Attention of the PCAOB

Somebody at the PCAOB must have read the Wall Street Journal article last week about Mattel and its auditor PwC allegedly burying an accounting error tied to Mattel’s ownership of Thomas & Friends because everyone’s favorite mess of an audit regulator is reviewing PwC’s work, according to Bloomberg, and probably whether the firm broke any […]

Memo to Audit Firms: Altering Workpapers Is Still Frowned Upon

Amid all the drama and turmoil going on at the PCAOB right now, one thing hasn’t changed: PCAOB inspectors really love busting auditors for improperly altering workpapers. Eight auditors—two at Deloitte Korea and six at BDO Mexico—found this out the hard way recently. Because these auditors ignored the memo that altering audit workpapers is never […]

OMG, the PCAOB Is Actually Holding an Open Meeting!

I hope everyone at the PCAOB remembers what to do during an open meeting. It’s been a while. The Public Company Accounting Oversight Board will hold an open meeting on Tuesday, November 19, at 10 a.m. ET, to consider the adoption of the PCAOB budget for the 2020 fiscal year and the 2019-2023 strategic plan. […]

This Halloween Costume Is Here to Haunt the PCAOB’s Dreams

Happy Halloween, everyone! Apologies if you do actually work for @KPMG, but you're this year's #halloween costume #companyhorror pic.twitter.com/B4N09PCs7W — 𝕯! (@darrynvdwalt) October 28, 2017

Senators to SEC Chair Jay Clayton: What the Hell Is Going On At the PCAOB?

It seems we weren’t the only ones who were disturbed by the Wall Street Journal article last week detailing the dysfunction at the PCAOB under the tremendous leadership of chairman and meetings hater William Duhnke. In a letter dated Oct. 17 to SEC Chair Jay Clayton, Sens. Sherrod Brown (D-OH) and Jack Reed (D-RI) called […]

The SEC Got Rid of the Only PCAOB Member Not Drinking the William Duhnke Kool-Aid

Ladies and gentlemen, THIS is the current state of your PCAOB under the leadership of William Duhnke, according to the Wall Street Journal: A watchdog tasked with protecting investors by policing audits of public companies has slowed its work amid board infighting, multiple senior staff departures, and allegations that the chairman has created a “sense […]

Ex-PCAOBer Jeffrey Wada Gets Prison Time For Being a Blabbermouth In KPMG Scheme

Being passed up for a promotion can cause a person to do really dumb things in a fit of anger. For now-former PCAOB inspections leader Jeffrey Wada, the really dumb thing he did was illegally tip off executives at KPMG—not once but twice—about which KPMG audits the PCAOB would be reviewing so the firm could […]

At Least EY’s 2017 PCAOB Inspection Report Is Not as Not Good as KPMG’s

The PCAOB just released EY’s 2017 inspection report, and there’s some good news and some bad news for the Black and Yellow. The good: Congrats, EY, your audit deficiency rate of 31% is below your historical average deficiency rate of 32%. Of the portions of 55 issuer audits PCAOB inspectors reviewed during 2016, 17 weren’t […]

The PCAOB Hates Meetings As Much As We Do

Going Concern staff has historically not been fond of meetings. Caleb hated them. Adrienne doesn’t like them because that means she has to wake up before noon. And I don’t particularly care for meetings either. They’re usually a waste of my time. According to our friend Francine McKenna at MarketWatch, the PCAOB seems to be […]

Marcum’s Microcap Conference Seemed Like a Great Event for Auditor Independence Violations

In the storied history of auditor independence violations by PCAOB-registered accounting firms, Marcum broke the rules in a rather unique and spectacular way: it publicly advocated its audit clients as investment opportunities. The PCAOB was probably giddy writing and sending out this press release on Sept. 10: The Public Company Accounting Oversight Board today announced […]

Ex-KPMG Partner’s Request to Have His Wire Fraud Conviction Thrown Out Gets Shot Down, Crashes, Burns

Welp, so much for that. David Middendorf, former national managing partner for audit quality and professional practice at KPMG, is scheduled to be sentenced in Manhattan federal court tomorrow, according to Law360, for his role in an information-stealing scheme in which PCAOB insiders fed KPMG executives secret plans on which of the Big 4 firm’s […]

Ex-KPMG Executive Director Who Was Major Player In PCAOB Cheating Scandal Sentenced to Eight Months In Jail

The first prison sentence was handed out today in Manhattan federal court to one of the five former KPMG executives indicted in a scheme to steal confidential audit inspection information from the PCAOB. Cynthia Holder, a former PCAOB inspections leader who later worked as an executive director at KPMG, was sentenced to eight months in […]

PwC Mexico Partners Must Have Thought Auditor Independence Rules Did Not Apply to Them

A friendly reminder to audit firms: an auditor must maintain independence in both fact and appearance. Maybe PwC Mexico forgot this when it took over in fiscal year 2016 as the auditor of one of the largest financial services holding companies in Mexico. It just so happened that at the time the engagement letter was […]

Let’s Give a Big Hand to BDO For Not Having the Worst 2017 PCAOB Inspection Report

The PCAOB released the 2017 inspection report for BDO USA at the end of June, and while the firm should still hang its collective heads in shame for there being deficiencies found in nine of the 23 audits inspected in 2016, for a 39% failure rate, there are a few positive things that Bravo Delta […]

Which KPMG Scandal Is Worse: PCAOB ‘Steal the Exam’ or CPE Training Exam Cheating?

Since Monday when the SEC announced it had fined KPMG $50 million for not one but two scandals involving auditor misconduct at the firm, I’ve been thinking about which scandal is worse. Is it KPMG audit partners stealing confidential information from rogue PCAOB employees in order to better the firm’s audit inspection scores OR is […]

SEC Says $50 Million Fine For KPMG Is ‘Significant’ and ‘Appropriate’ For All That Cheating Going On

The SEC made official today the news that Dave Michaels of the Wall Street Journal broke late last week, announcing that KPMG will pay $50 million to settle allegations that former partners “stole the test” by using confidential information that was being fed to them by a PCAOB insider to improve the firm’s performance on […]

$50 Million Fine SEC Is Reportedly Giving KPMG Over PCAOB Scandal Isn’t Big Enough

Dave Michaels of the Wall Street Journal broke some huge news late last night about a huge fine the SEC could levy against KPMG later this month because of several former partners’ involvement in one of the biggest U.S. accounting scandals in recent years—stealing secret audit inspection information from the PCAOB. KPMG LLP is preparing […]

Ex-EY Audit Partner’s Lousy Audit Judgment Landed Him a $25,000 Fine From the PCAOB

Earlier today, we talked about audit quality or the lack thereof in Australia, the U.S., and, for that matter, all over the world. Well, this latest enforcement order from the PCAOB doesn’t help make a case that audit quality at the biggest accounting firms in the U.S. is getting any better. Compliance Week reported: The […]

PCAOB Doesn’t Take Kindly to Auditors Who Alter Audit Documentation Prior to an Inspection

For years, the PCAOB has pleaded with auditors to quit altering audit workpapers after being notified of an inspection, and some auditors continue to thumb their noses at the PCAOB. Like Humayoun Khan, a former PwC auditor, who was accused of improperly altering a previously archived workpaper in anticipation of a PCAOB inspection. A PCAOB […]

Ex-KPMG Partner David Middendorf Believes He’s Been Done Wrong, Wants a Crack At a New Trial

Don’t get out those orange prison jumpsuits just yet for former KPMG partner David Middendorf and former PCAOB inspections leader Jeffrey Wada. The two men are asking a Manhattan federal court to throw out their wire fraud convictions or grant them a new trial, saying the government didn’t provide enough evidence to support the guilty […]

PCAOB Releases Teaser Trailer of 2018 Inspection Findings

Testing internal control over financial reporting, assessing risks of material misstatement, and auditing accounting estimates (you know, the yoozh) continue to trip up auditors, according to the PCAOB, which offered a sneak preview of what we can expect in 2018 audit firm inspection reports. More than 160 U.S. audit firms were inspected by the PCAOB […]

It Seems the PCAOB and SEC Are Giving Accountants the Benefit of the Doubt More These Days

Maybe it’s because the PCAOB had a new chairman and a whole new board at the beginning of last year. Or maybe it’s because the audit regulator’s longtime enforcement chief bolted last May and the position still hasn’t been permanently filled. Whatever the reason, the PCAOB settled only 13 enforcement actions against accountants in 2018, […]

The PCAOB Is Sick and Tired of Not Being Told About Firms’ Past Disciplinary Hearings

RSM US isn’t the only firm that has been lazy about disclosing to the PCAOB that they’ve been involved in a non-PCAOB disciplinary proceeding. In fact, RSM’s affiliate in Hong Kong and Deloitte’s affiliate in Colombia are also guilty of taking too damn long to send the PCAOB the proper paperwork. And now both firms […]

PwC’s 2017 PCAOB Inspection Report Is Fairly Unspectacular

So far among the top seven firms in the U.S., the PCAOB has released 2017 inspections reports for five: one was god-awful (RSM US), one was horrible (KPMG), one was pretty, dare I say, good (Deloitte), and one was dynamic (Grant Thornton). PwC’s inspection report would probably fall on the “good” side (if you consider […]

Shocked monkeys

Grant Thornton Surprises Everyone By Not Sucking at Auditing

Grant Thornton gets a bad rap around here, much of which is kinda justified to be fair. They’re sort of like your annoying little brother who always wants to come with you to hang out with your friends but he smells like curdled milk and always has crusty gunk on the corners of his mouth. […]

Ex-KPMG Executive Director’s Sentencing Put Off Until June

We won’t know until June at the earliest how much prison time former KPMG executive director Cynthia Holder will get for her involvement in a scheme to steal confidential audit inspection information from the Public Company Accounting Oversight Board. Holder was supposed to be sentenced in Manhattan federal court on April 5, but her sentencing […]

kpmg china medical

KPMG Bermuda’s Head of Ethics Fined By the PCAOB For Being Unethical

Here’s a fun story of what not to do if you’re an ethics director at a Big 4 firm. Damion Henderson, a managing director at KPMG Bermuda, was fined $10,000 by the PCAOB on April 9 for signing off on documents that had been re-created and backdated in advance of a PCAOB inspection and not […]

PCAOB Fined RSM US $15,000 for Taking Its Sweet-Ass Time to File a Form 3

Say a PCAOB-registered accounting firm is a defendant or respondent in an administrative or disciplinary proceeding that was initiated by another regulator. That firm has to let the PCAOB know about this by filing Form 3, Special Report, within 30 days after the event. The firm also has to let the PCAOB know that it […]

Ex-KPMG Partner’s Fraud Trial: David Middendorf and Jeffrey Wada GUILTY!

A Manhattan jury on Monday convicted former KPMG partner David Middendorf and former Public Company Accounting Oversight Board staffer Jeffrey Wada for their roles in one of the biggest accounting scandals in recent years. Law360 court reporter Jack Newsham broke the news on Twitter earlier this afternoon: BREAK – Middendorf, Wada convicted on all but […]

Ex-KPMG Partner’s Fraud Trial: David Middendorf Takes the Stand

Law360 court reporter Jack Newsham wrote on Feb. 28 that it could happen this week, and he was right: Former KPMG partner David Middendorf took the stand this afternoon to testify in his own defense. MIDDENDORF TAKES THE STAND — Jack Newsham (@TheNewsHam) March 4, 2019 Authorities have said that Middendorf and four of his […]

Grant Thornton Current and Former Partners Will Have a Seat In the PCAOB’s Penalty Box

The Public Company Accounting Oversight Board doled out suspensions to a current partner and a former partner at Grant Thornton on Feb. 26 for their roles in screwing up the 2013 audit of a real estate investment trust. Richard Huff Jr., CPA, was censured and given a one-year ban by the PCAOB. Huff was the […]

Ex-KPMG Partner’s Fraud Trial: What David Middendorf Allegedly Said Once the Scheme Started to Unravel

OK guys, things are starting to get good in the David Middendorf trial. We now know the identity of “Partner-5”—the person at KPMG who allegedly blew the whistle on the information-stealing scheme that five KPMG executives and one Public Company Accounting Oversight Board employee were involved in to help KPMG know ahead of time which […]

Ex-KPMG Partner’s Fraud Trial: Brian Sweet Takes the Stand

The trial of ex-KPMG partner David Middendorf keeps rolling along, as prosecutors on Feb. 19 called on one of the major players in the scheme to steal secret audit inspection information from the Public Company Accounting Oversight Board to testify against Middendorf. Brian Sweet, a former associate director at the PCAOB who later became a […]

Ex-KPMG Partner’s Fraud Trial: Opening Arguments

A jury heard opening arguments in a Manhattan courtroom on Feb. 12 in the trial of a former high-ranking audit partner at KPMG who was charged with conspiracy and wire fraud for his role in a scheme to cheat the Public Company Accounting Oversight Board inspection process. David Middendorf and co-defendant Jeffrey Wada, a former […]

Meddling Inspectors

The PCAOB Needs to Just Beat the Sh*t Out of KPMG Already

Story time. Many, many years ago when my favorite show was the Snorks and my Big Wheel was my only mode of transportation, there was this kid on my block who was a real little shit. He constantly broke everyone’s toys and once ran over my plastic Good Luck Bear with his bike, permanently rendering […]

The Person At the PCAOB Who Auditors Feared the Most Is Now Their Friend

In an interesting turn of events, Claudius Modesti, who was the head enforcer at the Public Company Accounting Oversight Board for 14 years before leaving last May, will now be defending audit firms that run afoul of the PCAOB and the Securities and Exchange Commission in his new role with law firm Akin Gump Strauss […]

Deloitte sign

Deloitte’s 2017 PCAOB Inspection Report Is Pretty Not Shitty

You know, when I sat down to start writing this, I contemplated some clever headline, perhaps something about a veritable smorgasbord of audit screw-ups, but then I was like, you know what, nah. We should recognize that Deloitte has posted its lowest audit deficiency rate ever, which is something worth applauding even if the fuck-up rate […]

PCAOB Hands the Keys to Chief Auditor’s Office to Deloitte’s Megan Zietsman

The Public Company Accounting Oversight Board has been without a full-time chief auditor and director of professional standards since the end of May, when Martin Baumann resigned after spending nine years in that role and 12 years at the PCAOB. For the past six months, Deputy Chief Auditor Barbara Vanich has filled that position on […]

Former PCAOB Chief Auditor Martin Baumann Backs Out of IAASB Gig

Last month, we reported that Martin Baumann, the former chief auditor and director of professional standards at the Public Company Accounting Oversight Board, was going to be the next chair of the International Auditing and Assurance Standards Board. But due to “unforeseen personal circumstances,” he’s decided not to take the job. In a statement, Baumann […]

Ex-KPMG Partner Pleads Guilty to Using Stolen PCAOB Inspection Information

The former national partner-in-charge of inspections at KPMG pled guilty on Oct. 29 for his involvement in a scheme in which the Big 4 firm repeatedly used stolen confidential Public Company Accounting Oversight Board information to cheat the regulatory inspection process. Thomas Whittle, 55, pled guilty to wire fraud and conspiracy charges, pursuant to a […]

Ex-KPMG Executive Director Admits Guilt in PCAOB Inspection Leak Scandal

A former Public Company Accounting Oversight Board inspector-turned-KPMG executive director, who was accused of obtaining confidential information on which KPMG clients’ audits the PCAOB would be reviewing so the Big 4 firm could improve its dismal inspection results, pleaded guilty in Manhattan federal court on Oct. 16 for her involvement in the scandal. Cynthia Holder, […]

Deloitte sign

PCAOB Fines Deloitte Canada $350,000 for Breaking Independence Rules Thrice on Audits of Banro

Deloitte Canada scored a hat trick of sorts on Oct. 16, but I doubt it was celebrated among the firm’s management. The firm was censured and fined $350,000 by the Public Company Accounting Oversight Board on Tuesday for failing to maintain independence during its 2012, 2013, and 2014 audits of Canadian gold-mining company Banro Corp. […]

Thumbs down BDO LLP

Those Who Know, Know BDO … Sucks at Auditing

So, the latest PCAOB inspection report of BDO USA is out, and man, it’s bad. You know it’s bad when even KPMG can do better. Well, at least according to the most recent available report, we’re still waiting on the suspiciously absent 2016 KPMG PCAOB inspection report. Anyhoo, back to BDO. They’re no strangers to […]

Martin Baumann Found a Job at Another Auditing Standard-Setter With a Five-Letter Acronym

Nearly four months after he left his position of chief auditor and director of professional standards at the Public Company Accounting Oversight Board (PCAOB), Martin Baumann has a new gig: chair of the International Auditing and Assurance Standards Board (IAASB). Baumann, who was appointed to a three-year term that begins on Jan. 1, 2019, replaces […]

Where, Oh Where, Is KPMG’s 2016 Inspection Report?

KPMG’s 2016 inspection report has still not been published by the Public Company Accounting Oversight Board, and the PCAOB won’t say why—or if the report will ever see the light of day. Compliance Week reports: The Public Company Accounting Oversight Board published its 2016 inspection results for Deloitte in December 2017 followed by reports for EY […]

kpmg china medical

Federal Judge Strikes Down Ex-KPMG Partners’ Request for SEC Evidence Search

If you’re dying to know what’s going on with David Britt, David Middendorf, and Thomas Whittle, the former KPMG partners who are accused of participating in a scandal in which confidential Public Company Accounting Oversight Board inspection information was leaked to the accounting firm, Law360 has an update: A group of former and would-be KPMG auditors […]

PCAOB Told SEC ‘Hold My Drink,’ Went All Enforcement-Crazy on Accountants in 2017

2017 was a banner year for the Public Company Accounting Oversight Board when it came to enforcement actions against accountants. For the Securities and Exchange Commission, not so much. The PCAOB finalized 35 enforcement actions involving “accountants”—otherwise known as CPAs employed by SEC registrants, auditors, and audit firms—last year, up from 28 in 2016, according […]

Broker-Dealer Audits Are Still Sloppy, But Hey, Auditor Independence Violations Are Down, So That’s Something

The Public Company Accounting Oversight Board released its report on 2017 inspections of broker-dealer audits on Aug. 20, and once again, there was some disappointing news for those who champion audit quality. According to a PCAOB press release: In this inspection period, the PCAOB inspected 75 audit firms and reviewed portions of 116 audits and […]

If You’re Really Big Into Commenting on Five-Year Strategic Plans, the PCAOB Wants to Hear From You

It’s been a slow day around GC HQ, and the weekend is almost here. But before we go, here’s a riveting article on the Public Company Accounting Oversight Board’s draft of its five-year strategic plan, which is now open for public comment. In a nutshell, a survey was sent out last April asking investors, auditors, […]

Michael Stevenson Latest to Bid Adieu to the PCAOB

Another one bites the dust. This time it’s Michael Stevenson, longtime Public Company Accounting Oversight Board deputy general counsel. Stevenson, who joined the PCAOB in 2003, had served as deputy general counsel since March 2007, according to a July 24 PCAOB press release that announced his departure. During that time, Stevenson “provided legal counsel in […]

Setback in Court For Ex-KPMG Execs, As Judge Refuses to Toss Out Counts in PCAOB Inspection Info Leak Case

As Mick Jagger sings, “You can’t always get what you want.” What three former top KPMG executives and two former employees of the Public Company Accounting Oversight Board—who are accused of participating in a scheme in which confidential PCAOB inspection information was shared with the accounting firm—wanted was for their conspiracy and wire fraud counts […]

KPMG Used Confidential Inspection Info to Snatch BBVA Away From Rivals, Report Says

If you missed this late last week, Francine McKenna of MarketWatch detailed how KPMG used access to confidential Public Company Accounting Oversight Board inspection information to poach a client from its Big 4 rivals. The client, Spanish bank BBVA, was one of nearly a dozen KPMG clients caught up in the audit inspection scandal. Others […]

Report: Court Documents Name KPMG Audit Clients Caught Up in PCAOB Leak Fiasco

MarketWatch reporter and friend of Going Concern’s, Francine McKenna, wrote an outstanding article today after digging through court documents obtained by MarketWatch that name the audit clients caught up in the KPMG audit inspection conspiracy. And there are some pretty big names. The Justice Department in January brought criminal charges against five former KPMG executives […]

pcaob-nominees-sec-jay-clayton

We Might Have New PCAOB Member Nominees Soon, Someday, Maybe

Just keeping it warm. Dave Michaels reports at The Wall Street Journal that SEC Chairman Jay Clayton’s preferred choice to lead the PCAOB is rumored to be the same person everyone thought it would be: SEC Chairman Jay Clayton wants William Duhnke to become the PCAOB’s next chairman, according to one of the people familiar […]

Big 4 Auditors Are Probably Looking Forward to More Amiable PCAOB

Michael Rapoport reports in the Wall Street Journal on the waning James Doty era at the PCAOB and that he will probably exit with unfinished business: Mr. Doty, chairman of the Public Company Accounting Oversight Board, may only have months left to pursue his wish list, including a change that would require auditors to tell […]

PCAOB Inspectors Find IT Auditors on the Struggle Bus

In case you missed the news earlier this month, all of the PCAOB reports are out for the Big 4's 2015 cycle of inspections. What schadenfreude awaits us? Let’s take a look. Big picture — regarding overall deficiency rate — PwC is the winner this year. Even if PwC is only slightly ahead, the firm […]

Exposure Drafts: It’s PCAOBeginning To Look A Lot Like Christmas

Exposure Drafts appears every other Wednesday. Send comments and suggestions to editor@goingconcern.com.

Deloitte’s Brazil Firm Covered Up a Couple of Bad Audits

The big news in the international audit firm world today is an announcement by the PCAOB that Deloitte’s Brazil firm audited badly and then covered up that bad auditing, which is also bad. The whole thing involved a dozen auditors including the Brazil firm’s former Audit Practice Leader, former Risk and Reputation Leader and former […]

The Trump Administration Will Drain the PCAOB Swamp

The election of Donald Trump is likely to transform the Public Company Accounting Oversight Board (PCAOB). While the PCAOB is technically a non-partisan private regulator, it will not likely escape Trump’s commitment to drain the swamp. Jim Doty’s term as PCAOB chairman expired in October of 2015. The PCAOB chairman is nominated by the SEC […]

PCAOB Unsure About Motives Behind Audit Firms’ Fancy New Thingamajigs

The Big 4 has been attempting to bring sexy back to auditing for awhile now, with leaders talking about innovation this and technology that, data this and 100% testing that. And that's cool, auditing needed the confidence boost, since advisory's been strutting around getting all the attention for the last decade. So yeah, we've noticed […]

Comp Watch ’16: PCAOB

PCAOB Chairman James Doty had the pleasure of presenting a budget to the SEC today and it probably could've gone better. I'd say that any time you're asking people for money it can be a little nerve-wracking, but this is the federal goverment! There's virtually no chance that you won't offend someone no matter how […]

PCAOB Unanimously Approves Auditor Disclosure Rule

Update below specifies the timing of the rule’s effect. As promised, the PCAOB is dropping its auditor disclosure rule with 9 shopping days left until Christmas. It's been quite a haul as the Board has been working this project since 2008 after the Treasury Department's Advisory Committee on the Accounting Profession recommended that audit partners […]

Learn All About Being a PCAOB Inspector From the Director Inspections

Awhile back, we solicited questions from you all about what a career at the PCAOB as inspector might be like. It took some time (I blame myself!) but we've managed to get our interview with Helen Munter, the PCAOB's Director of Registration and Inspections pulled together. First, some housekeeping: The Board video-recorded this interview between […]

More Twists in the Race to Be The Next PCAOB Chairman

John White, a prominent lawyer with Cravath, Swaine & Moore, sits on the PCAOB's Standing Advisory Group. His wife, Mary Jo, chairs the SEC. She, along with the other commissioners, will choose the next PCAOB chair. Some people don't like how that looks: The Center for Effective Government, an advocacy group, said White should step […]

PwC Out of the Running for This Year’s “Worst Performance By a Big 4 Audit Firm”

The PCAOB, bless their hearts, released a forgettable inspection report from PwC today. The deficiency rate, 29%, is still in the range we're used to, but was lower than last year, so that's something. Michael Rapoport reports that this deficiency rate is better than EY's (36%) but not as good as Deloitte's (21%) and that […]

PCAOB Going with Plan C for Naming Audit Partners

In a speech given yesterday, PCAOB Chairman James Doty said that the Board will seek comment on a third proposal for naming the lead audit partner. Doty recounts the journey so far, including the concept release that "consider[ed] engagement partner signature in 2009," the proposal for "mere disclosure" in 2011 that they sought comment on […]

PCAOB Was Born That Way

At the Wall Street Journal's CFO Network event yesterday, a nameless CFO asked SEC Division of Corporate Finance, Keith Higgins, “What gives with the PCAOB? Do they really mean to be slow and not transparent?” Although Mr. Higgins acknowledged that, "We've heard that concern," the correct answer is, "Yep! That's how audit firm lobbyists designed it!" […]

Senators Taking Another Crack at Making PCAOB Proceedings Public

Senators Jack Reed (D-RI) and Chuck Grassley (R-IA) introduced a bill in 2011 that would make PCAOB disciplinary proceedings public. Like many bills in this political climate, it went precisely nowhere. Reed and Grassley, not unfamiliar with the excruciating pace of the legislative process, are gonna try to get some momentum behind this idea again […]

What Career Questions Do You Have for the PCAOB’s Director of Inspections?

As we've discussed, it's time for you to look for a new job; yes, even if you're not interested in leaving your current gig. For the auditors out there, you may or may not have considered the possibility of joining the PCAOB. While the mere mention of the Board causes some auditors to fly into […]

PCAOB Inspection Report Gives Grant Thornton Another Swift Kick in the AS5

Just when you thought, "Boy, it's been awhile since I've seen a terrible PCAOB inspection report," here comes the PCAOB with a terrible inspection report. It's like Christmas! Well, for those of us who find this entertaining, anyway. For Grant Thornton, not so much. Out of reviews of portions of 36 audits, PCAOB inspectors found […]

SEC Tired of Telling the PCAOB How to Do Their Job

Colin buried this one in ANR this morning but let's trot it out into the light where it belongs. Michael Rapoport writes for the Wall Street Journal: Renewing criticisms from December, SEC officials said the Public Company Accounting Oversight Board should be focusing on enacting rules governing the nitty-gritty of how auditors do their jobs. […]

Let’s Speculate Wildly as to Why the PCAOB Delayed Its Budget Meeting

So, this happened: The Public Company Accounting Oversight Board today announced that it is postponing consideration of its budget for the 2015 fiscal year and the related strategic plan.  The Open Meeting for Thursday, November 20, is cancelled. Action on the budget and related strategic plan will be rescheduled later this month. Section 109(b) of […]

PCAOB Says Audit Failures Are No Longer Audit Failures

So, today, this happened: Hanson says the PCAOB has moved away from using the phrase "audit failures" in the boilerplate parts of its inspection reports. #FEICFRI14 — Accounting Today (@AccountingToday) November 18, 2014 You'll recall earlier this year, we pointed out new-ish language in PCAOB inspection reports that clarifies the definition of an audit deficiency. […]

The PCAOB May or May Not Be Trying to Stir the Pot

Edith Orenstein wondered out loud yesterday on FEI if the PCAOB is returning to its activist agenda of yore. Short of Jim Doty occupying the audit room with a bullhorn and a sign, what exactly does an "activist" PCAOB look like? She writes: Although the PCAOB dropped its proposal for audit firm rotation, the audit […]

McGladrey’s PCAOB Inspection Report Is the Least Embarrassing Thing About McGladrey

We were too busy yesterday making AS5 jokes about KPMG to talk about McGladrey's 2013 PCAOB inspection report, which was released at the same time. McGladrey is used to warming the bench over Big 4 firms so we figured they could wait for us to get around to it. The news is pretty good, at […]

The PCAOB Is Considering Naming Partners In a Separate Partner Naming Form

We're still on this, apparently, and the PCAOB isn't letting up. In an attempt to satisfy stakeholders, curious accounting tabloids, and industry lobbying groups and the firms they serve, the PCAOB is floating the idea of a new form that exists solely for the purpose of naming partners. "Form 5" would be filed shortly after […]

Save the Date: PCAOB Investor Advisory Group meeting October 20

This just in! The Public Company Accounting Oversight Board today announced that it will hold a meeting of its Investor Advisory Group on Wednesday, October 20, 2014. Topics that the IAG will present to the Board include: ·         The audit firm business model and incentives ·         How to improve audit quality and the relevancy of […]

Let’s Argue Over the Best Place to Put Audit Partners’ Names on Reports

You may have noticed an important article Colin shared in ANR this morning, one which explains the most contentious issue in accounting today (besides the GC most overrated list). From Michael Rapoport over at the Wall Street Journal: The Public Company Accounting Oversight Board, the government's audit regulator, expects to give final approval in the […]

PCAOB Issues Staff Audit Alert on Auditing Revenue Because Auditors Suck at Auditing Revenue

The PCAOB would like to see auditors get better at a lot of things; showing their work, testing controls, auditing in general. In particular, they would like to see auditors get better at auditing revenue because revenue is so dang important to the big picture here, people. "Revenue is one of the largest accounts in […]

The PCAOB Has Added Some Interesting New Language to Inspection Reports

While we were ragging on EY yesterday for taking it up the AS5 from the PCAOB, we happened to notice some interesting new language in the inspection report. Now, this is not surprising as the PCAOB clarifies itself often, but let's see what you think about this: Certain of the deficiencies identified were of such […]

Audit Partners Will Definitely Be Named, We Just Don’t Know Where or How

This from ProPublica: In a letter dated August 15, Jeff Mahoney, the general counsel for the Council of Institutional Investors, a nonprofit that represents investment organizations with more than $3 trillion in assets under management, wrote, "to express our surprise and disappointment in the report earlier this week in the New York Times that the […]

According to This, Audit Partner Naming Is No Longer on the PCAOB’s To Do List

We found an interesting bit in a DealBook piece about Mary Jo White's impotent SEC we felt would be important to share with you: On yet another front, the S.E.C. is embroiled in a quiet battle with the Public Company Accounting Oversight Board, the accounting industry regulator created after the Enron-era scandals. The accounting board […]

PCAOB Settles With PwC Partner Who Screwed Up the ArthroCare Audit

Let this case serve as a lesson to all partners in charge: if you don't do good audits, you will be bankrupted and sent to prison for criminally negligent auditing. Oh wait, no you won't. Carry on: The Public Company Accounting Oversight Board today announced a settled disciplinary order against Randall A. Stone, CPA, of […]

PwC Slightly Better at Auditing This Year, Says PCAOB Inspection Report

Rejoice, people, PCAOB Inspection Report season continues! From PwC's fresh off the presses 2013 inspection report: The 2013 inspection of the Firm included reviews of portions of 57 audits performed by the Firm and reviews of the Firm's audit work on two other issuer audit engagements in which the Firm played a role but was […]

Grant Thornton Fails to Take Up the PCAOB’s Offer to Get Better at Auditing

The good news for Grant Thornton is that they managed to take remedial actions related to their 2010 inspection report and addressed criticisms to the satisfaction of the PCAOB. Cheers!  The bad news is that the same cannot be said for their 2008 and 2009 reports. The quality control remediation process is basically a way […]

PCAOB Adopts Auditing Standard No. 18: Crony Disclosures

Let us welcome into the world a new auditing standard:

PCAOB: Audit Firms Missing the Point of Auditing

Audit firms are still having some trouble pleasing the audit overlords at the PCAOB — particularly with Auditing Standard No. 5. ICFR is the new WTF, though the PCAOB sees audit firms making progress. Unfortunately, the firms are also kinda missing the point of this whole exercise. Compliance Week has the details: The next round […]

The PCAOB Has a Flickr and It’s Everything You’d Expect it to Be

Earlier today when I was pulling a press release off my fifth most visited website after GC, the Daily Mail, Facebook, and perhaps a tube that shall remain unnamed, I noticed the fancy little icons at the top of the page letting me know that the PCAOB has a Flickr account. Perplexed, I immediately gchatted […]

The PCAOB Is Looking For a Few Good SAGs

Full press release is below as we don't care enough about this to spend an hour rewriting it: Washington, DC, May 1, 2014 — The Public Company Accounting Oversight Board is soliciting nominations for its Standing Advisory Group (SAG) for the 2015-2017 three-year term. The deadline for submissions is June 30, 2014. The Board is […]

CohnReznick Is Probably Better at Audits Than You, Per PCAOB Inspection Report

Yesterday, we shared McGladrey's not-all-that-bad inspection report results. Now, it's time to crown a world champion audit firm… CohnReznick! The words every audit firm wants to hear from the PCAOB: The inspection procedures included a review of aspects of the Firm's auditing of financial statements of 11 issuers. This review did not identify any audit […]

McGladrey’s Latest PCAOB Inspection Reveals McGladrey Is Not Grant Thornton

Well, the PCAOB is slowly but surely cranking out more 2012 inspection reports and today, McGladrey gets to celebrate an accomplishment: being better at auditing than Grant Thornton (though I suppose given GT's embarrassing audit failure rate, that isn't saying much). Not only that, they're slightly better than EY and only slightly worse than PwC. […]

Per PCAOB Board Member, Facebook Will Not Sufficiently Prepare You As an Auditor

"For new accountants, the focus on documentation can be a difficult transition — the world of texting, Facebook postings, and tweeting may not fully prepare you. And, of course, communication skills are important even beyond the accountant's documentation of audit procedures. Being able to express yourself effectively is key to your relationships with your co-workers […]

If China Won’t Play, the PCAOB Will Find Someone Else to Play With

Keep holding out, China, the PCAOB don't need to check your stinkin' work anyway: Washington, DC, March 31, 2014 — The Public Company Accounting Oversight Board today announced that it has entered into a cooperative agreement with the Supervisory Board of Public Accountants (RN) of Sweden relating to the oversight of audit firms subject to […]

Save the Date: PCAOB April Public Meeting on the Auditor’s Reporting Model Proposal

The PCAOB is preparing for its April 2-3 public meeting this week, and while I really wanted an excuse to spend two days in Washington trolling the PCAOB IRL, I decided catching the webcast from the comfort of my Lovesac in my pajamas was a much better decision. The panelists aren't much to write home […]

One Guy at the PCAOB Thinks the PCAOB Should Consider Its Language

Aha! Pointy-headed professors aren't the only ones who think the PCAOB's use of the term "audit failure" is totally dramatic and possibly unnecessary. From the JofA: The PCAOB’s use of the term “audit failure” in its inspection reports of audit firms appears to have caused confusion and misunderstanding about the severity of inspection findings among […]

Per the PCAOB, Being Registered with the PCAOB Isn’t the Same as Being Scrutinized by the PCAOB

For some of you, being subject to PCAOB inspection is easily the worst part of your miserable life. For others, simply registering with the PCAOB can lend the kind of automatic credibility shitty restaurants get by slapping a "People Love Us on Yelp" sticker in the window. Imagine boasting you are "PCAOB-registered" without never having […]

Is the PCAOB’s “Audit Failure” Rate Really a Little Dramatic?

Here's the deal. Last week, Mark Peecher and Ira Solomon published an opinion piece on CFO.com titled PCAOB’s ‘Audit Failure’ Rate Is Highly Suspect. Just so we know these guys might have some idea what they are talking about, Mark teaches accounting at the University of Illinois Urbana-Champaign and Ira is dean of the A. […]

The PCAOB’s Valentine’s Day Gift to Us is More Time to Comment on Partner Naming

Compliance Week has our friendly reminder that if you have something to say about audit partner naming, you better speak now or forever hold your peace: As preparers wrap up their year-end financial reports, they'll have a few extra weeks to make their views known on a proposal to begin naming engagement partners in the […]

Forget Auditor Rotation, the PCAOB Has Bigger Fish to Fry in China

As you know, I sat through the SEC Open Meeting webcast yesterday just to catch the copious number of thank yous, Doty giving the prepared remarks I already had, and the conclusion we all knew the SEC would come to, which was approving the 2014 PCAOB budget. BOR-ING. Well out of that meeting, everyone seemed […]

After an Afternoon of Thank Yous, the SEC Has Approved the PCAOB’s 2014 Budget

In case you missed the thank fest that was today's SEC Open Meeting, the PCAOB showed up to get its 2014 budget of $258.4 million approved by the Commission after everyone went around the room and thanked one another for their hard work for capital markets. Repeatedly. Chairman Jim Doty validated the $12.8 million increase […]