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An Open Letter To the PCAOB From the Going Concern Comment Section

Posted on by Adrienne Gonzalez

I believe this particular PCAOB-hostile grunt has spoken:

Dear Mr. G – I hate to break this to you, but accountants do not respect the PCAOB. We HATE the PCAOB. This organization does nothing but bring misery to our lives, for no matter how good our work product is, this group comes along and finds something wrong with it. That's a pretty easy task given the subjective nature of audits, sample designs, materiality and professional judgements [sic].  And since the PCAOB is the regulator, it is always right….even when it's wrong! Hopefully a Republican will get elected and make good on his promise to overturn Sarbanes Oxley, which would mean the end of the PCAOB as well.

That sounds really angry, can we talk this out, bro? I don't believe that there are actually any Republicans out there willing to take on Sarbanes-Oxley and the PCAOB, but you keep thinking that if it helps you survive your day.

Can you give us specific examples of the PCAOB being wrong? I'm not saying they haven't been, I'm saying if you have personal experience with specific "wrong" issues and you haven't already emailed the details to GC from your personal email account, shut your pie hole.

Or if you want to keep your job and prefer not to violate your precious covenant with your firm by sending us workpapers, how about you write a manifesto about your experience with these alleged leeches from the PCAOB who bother all of you auditors like you all bother your clients?

Don't sit there and yell at the Roundup, blockhead.

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The PCAOB’s Date at the Supreme Court Has Finally Arrived

Thumbnail image for pcaob.jpgFor those of you that don’t religiously follow the happenings over at the SCOTUS, we’ll remind you that oral arguments are being heard today in Free Enterprise Fund and Beckstead and Watts, LLP v. Public Company Accounting Oversight Board.
The issue before the court, according to SCOTUS Wiki:

Whether the Sarbanes-Oxley Act is ��������������������ration-of-powers principles – as the Public Company Accounting Oversight Board is overseen by the Securities and Exchange Commission, which is in turn overseen by the President – or contrary to the Appointments Clause of the Constitution, as the PCAOB members are appointed by the SEC.


An op-ed in today’s Wall St. Journal ignores the “legal hairsplitting” of the case and instead focuses primarily on the cost that companies have taken on implementing Section 404:

In 2003 the SEC estimated that the average company could do much of its internal controls work for $91,000 per year. In 2007, the commission acknowledged costs had gotten out of hand, particularly for smaller companies, and told the PCAOB to make the internal controls audits more cost-effective.
In 2008, the SEC’s Office of Economic Analysis launched a survey of public companies to judge the results, and it recently posted the findings on the SEC Web site, after collecting data from thousands of corporations.
Section 404 is still consuming more than $2.3 million each year in direct compliance costs at the average company. The SEC’s survey shows the long-term burden on small companies is more than seven times that imposed on large firms relative to their assets. Are the internal controls audits helpful? Among companies of all sizes, only 19% say that the benefits of Section 404 outweigh the costs. More respondents say that it has reduced the efficiency of their operations than say it has improved them. More say that Section 404 has negatively affected the timeliness of their financial reporting than say it has enhanced it.

Not surprisingly, The Journal (specifically James Freeman) is pulling for the Plaintiffs in this case without presenting any of the positive contributions of SOx. Ultimately, the nine justices will determine the fate of the PCAOB, which if found unconstitutional, could have wide repercussions on all the auditors out there. We just spent the better part of a decade getting this SOx stuff down, and now it’s possible that it could’ve been a giant waste of time. Makes you feel good, doesn’t it?
For those of you interested in this case further, you can hear the oral presentations via podcast, over at SCOTUS Blog.
We invite our legal friends with perspective on this case to share their insights and predictions on this case. Hell, even if you’re not a legal scholar, share your thoughts. And just for fun, take a stab on what you think the outcome of the case will be by voting in the poll below.


The Supreme Case Against Sarbanes-Oxley [WSJ]