Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

More good stuff for auditors – 6-19-13

with 2 comments

More good stuff for you to ponder – FRF-SMEs (aka small GAAP from the AICPA) and naming the parters on public company audits:

Going Concern – NASBA Stands Behind FASB’s Private GAAP, Can’t Believe the AICPA’s Chutzpah– NASBA is so opposed to FRF-SMEs that it is developing model language that would prohibit the use of that form of OCBOA (that’s the old term) unless a state board approved it.  

Going Concern – AICPA Knows NASBA is Mad But It’s Okay, NASBA Gets Mad Sometimes AICPA sends an email to the state societies CEOs reminding them it is the responsibility of organizations and their CPAs to figure out which financial reporting framework is most appropriate.

I’m not quite sure when NASBA gained the authority to decide what reporting frameworks are acceptable.

Accounting Onion – NASBA Blackballs AICPA from the Standard Setters’ Club – Tom Selling gives background on why AICPA moved out of the standard setter role and why they should stay out. Points out the FRF-SME has so much flexibility that financial staetments under that frameword won’t mean much.

Forbes – PwC Partner At MF Global Has Long, And Mixed, Track Record– Francine McKenna highlights the career path of one PwC partner that seems to intersect a high proportion of the accounting fiascos over the last few decades. A depressingly effective argument for disclosing names of the lead partner on audits.

re: The Auditors – Who Is The PwC Partner Responsible for MF Global? Someone With A Lot of Baggage – Continued discussion by Ms. McKenna about the PwC partner. A very minor secondary point is lesson-learned for all of us to clean up our LinkedIn profile – it could reveal information you’d rather not get too much visibility. By the way, reporters read them too, not just coworkers from back when.  Major point of this discussion for me is that this issue, and also disclosure of the name of lead partner, is about auditor quality, not improving audit quality.

Both of those articles make for a depressingly effective argument in favor of disclosing the names of key partners on public audits.

Written by Jim Ulvog

June 19, 2013, 9:35 am at 9:35 am

Posted in Accounting, Audits

2 Responses

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  1. Dear Jim,

    Glad to see you’ve come around to the idea that disclosing names and career histories of audit partners is essential to proper functioning of the capital markets.

    Francine

    Francine McKenna (@retheauditors)

    June 28, 2013, 12:39 pm at 12:39 pm

    • Hi Francine:

      I still have a bit of denial floating around in my brain, so give me a few more posts. Big shift for me is going from the idea that disclosure will improve audit quality to the idea of disclosing to investors the full player roster so investors can decide how to interpret the report.

      I still don’t think that disclosing names will have *any* impact on audit quality. If the risk of spending years in litigation, loosing your license/retirement fund/home, or seeing your name on the front page of the WSJ hasn’t already given your brain laser focus on getting the audit right, then publishing names won’t do a bit of good.

      However, it would be a good thing to give investors a tool that can allow tracking over the course of a decade which partners are really easy to get along with, who just can’t seem to hold on to clients that get busted for playing games years later, and the bulk of average partners who just keep grinding out decent work for a roster of clients none of whom have ever got their name in your articles or at the top of a US Attorney’s press release. Figuring out which partners are in which category would be good.

      Jim

      Jim Ulvog

      June 28, 2013, 13:34 pm at 1:34 pm


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