Auditor Independence

A Push for Audit Quality Could Send Costs Higher

Tammy Whitehouse May 15, 2012

After several large audit firms scored poor marks on their most recent round of audit inspections, many are responding by stepping up their game. They are investing more in training and staff, and planning on giving problem areas more scrutiny—all of which could drive costs higher. "We are doing a number of things differently," says Robert Moritz, chairman of PwC's U.S. operations. More inside.

PCAOB Gets Mandate: Tone Down Rotation Talk

Tammy Whitehouse March 29, 2012

Congress has given the Public Company Accounting Oversight Board a clear warning to tone down talk of mandating audit firm rotation, especially since the audit regulator hasn't produced hard evidence that the benefits will outweigh the costs. During a House committee hearing last week, members of Congress said the PCAOB may be overstepping its authority on the issue.

PCAOB Starts Audit Reform Debate

Tammy Whitehouse August 23, 2011

The Public Company Accounting Oversight Board launched its shake-up of the auditing world last week, floating the idea of term limits for audit firms and their public company clients. Audit firms blast rotation as a draconian solution ill-suited to industry problems. "When, all of a sudden, do you become not independent?" asks Tim Follett of the firm Mayer Hoffman McCann. "There's no hard line in the sand on that."

PCAOB Opens Debate on Term Limits for Audit Firms

Tammy Whitehouse August 16, 2011

The Public Company Accounting Oversight Board has now asked the hugely controversial question of whether public companies should be required to switch audit firms every few years, one idea among many the board is considering to reduce the risk of audit firms failing to catch erroneous financial reports.

Overseas Audit Deal Challenges Independence Notion

Tammy Whitehouse August 21, 2009

An overseas audit deal between Rentokil Initial and KPMG has raised eyebrows in the United States, prompting the Institute of Internal Auditors to remind capital markets of the significance of auditor independence.Rentokil Initial is a British-based company that asked its external audit firm, PricewaterhouseCoopers, and KPMG to provide proposals for...

CAQ Offers Investors Lessons on Auditing

Tammy Whitehouse May 13, 2009

The Center for Audit Quality is touting the role of auditors in capital markets with a consumer-focused guide to investors explaining what auditors do.The “Guide to Public Company Auditing” is a broad, basic overview of the auditor’s role in providing assurance that a company’s financial statements are fairly stated. It...

Fees Suggest Audit Firm Independence Remains Steady

Tammy Whitehouse May 05, 2009

The proportion of audit vs. non-audit fees paid by public companies to their audit firms held steady in 2007 after the dramatic shift that occurred with Sarbanes-Oxley.According to the latest data from Audit Analytics, fees for audit work paid by public companies to audit firms accounted for 79 percent of...

Study Says Better Outcomes With Just One Auditor

Tammy Whitehouse February 06, 2009

Emerging academic research suggests companies may be better off having one audit firm assist with both the internal and external audit, punching holes in the Sarbanes-Oxley tenet that external auditors aren’t adequately independent if they assist with internal audits.Three accounting professors looked at the outsourcing of the internal audit function...

PCAOB Tells Auditors to Get More Skeptical

Tammy Whitehouse December 09, 2008

Auditors need to get more skeptical and supervisors need to get more engaged when it comes to crucial, high-risk financial reporting areas, according to a recent report from audit regulators.The Public Company Accounting Oversight Board said audit deficiencies persist in many cases because auditors aren’t skeptical enough, especially at the...

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