Posted By: Staff Editor In: Accounting & Finance The Public Company Accounting Oversight Board is proposing rules which help the Big Four audit firms handle some potentially sticky situations.
The Public Company Accounting Oversight Board is proposing rules,which in a roundabout way, help the Big Four audit firms handle some potentially sticky situations.
Under the Section 102(d) of 2002 Sarbanes-Oxley Act, a registered public accounting firm may be required to report more frequently on company events to the Board.
Now the Board is proposing that audit firms file a report when it withdraws an audit report from previously OKed financial statements for a company. Typically, this is reported by the company on its website or its filings to the SEC. But it does not appear that they are obligated to do so.
And the hapless accounting firm has no avenue to make sure that the public is alerted. Any Big Four alum knows that publicizing such events on the Big Four website (the only other route) is a recipe for disaster.
So now, the audit firms have to report this to the PCAOB on a mandated basis. This is a blessing in disguise for investors, a happy situation for auditors and a tougher spot for companies with restated financials. We have to see how this gets debated, and accepted into procedure. It is going to be interesting when these reports really start coming out to the public.
Article provide by www.big4.com
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