This is not the first time that the alleged marriage between Vienna, Virginia based software developer MicroStrategy and the auditors and consultants at PricewaterhouseCoopers has been in the news. The SEC is convinced that the aggressive use of prematurely booking revenue which may have overstated profits at MicroStrategy was first recommended by PwC consultants then passed on by PwC auditors.
Whether or not there was any impropriety with MicroStrategy's financial reporting and their subsequent audits remains to be seen. The bigger issue, however, is how the SEC is going to rule when it comes to auditor independence.
Public hearings on the proposed guidelines to limit the ability of public accounting firms to perform consulting services are set for next week and representatives from all the major accounting firms are lining up to have their say. Stay tuned as we continue to report this story which will have an impact on accountants everywhere.