BDO Seidman Report Adds to Turmoil in Post-Pitt Era

Confidential documents released by BDO Seidman are fueling concerns about the future of accounting reform. The documents dispute statements made by William Webster, head of the Public Company Accounting Oversight Board (PCAOB).

Mr. Webster chaired the audit committee of US Technologies, a company now facing fraud charges. He reportedly told the press the company fired BDO over a billing dispute. But BDO says it was an accounting dispute. To prove its point, BDO got permission from its former audit client to release documents sent to the audit committee a month before it was fired. The documents list BDO's concerns about material control weaknesses and cite Mr. Webster as a participant in the call.

The nature of the dispute raises questions about why Mr. Webster did not investigate the weaknesses cited by BDO. A report by Reuters said Washington insiders are already speculating about possible replacements for Mr. Webster. The list includes John Biggs, as well as Charles Bowsher and Aulana Peters, both of whom served on the accounting profession's Public Oversight Board.

Controversy over Mr. Webster's appointment led earlier this week to the resignation of Securities and Exchange Commission Chairman Harvey Pitt. Many observers expect Chairman Pitt's successor will appoint a new chief accountant to replace Robert Herdman who is also involved in the controversy over Mr. Webster's appointment. The resulting turmoil and turnover comes at a pivotal time for accounting reform, causing concern that reforms will be derailed because of delays in rule-making initiatives mandated by the Sarbanes-Oxley Act.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.