Deloitte to Create Model For Investigating Business Failures

James E. Copeland, chief executive officer of Deloitte & Touche, has announced his firm is assembling a team to develop a model for a new approach to restoring investor confidence. The new approach involves creation of a national board to investigate business failures and recommend steps to prevent similar failures in the future.

The concept is reminiscent of a similar initiative for audit failures introduced by the Public Oversight Board in the mid-1990s. Under the leadership of then POB chairman A. A. Sommer, the role of the profession's Quality Control Inquiry Committee was expanded to permit inquiry into whether there was a failed audit, and if so what caused it and how could similar problems be avoided in the future.

Both Mr. Copeland and Mr. Sommer have used the analogy of the National Transportation Safety Board (NTSB), which investigates airplane crashes. Mr. Copeland's concept is broader, encompassing failed businesses, (rather than just failed audits), and he suggests making the new board an independent public agency, (rather than a part of the accounting profession's peer review process). The new agency would work with, but not displace, the investigatory roles of the Justice Department, Congress and Securities and Exchange Commission.

The new board has been tentatively dubbed the National Financial Review Board. It is not clear at this time whether Mr. Copeland envisions a board with subpoena power or one that would specifically address the roles played by auditors prior to business failures. But the details may soon become clearer, as Deloitte's multidisciplinary team completes its study and makes its recommendations on how the new board should be structured, governed and financed. The team will consist of partners, principals and other professionals with auditing, risk management and public administration experience.

-Rosemary Schlank

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...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.