PCAOB Chief Warns Auditors of 'Grave Consequences' For Misdeeds

William McDonough

William McDonough, the head of the Public Company Accounting Oversight Board, issued his first public policy address this week, and his tone left no question about his approach to oversight.

"I expect that you, as members of a regulated profession, know what the rules are. I expect that you are following those rules, both in their letter and their spirit," McDonough told a group at a conference of the Foundation for Accounting Education of the New York State Society of Certified Public Accountants.

"If you depart from those expectations -- that is, if you break the rules, if you ignore the spirit of the law even while meeting the letter -- woe be unto you. There will be consequences, and they will be grave," McDonough said.

The PCAOB will be inspecting all accounting firms which will be auditing public companies. "We will pry into your records and your work habits, and, yes, the rules will change," McDonough said.

Mr. McDonough indicated that he is committed to helping the profession restore its reputation, which he admitted was tarnished by a few rogue members. "I would not be here as [PCAOB] chairman, if the accounting profession had not already been weighed and found wanting."

Mr. McDonough reminded the participants that the deadline is here for firms to be registered with the PCAOB. Non-registered firms will be prohibited from auditing public companies.

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 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.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.