SEC Urged to Speed Up Investigations

In an interview reported in the Financial Times today, Jim Copeland, CEO of Deloitte Touche Tohmatsu, urged the SEC to speed up its investigative processes and bring more definitive conclusions to its investigations of audit failures.

Mr. Copeland lamented the fact that the credibility of the auditing profession was at stake when investigations drag on for many months or sometimes many years. "You never come to closure on these things," he said. "You never hear: 'OK, the company failed but it wasn't an audit failure.' "

Privately, the SEC has acknowledged the need to speed up investigations, according to the Times article.

Part of the problem lies in the fact that details of investigations are available to outside parties, many times those same parties that ultimately end up in litigation with the accounting firm. Mr. Copeland believes that the firms would be more open to cooperating quickly with the SEC if there was some assurances that these third parties would not have access to the information.

Multi-million dollar judgments against auditing firms have taken a big bite out of profits this year for several of the Big 5 firms. And those kinds of lawsuits, predominantly focused on US companies, are not sustainable, according to Mr. Copeland.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.