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.
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Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.