Audit Firm Litigation,Fin'l Info Released By Treasury, CAQ;Att'y-Client Priv. Bill Gains Support;FASB, Lawyers Meet on FAS 5

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By Edith Orenstein, FEI Financial Reporting Blog - In a little noticed development, the U.S. Treasury Advisory Committee on the Auditing Profession (ACAP) released information on the litigation exposure and other financial, governance and human resource information of the six largest audit firms. The information consists of 3 separate reports provided to ACAP earlier this year by the Center for Audit Quality (CAQ), affiliated with the AICPA. CAQ gathered the information from the audit firms for consistency, used a law firm to help organize the data, and provided detail in the aggregate, or in some cases, in the form of averages, to protect confidentiality of the individual firms.

Separately, Jim Peterson and Francine McKenna have commented in their blogs recently (Re: Balance and Re: The Auditors, respectively) on ACAP's liability discussion.

In other news, on the attorney-client privilege front, Lynnley Browning reported in yesterday's (June 23) New York Times, in an article entitled, "Bill to Protect Companies in Inquiries Adds Support," that "Nearly three dozen former federal prosecutors have thrown their weight behind a Congressional bill intended to safeguard confidential communications between lawyers and their clients, a legal bedrock that has come under attack amid corporate fraud scandals."

Separately, FASB board member George Batavick and FASB Director Russ Golden said on FASB's Mid-Year Update webcast yesterday that FASB met last week with representatives of the legal profession to discuss matters relating to FASB's proposed amendments to FAS 5 and FAS 141R for loss contingency disclosures.

Read more about the above topics here.

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