How to Call the PCAOB a Bunch of A$$hats, Respectfully of Course


pic credit: Married to the Sea



FEI Financial Reporting blog shows us how in a few simple steps:

  1. Identify what the PCAOB would like to do and point out that the SEC is doing the same. There's nothing like tossing the SEC in there to make your point.
  2. Explain - politely - after disclaimering yourself why you think this is a bad idea.
  3. Don't use any F words.

I commend FEI's work. Not all of us can behave so professionally when discussing the subject.

Oh, so, here's what they are trying to do:

In a parallel move, the Public Company Accounting Oversight previously announced it would form its own Investor Advisory Group (IAG), and yesterday announced the inaugural members of the PCAOB IAG.

As noted in the PCAOB IAG's Charter, the IAG is formed by the PCAOB under PCAOB's authorities established under the Sarbanes-Oxley Act. (Accordingly, there is no preset time limit on the life of the committee, although the Charter includes a provision that no member of IAG can serve for more than 9 consecutive years.)

Among other differences of note in how the PCAOB IAG will operate vs. the SEC IAC, the PCAOB IAG Charter states: "At the discretion of the Chair, the IAG’s meetings or portions thereof may be open to the public" - which tells me that the PCAOB IAG may also, in theory, hold meetings that are not open to the public/not webcast. This possibility differs from the requirements placed on the SEC IAC by the Federal Advisory Committee Act, Section 10 (a) (1), (as posted on http://www.accessreports.com/) which states: "Each advisory committee meeting shall be open to the public."

Again, rearranging deck chairs on the Titanic I see. I, too, have a disclaimer and you should know it by now.

This is good for entertainment value and not much else. Meanwhile, KPMG is banned from Uzbekistan and no one seems to care. Come on, we already know why this is useless.

Accounting Onion already told us this answer:

[O]f the 750 audit firms out there, 99% of them audit an aggregate 1% of the reported revenues of public companies! The presenter made the point that all audit firms are thoroughly inspected, so it would not be outlandish to guess that significantly more than half of the PCAOB's inspection resources (> $65 million) are protecting the public against the equivalent of a flea bite on the hindquarters of a bull (market). And, add to the PCAOB's waste of its own money, the significant costs imposed on small audit firms of submitting to PCAOB inspections.

Fuck that. + Disclaimer.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

1 comments:

Junior:
Francine and I have made Tom Selling's point repeatedly. Six firms audit 99.2% of the market cap of SEC registrants. Why is the PCAOB looking at the other other 1790 CPA firms? Why does the SEC obsess over small SEC registrants prospectuses and ignore what goes on at AIG, Goldman and the other "usual suspects" until it is too late to do anything effective? Who owns who?

"Pop"