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Big Changes Afoot in the Audit Industry

By broc

Big Changes Afoot in the Audit Industry

We all know about globalization in accounting standards, IFRS, etc. We know that the accounting industry is being closely studied for reform, with a series of changes (eg. limiting liability) being kicked around by the SEC's Advisory Committee on Improvements to Financial Reporting and the Treasury Secretary's "Blueprint" for a modernized regulatory structure.

But we haven't heard much about how the Big 4 might be taking action itself. In this podcast, Francine McKenna, CEO of McKenna Partners (and a fellow blogger on re:theauditors.com) discusses some of the new structural developments, including analying Ernst & Young's announcement to merge its European partnerships and integrate a further 42 countries into a single unit. This is a bold shift by a Big Four firm to overcome the country-level legal and regulatory restrictions that have limited the Big 4 national partnerships and frustrated their efforts to mirror the global reach of their multinational clients.

Auditors' Access to Board Minutes: Results of Our Quick Poll

A few weeks ago, I blogged a poll about auditors asking to review board minutes. The poll results indicated:

- 40% allowed auditors to read them, but not copy them
- 18% provided auditors with a copy to take, with privileged parts redacted
- 36% provided auditors with a full copy to take
- 7% don't allow auditors to review minutes

On her blog, Francine McKenna discussed these results:

I have answered the poll as I believe one of my former clients would have. This former client, still completing several years of restatements, having made a fairly recent change in auditors, subject of internal and SEC investigations, defendant in more than a few lawsuits, and the recipient of assorted Sarbanes-Oxley material weakness and significant deficiencies, has no choice but to do whatever their new auditor asks. I believe their auditor has them by the short-hairs.

However, it looks like there are more than a few companies, more than 65% of the respondents to the poll, that believe that keeping information from their external auditors, perhaps under the guise of privilege, is ok and good policy. Who, in heck's name, are their auditors?

Advance Notice Bylaws: Delaware Supreme Court Affirms Jana Partners

Yesterday, the Delaware Supreme Court issued this Order affirming the decision of the Court of Chancery in the CNET/Jana matter.

JPMorgan Chase/Bear Stearns: Splicing the Delaware Issues

Today, join DealLawyers.com for the rescheduled webcast - "JPMorgan Chase/Bear Stearns: Splicing the Delaware Issues" - as Professors Elson, Davidoff and Cunningham analyze a host of novel provisions in the JPMorgan Chase/Bear Stearns merger agreement.

- Broc Romanek

Full post as published by The Corporate Counsel.net Blog on May 14, 2008 (boomark / email).