CPAs shine at raising ;nancial literacy
Killer VARs: How the best resellers survived the downturn
SEC calls for comment on IFRS work plan
The personalities of tax returns
More on states’ attempts to raise revenue
What happens if the Bush tax cuts sunset?
Reporting issues and health care reform
FASB issues receivables standard
the spirit of accounting
In praise of fair value
Keeping skittish clients in the market
Write-up: Not glamorous, but necessary
Building better performance evaluations
Finding the stars in your ;rm
The Great PR Opportunity
Tell the stories behind the numbers
Preparing for a disaster
Generational Viewpoints: What makes a leader?
22 VAR News
52 New Products: Software
53 New Products: Books
54 M&A Watch
57 Coming Events
61 Advertiser Index
A tale of two transparencies
I’ll be the ;rst to admit that I have little patience for looking for things, a trait that has annoyed my better half for nearly a quarter-century. Whether it be missing socks, a screwdriver or last month’s bill from Home Depot, I usually require the use of a GPS to locate it.
Apparently those lawmakers who crowed incessantly about how the 2,300-page ;nancial reform bill
would prevent conditions that led to the current economic crisis are about as skilled as I am at the art
of lost and found.
;e Dodd-Frank Wall Street Reform and Consumer Protection Act is
a piece of legislation that will “ensure that something on the scale of AIG
never happens again.” I’m paraphrasing our chief executive.
Sort of like the ;nancial reform version of the Speaker’s pledge to
“drain the swamp” regarding dubious ethics among lawmakers.
I could ask why a massive reform bill didn’t bother to “reform” the
bleeding twins known as Fannie Mae and Freddie Mac, which collectively have siphoned o; nearly $150 billion courtesy of the taxpayers and,
unlike the recently capped BP well, promise to keep on gushing.
;ose who promised greater transparency also must have missed the
provision in the bill that allows the Securities and Exchange Commission
to veto information requests from the public under the four-decade-old
Freedom of Information Act. I’m not exactly sure how that provision
aligns with the promised mantra of greater transparency, but conversely,
I was pleased with a pair of recent e;orts from the Public Company Accounting Oversight Board.
;e ;rst was a petition to allow the audit overseer’s disciplinary hearings of accountants and accounting ;rms, along with the related proceedings, to be made public. ;e second is a strategy to crack down on
supervision failures at audit ;rms, and not just audit de;ciencies, and
impose sanctions on ;rms that don’t adequately supervise their sta;s.
With the former, Acting PCAOB Chairman Daniel Goelzer has instructed the PCAOB’s sta; to draft
a congressional proposal requesting the change to the Sarbanes-Oxley Act. Currently the disciplinary
hearings are kept con;dential and a ;rm is granted up to one year to correct any audit de;ciencies
found in a PCAOB inspection report. However, under current law, ;rms and auditors litigating with
the PCAOB have little or, in most cases, no incentive to consent to public proceedings, which is probably the time when information gleaned from a de;cient audit report would be of the most use to the
public. Goelzer rightfully argued that under the current format, all interested and a;ected parties are
more or less “kept in the dark” about how the PCAOB deploys enforcement authority, or whether there
is a settlement or sanction.
With regard to the latter e;ort, the audit overseer issued a two-part release last month that highlighted
the SOX provision that authorizes the board to sanction registered audit ;rms and their management
who have failed to supervise subordinates who have committed audit violations. Apparently, PCAOB
inspections have uncovered the not-so-surprising fact that the supervisory processes at audit ;rms are,
in many cases, wanting. ;e PCAOB is mulling whether such rules would further the public interest and
protect investors, and is currently soliciting public comments.
But I’ll weigh in now and point to the board’s recent e;orts as an example of transparency that was
not all that hard to ;nd.
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