PCAOB Releases 2009 Inspection Report on PricewaterhouseCoopers, 9 Issuers Cited

John Fowler, Big4.com

August 16, 2010

PCAOB just released its 2009 annual inspection report on PricewaterhouseCoopers using inspections from October 2008 through October 2009 at the Firm's National Office and at 34 of its approximately 61 U.S. assurance practice offices.

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PCAOB Inspection of Ernst and Young – But Which One is Lehman?!

John Fowler, Big4.com

July 8, 2010

PCAOB just released its 2010 annual inspection report on Ernst & Young using inspections from October 2008 to October 2009 at 30 of its approximately 80 U.S. practice offices of 58 audits performed by the Firm.

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Sarbanes Oxley Unscathed by Supreme Court Decision, Big Four Also Win

David Nelson, Big4.com

June 29, 2010

We blogged yesterday about the impact of the Supreme Court decision on the Public Company Accounting Oversight Board, which was mainly procedural rather than operational. Apart from requiring that PCAOB members could be removed by the Securities and Exchange Commission “at will” rather than “for cause”, the Court did not require any significant changes in the operation of the PCAOB.

All is well also on the flip side.

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PCAOB Can Operate As Usual, Despite Supreme Court Decision

David Nelson, Big4.com

June 28, 2010

A deeper reading of today’s Supreme Court judgment reveals two critical points:

One

PCAOB Board members are removable by the Securities and Exchange Commission (SEC) only for good cause. However, the Court had an issue with how the Board members could not be removed by the President of the United States, even for good cause. Since PCAOB was considered part of Government, it had to function in sync with the President’s agenda, and thus he should have full power over appointing anyone and removing anyone he chose from the PCAOB hypothetically for any reason. The Congress of the United States through the Sarbanes Oxley Act, in effect prevented the President from removing PCAOB members and thus fully managing the Executive Branch. This was against the Constitution’s fundamental separation of powers, thus unconstitutional.

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US Supreme Court Rules PCAOB Law Is Unconstitutional

David Nelson, Big4.com

June 28, 2010

“We are asked, however, to consider a new situation not yet encountered by the Court.”

This sentence in the opinion of the the Supreme Court of The United States (SCOTUS) says it all – they and we are dealing with new material and new situations hitherto not encountered.

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What Will Audit Firms Do On Their PCAOB Annual Reports?

June 18, 2010

David Nelson, Big4.com

June 30, 2010 is rapidly approaching, and it is a key deadline for US audit firms.

The Public Company Accounting Oversight Board (PCAOB) requires all its registered firms (over 2,200 of them) to file an annual report with the Board, with the first annual reports due June 30, 2010. The report (in Form 2) covers the 12-month period ending March 31, 2010; and contains general information on the firm plus some very interesting numbers which may be available to the public for the first time (we believe) in a consolidated summarized format in one place.

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PCAOB Finds 5 Deficiencies in 12 Ernst and Young Canada Audits

June 8, 2010

A recent inspection report by the Public Company Accounting Oversight Board (PCAOB) on May 27, 2010 is the second of its released reports this year on the Big Four firms, following the report on Deloitte USA on May 4, 2010.

Keeping up its precedence set in the Deloitte report, the PCAOB released additional statistics, not typically seen earlier.

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PCAOB Inspection of Deloitte Audit – 20% Error Rate??

In its first inspection report of a Big Four firm in the year 2010, the PCAOB just released its 2009 inspection report of Deloitte & Touche LLP, finding quite a high percentage of errors in the sample of audits selected to be reviewed....

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SEC’s Strategic Plan Seen to Support IFRS Transition and PCAOB

The Securities and Exchange Commission just released its 2010-2015 Strategic Plan with some broad objectives to focus on securities compliance fostering and enforcement. The US SEC has been under considerable attack since it missed one of the world’s largest $60 billion Ponzi schemes operated by Bernard Madoff. Apparently, there were five particular instances over the years where the SEC could have caught Madoff had they pursued either their own processes or followed through on tips provided to them. Refocusing on enforcement is clearly goal number one...

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PCAOB CFO - Ernst and Young Alum - Resigns

The Public Company Accounting Oversight Board reported that its CFO Tom Hohman resigned to become a CFO of a private company in Maryland. He had joined PCAOB in July 2003, and was its first CFO and one of the founding officers. He began his career as an auditor with Ernst & Young LLP and is a Certified Public Accountant...

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PCAOB Raps Ernst and Young, KPMG With Audit Issues

On January 11, 2007, the Public Company Accounting Oversight Board released its reports on the audit inspections in 2004 for Ernst & Young LLP and KPMG LLP. Both firms got rapped for inconsistencies in audits in failing to fully comply with all the specifics of GAAP or not gathering enough support information to support their findings.

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Fannie Mae Sues KPMG for $2 Billion! Alleges Abysmal Auditing

Fannie Mae (NYSE: FNM) is suing KMPG LLP for $2 billion today, indicating that it was negligent in playing its role as an independent “watchdog” and preventing billions of dollars of accounting errors. The firm is being sued for 17 counts of negligence and breach of contract in a suit filed in DC, Fannie apparently had $2 billion in damages and $1 billion in costs to restate earnings. Fannie had fired KPMG in December 2004.


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PCAOB 2006 Report on Deloitte - Issues and Disagreements Too

PCAOB recently released its 2006 report on Deloitte and Touche LLP based on its inspection in 2005 and complying with Sarbox Act. The Board identified 17 unnamed public companies (Issuer A to Issuer Q) where it identified a variety of audit deficiencies, ranging from revenue recognition, inventory control, debt covenants, cash flow statement preparation, allowance for loan losses etc...

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SEC and PCAOB meet on Sarbox: The Plot Thickens

The Washington Post is reporting that SEC Chairman Christopher Cox and Mark W. Olson, chairman of the Public Company Accounting Oversight Board, met today to discuss their ideas on Sarbanes-Oxley in preparation for the PCAOB public hearings set for December 13th, 2006...


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PCAOB Behind the Curve on Big Four Audits

Big Four News on Wall Street Journal Front Page

Today’s WSJ carries two substantive articles on Sarbanes Oxley and PCAOB / Big Four Firms. It is the very first item on the What’s News front page column, indicating the extraordinary importance of these topics to investors and the business community at large. We are pleased to see that the issues we write about in our blog are critical, timely and central to business and capital markets...

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PCAOB Can Pull Audit Firms Out Of Potentially Sticky Spots

The Public Company Accounting Oversight Board is proposing rules,which in a roundabout way, help the Big Four audit firms handle some potentially sticky situations. Under the Section 102(d) of 2002 Sarbanes-Oxley Act, a registered public accounting firm may be required to report more frequently on company events to the Board.....

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