Accounting and auditing ethics Feed

Should Chinese Companies Listed on U.S Stock Exchanges Be Subject to PCAOB Audits?

Making Workpapers Available to the PCAOB Might Violate China’s Sovereignty On January 23, 2014, the SEC came down hard on Chinese units of big-4 firms, ruling that these units should be barred from auditing U.S.-traded companies for six months. The ruling came after the firms failed to show the SEC... Read more →


SEC Investigation of Auditors Driven by Conflicts of Interest and a Lack of Independence

Is the SEC the Cause of the Problem? I have blogged before about the problems the Big Four accounting firms are having with respect to conflicts of interests and independence impairments. These concerns have moved the SEC to launch a probe into how firms manage conflicts of interest caused by... Read more →


Do Auditors Adequately Assess Audit Quality?

Measurement of Audit Quality is the Key This blog is a continuation of one I posted earlier today and follows up on a blog posted a couple of weeks ago. The question of whether audits provide useful information and protect investors has been discussed for many years. It is an... Read more →


2020 PCAOB Inspections of US Affiliate of Global Networks

2020 Inspection Cycle Report Synopses Last week I blogged about the Public Company Accounting Oversight Board (PCAOB) and whether it has been living up to its mandate to protect the public interest. I also addressed PCAOB inspection reports and the deficiencies identified by the board. These are discussed next. Deficiencies... Read more →


Is the PCAOB Obsolete?

Defective Audits Are Not Being Adequately Dealt With The SEC removed William Duhnke as chairman of the Public Company Accounting Oversight Board (PCAOB), the U.S. audit watchdog, on June 4, 2021. This raises serious questions about the relevance of the PCAOB today and whether it has been operating as intended.... Read more →


Financial Disclosures and Covid-19

Protecting the Public Interest It’s the time of year when companies provide earnings guidance to investors and financial analysts about their future prospects for 2021. Uncertainties abound because we are in unchartered territory with respect to the impact of Covid-19 on the financial position, operating results, and future cash flows... Read more →


SEC Narrows Eligibility for Dodd-Frank Whistleblower Awards

Will Whistleblowers Still Come Forward? A new SEC rule interpretation threatens to weaken the incentive for external whistleblowers to come forward with details about potential corporate fraud. The clarification states that a whistleblower’s tip has to offer insight “beyond what would be reasonably apparent” to the agency from publicly available... Read more →


What Happened to KPMG?

Accounting Ethics at KPMG is an Oxymoron It was just announced that that the California Board of Accountancy has fined KPMG $1.3 million for violations of the Accountancy Act. The Board’s action arose from KPMG admitting to being disciplined by the Securities and Exchange Commission over its actions to obtain... Read more →


Controlling For Fraud in Organizations

ACFE 2020 Report to the Nations on Occupational Fraud and Abuse The 2020 Report to the Nations on Occupational Fraud and Abuse developed by the Association of Certified Fraud Examiners examined 2,504 cases of fraud in 125 countries causing $3.6 billion losses. The results are an eye-opener with respect to... Read more →


Accounting, Tax, and Regulatory Issues in the Cannabis Business

Keys to Operating a Successful Cannabis Business State legislation that permits the sale and distribution of marijuana is on the rise. Thirty-three states allow it for recreational and/or medical purposes including the District of Columbia. Cannabis sales were estimated to be $15 billion in 2018 and projected to be about... Read more →