Peeling away financial reporting issues one layer at a time

Tag archive for Auditing

A Perspective on “Professional Skepticism” — Part 2 of 2

(Part 1 is here.)

I have found that a useful way to home in on the drivers of audit quality is to regard an audit as two distinct engagements: (1) verifying facts, [Read More...]

How Accounting Standards Went Insane: It Didn’t Start with IFRS Convergence

If you subscribe to The Atlantic magazine, the title of this post may ring a bell — a riff on  “How American Politics Went Insane: It Didn’t Start with Donald Trump…”  from the July/August edition.  Now that [Read More...]

On the Use of “Fair” in the Auditor’s Report: A Conversation with David Damant

My previous post addressed three aspects of the auditor’s report:

The PCAOB* proposal to require a discussion of “critical audit matters”; Whether use of non-authoritative GAAP should be given special mention by the auditors; and The [Read More...]

The PCAOB on the Auditor’s Reporting Model: Great Progress and More To Do

Why is it that shareholders of the largest public companies could pay around $80 million for their boilerplate audit reports, if the shareholders of smaller public companies pay only $80 thousand for exactly the same [Read More...]

Look Beyond the Firms for the Root Causes of Audit Deficiencies*

The International forum of Independent Audit Regulators (IFIAR) has published its second annual survey of audit inspections of the Big Four plus BDO and Grant Thornton firms around the world:

“The leading areas of [Read More...]

One Shouldn’t Have to be an Auditor to Understand an Audit Report

The PCAOB* has proposed a new standard to make the auditor’s report more informative.  If finalized in its present form, it would provide more and/or better information concerning the following:

Critical audit matters (as determined [Read More...]

Do Survey Results Mean that External Audits Don’t Protect Against Earnings Manipulation? (What a Surprise!)

The results of a recent E&Y survey investigating financial manipulation must stun even the most cynical observers of accounting practice,:

Of the board members and senior management surveyed from companies in Europe, Middle East, India [Read More...]

Why Nothing Sticks to Auditors when Loans Go Bad

I read numerous news sources this week echoing the SEC's announcement that it finally has a case it thinks it can win against auditors stemming from the 2008 financial crisis. One journalist, [Read More...]

Can Auditors Help Save Spain’s Banks? Nuts!

Less than a day after posting my critique of the FASB and IASB loan loss allowance proposal, I happily learned that the FASB may be backtracking. According to a PwC In Brief:

[Read More...]

Where is the Center for Audit Quality When We Actually Could Use It?

Below is an email I received from Lynn Turner. My several comments are in brackets, and the italics/bolding are all supplied by yours truly (I also took the liberty of fixing a couple of [Read More...]