We found an interesting bit in a DealBook piece about Mary Jo White's impotent SEC we felt would be important to share with you:
On yet another front, the S.E.C. is embroiled in a quiet battle with the Public Company Accounting Oversight Board, the accounting industry regulator created after the Enron-era scandals. The accounting board has hardly been a regulatory terror, but it’s been getting pushback from the S.E.C. for even modest initiatives.
For years, the board has pushed for the lead audit partner to have to sign company audits. Wow. Big Step. Put your name to your work. Sadly and predictably, the industry has fought it in what can only be interpreted as cowardly refuge in anonymity. And the S.E.C. leans toward the industry.
“The profession feels that I am a proactive regulator,” James R. Doty, the chairman of the accounting oversight board, told me.
Of the S.E.C. and the topic of agency rivalry, Mr. Doty said, “Robust and vigorous debates are important in this area.” He praised Ms. White as constructive and a pleasure to work with. But his organization lost the fight. Audit partners will not be required to sign the statements, but can if they want to. I can imagine how many auditors will voluntarily put their heads on the block.
Huh? When did that happen? Just 9 months ago, the PCAOB recommitted to partner naming, leaving the comment period open through March of this year for concerned parties to spout off on this matter.
Nowhere in the reproprosed rule does it say anything about voluntary participation:
The amendments would require (1) disclosure in the auditor's report of the name of the engagement partner and (2) disclosure in the auditor's report of the names, locations, and extent of participation of other independent public accounting firms that took part in the audit and the locations and extent of participation of other persons not employed by the auditor that took part in the audit.
As far as we are aware, the PCAOB still has a dog in this fight. As recently as last month, the PCAOB was planning a vote on the matter. In fact, it's right here on the most current standard-setting agenda:
See it right there? I see it right there and I only have one good eye.
So yeah, don't count the PCAOB as defeated just yet. Clearly some interested parties (and by "interested parties" we mean "people to be named," not investors or other users of audited financial statements) are not going to go down without a fight but the PCAOB has been cultivating this caper for almost as long as they've been around. It'll take a lot more than friendly fire from the SEC to stop them.
