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September 24, 2023

Accounting News Roundup: Altering Audit Workpapers and Hating Open Work Spaces | 12.09.16

Auditors behaving badly

Here's a speech that Claudius Modesti, the PCAOB's Director of Enforcement, gave at the AICPA Conference on SEC and PCAOB Developments this week. He talks about the recent actions against Deloitte Brazil, noting that the improper altering of workpapers is never okay: 

While we can always debate whether an auditor exercises appropriate professional judgment, I do not think anyone in this room would disagree with that notion that investors do not expect their auditors to improperly alter work papers. Improper document alteration is a black and white issue. And investors certainly do not expect their senior leaders of audit firms to engage in a cover up or effort to obstruct their regulator. There is nothing grey when it comes to this form of misconduct.

It's easy for me to sit here and say, "Improperly altering workpapers is stupid," because it is! I can't think of a circumstance where the prudent move for an audit partner is to alter a workpaper or tell another person to alter a workpaper after they've been notified of an inspection or an inquiry. And yet, that's exactly what those guys in Brazil did! Brazenly, I might add! I would love to hear the reasons auditors give to inspectors when they've been busted for altering workpapers. I can't help but think that some of them say, "I exercised professional judgment," and after getting a stern look from the inspector, they finish, "Poor professional judgment."

Elsewhere: The Economist has a take on the Deloitte Brazil situation, so you'll want people to see you reading that. Or at least pretending to.



CPA business executives who were optimistic about the U.S. economy and specifically cited the election outcome in their comments said they were encouraged about the possibility of reduced regulation, lower income taxes and the repeal of the Affordable Care Act.

“We’re seeing renewed confidence in the U.S. economy, building on the encouraging signals on the outlook for revenue, profit and business expansion we saw in the third quarter,” said Arleen R. Thomas, AICPA managing director Americas and global offerings, in a statement. “The removal of the uncertainty that the presidential election cycle represented appears to be a driving factor in this significant increase in optimism.”

I have a hard time believing that the election of Donald Trump is equivalent to a removal of uncertainty but there you have it.

Office space

People have had it with the open work space:

This coming spring, [Infinite Peripherals] will move into new Irvine offices, which will come equipped with the usual tech-company perks: free lunches, a gym, and a game room with the requisite foosball and ping-pong tables. But the element that most excites [CEO Jeffrey Scott] is this: There will be doors.

IP isn’t the only company rebelling against the open-plan office model, which first reared its head in the 1950s and has since spawned the suffocating cubicle, the teetering partition, and the sense of undue familiarity with Ed from accounting. More and more businesses are doing away with the open approach, for a simple reason: People don’t like it.

Hey! I kind of like it when Ed from accounting stops by because it's precisely when I need a break. (Full disclosure: I work remotely and alone and have to make up co-worker friends.)

But, yeah, I get it, open work spaces are kind of over. Funny thing, a company that helped popularize cube farms came up with a new thing called the Brody, "a mobile self-contained workspace with a wraparound privacy screen," which sounds a lot like a cubicle with a sliding door that you can pack up and take home. I'm sure it's on everyone's gift list this year.  

Previously, on Going Concern…

I wrote about KPMG's planned mega training center that will probably put Deloitte University to shame.

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