As you know, I sat through the SEC Open Meeting webcast yesterday just to catch the copious number of thank yous, Doty giving the prepared remarks I already had, and the conclusion we all knew the SEC would come to, which was approving the 2014 PCAOB budget. BOR-ING.
Well out of that meeting, everyone seemed to be talking about the announcement that auditor rotation wasn't really in the PCAOB's plan for the year ahead. As Doty told the Commissioners, the Board hadn't even budgeted for that so don't expect them to get on that any time soon. Or ever, really.
Here are just a few articles on the matter (some of which you folks have sent via the tip box, for which I should thank you because it's REALLY helpful for you to send us articles about stuff we already wrote about):
PCAOB’s Auditor Rotation Project is Essentially Dead [CFO Journal]
The Morning Ledger: PCAOB Drops Auditor-Rotation Push [also CFO Journal]
PCAOB Abandons Auditor Rotation [CFO.com]
Sensing a theme here?
Here's the problem: we already knew that. The PCAOB's Jay Hanson has been telling us for, like, EVER that it isn't going to happen. He hinted at it in December of 2012, straight up said it in March of 2013 and he said it again last December at the AICPA conference on SEC and PCAOB developments (and you can trust this tweet because I WAS TOTES THERE WHEN HE SAID IT):
PCAOB's Jay Hanson: "mandatory audit firm rotation is not on the table right now." Audit firms everywhere exhale. #aicpaSEC
— Adrienne Gonzalez (@adrigonzo) December 9, 2013
Ignore this. It wasn't going to happen. Say it with me: it wasn't going to happen. In other words:
What was the spread on PCAOB mandating auditor rotation? ‘Never’ was a good bet using any odds #CorpGov
— Broc Romanek (@brocromanek) February 6, 2014
Instead of obsessing over the shock of finding out something most of us knew wasn't going to happen isn't going to happen, perhaps we should actually focus on the fact that Doty basically assured us that an inspection deal with China WILL happen this year. That, people, is the important bit. Maybe not to the buddy-buddy firms and their long-term clients who were bugging out about the threat of forced auditor rotation (LOL) but this isn't about them.
In other words, why do we care about the PCAOB not doing something when, more importantly, the Board has basically promised to do something that has been a major pain in its ass for quite some time?
If you've ever been hustled by some street performer daring you to play a sleight of hand game, you know what I'm talking about. Make sure you keep your eye on the right ball.