Another day, another "year in review best of" list. Except this list is actually the "worst of" 2014.
It's been an exciting year for auditing. PCAOB inspection rates were some of the worst to date, and then there was that whole thing where an audit partner was banging the Chief Accounting Officer at the client's. No biggie, just another day in auditing!
Let's take a look at our Worst Of for 2014.
Those Who Know, Know BDO Got Their AS5 Kicked in Latest PCAOB Inspection Report
As we just stated, it's been a pretty bad year for audit firms inspected by the PCAOB. But as far as PCAOB inspection reports are concerned, BDO has the distinction of coming in as the absolute worst with an audit failure rate of 65%. Did the world end due to this failure rate? Well, no. But it sure was a sucky moment for the folks at BDO.
Ventas Fires EY as Auditor Over Independence Violation
A funny thing happened with an audit client this year. Apparently, an EY partner was screwing the Chief Accounting Officer and when it comes to independence, that's like the last thing the audit partner wants to do. We'll have you know we do have the name of the audit partner in question but in respect for her privacy since her own grunts weren't lined up waiting to throw her under the bus and ruin her life more than it was already ruined by banging the CAO at the client, we made the decision not to out her. We do hear she's a wine aficionado, though, and would like to send a virtual glass of vino to her for following her heart instead of her profession's code of conduct. At the end of the day, Ventas found a new auditor, the CAO "separated himself" from his duties, the audit partner left the firm, and the world kept spinning.
The Name of EY's New Audit Tool Implies Audits Belong in the Louvre
While we're on the topic of EY audits, let's talk about EY's rebranding of the oddly named GAMx. When it comes to audits, the last thing you want to think about is creativity but that's exactly what EY did when they announced EY Canvas in August of this year. EY let the grunts name this one, and EY Canvas was what they came up with. Why? We'll let EY tell you. "We like to think of an audit engagement as a painting that our people at EY create on a blank canvas. EY Canvas is a surface where our teams can paint a picture, encompassing the entire audit process. It is adaptable to whatever size is needed on the client needs, and in the end, it is an accounting work of art, available for inspection."
McGladrey Reminds Audit Staff to Stay Billable This Busy Season
Not all firms end up in the pages of Going Concern with their pleas to stay billable, but this year McGladrey did. The mantra is bill, bill, and then bill some more. And make sure you get those timesheets in or else the world just may stop spinning. You'll be eating a lot of crap this holiday season but hours better not be among it. At least according to the email that went out.
KPMG Vice Chair Thinks the Future of Audit Includes 100 Percent Testing
We have just one thing to say about this: 100 percent testing. How the hell does that work? Does that mean assurance is no longer reasonable but absolute since the audit firm has tested every single little transaction and run it through the magical computer? Who knows. We're betting on flying cars before we see this in wide use.