The PCAOB's Director of Enforcement and Investigations, Claudius Modesti, is on to your little game. You know, the one where you get all shifty with your audit workpapers once the word spreads around your office that inspectors will giving your ticks and ties the stinkeye. Oh? Not familiar with anything of the kind, you say? This is something that only happens at large firms with a few bad apples?
“We’re facing a non-cooperation situation across audit firms of various sizes,” he said during a Practicing Law Institute event Wednesday. When the PCAOB’s inspectors tell a firm they are coming to look over its work, “people will start monkeying around with documents,” Modesti says. Most of these incidents are hidden from public view, however, since details about the PCAOB’s routine inspections are scarce. And until a settlement is reached, the regulator can’t disclose anything about ongoing investigations that could lead to enforcement actions.
Don't insult the man. If anyone wants to fess up right here and now, we'll consider the slate clean.