As mentioned in today’s Monday Morning Accounting News Brief and first spotted on Canadian Accountant, a shout-out is in order for this person who bailed on EY Canada to go work for the client and scored themselves a mention in the firm’s 2022 PCAOB inspection report:
The firm reported one instance of potential non-compliance with PCAOB Rule 3500T regarding firm personnel negotiating prospective employment with an audit client. This instance involved a member of an engagement team engaging in substantive employment discussions with, and accepting an offer of employment from, the audit client for an accounting role.
2022 PCAOB Inspection of Ernst & Young LLP (Headquartered in Toronto, Canada), Part I.C Independence [PDF]
The section on auditor independence is new to PCAOB inspection reports as of last year and has a lot of potential for LOLs. Everyone better review the rules now because we all know the auditors of auditors are looking for any petty thing they can ding firms for these days.
Why do we let corporations pick their auditors? Why do we have only four big firms instead of a dozen, a score or more? Why doesn’t government do the audits, as the IRS does tax audits? Why is law enforcement handcuffed by inadequate budgets and rules that hinder investigations? Why are auditors allowed to quietly resign instead of being required to blow the whistle? Auditing needs a shakeup, fundamental restructuring and the accounting firms need a serious debate about their failings, practical and moral. [