Who Do You Trust…Or Mistrust? According to a Gallup poll during December 2-18, 2024, three in four Americans consider nurses highly honest and ethical, making them the most trusted of 23 professions rated in Gallup’s annual measurement. Grade-school teachers rank second, with 61% viewing them highly, while military officers, pharmacists and medical doctors also earn high trust […]
Honesty and Ethics of Professions Read More »
Is it a Personnel Issue? Recently, a reporter from the Wall Street Journal, Mark Maurer, asked to interview me about the question: “Are companies picking a new finance chief after detecting a material weakness in their financial reporting controls, at least in part due to a shortage of skilled accounting staff?” The idea is that the two
Undetected Material Weaknesses in Financial Reporting Controls: Who is to Blame? Read More »
Objectivity and Impartiality Replace the Strict Application of Independence Rules In June 2021, the Securities and Exchange Commission (SEC) made amendments effective for certain rules regarding auditor independence requirements (known as Rule 2-01 of Regulation S-X). The intention behind these amendments is to modernize the SEC’s rules governing auditor independence and more effectively focus the
Do “Modernized” Independence Rule Changes Protect Investor Interests? Read More »
Looking for the Red Flags of Fraudulent Financial Reporting I recently read an article that describes the results of a study that contends that some company bosses are being placed in a position of power when the company needs “aggressive earnings reports”. In such cases, recruiters are more likely to suggest job candidates with “dark
Do Dark Triad Personalities Explain Aggressive Accounting? Read More »
Personality Traits Might Give Us a Clue I recently read an article that describes the results of a study that contends that some company bosses are being placed in a position of power when the company needs “aggressive earnings reports”. In such cases, recruiters are more likely to suggest job candidates with “dark personality traits”
Looking for the Red Flags of Fraudulent Financial Reporting Read More »
What is the Public Interest? It’s been about 18 years since Congress created the Public Company Accounting Oversight Board in response to widespread fraud in the financial statements of the likes of Enron and WorldCom. Given the high rate of audit deficiencies identified in PCAOB inspections of public company audits, the time is right to
Is it Time to Reconfigure the PCAOB? Read More »
A Critical Analysis of the Business Roundtable Statement on the Purpose of a Corporation On August 19, 2019, the Business Roundtable issued a Statement of the Purpose of a Corporation that really is a mission statement, not a plan of action. As such, it is short on details about how corporations can achieve their purpose
Social Responsibilities of Corporations and the Public Good Read More »
The Case of GE and KPMG A new rule adopted by the U.S. Securities and Exchange Commission requires disclosure of the tenure of a public company’s external auditor in the annual report. KPMG recently reported that it has audited GE since 1909. This raises the question of whether there should be mandatory audit firm rotation
Should Auditors Rotate Every 109 Years? Read More »
KPMG-PCAOB Scandal Raises Questions About Oversight of the Accounting Profession In an unprecedented event, on January 22, 2018, it was announced that a former Public Company Accounting Oversight Board (PCAOB) staffer, Brian Sweet, who was hired by KPMG in 2015, leaked confidential information about PCAOB’s plans to audit the company. Most of the leaked information
KPMG Compromises Integrity by “Stealing” PCAOB Inspection Information Read More »