Fri Nov 18, 2011 12:26pm EST
(Reuters) - Two senators launched a bipartisan effort on Friday to
allow audit watchdogs to publicize disciplinary proceedings against
the auditors of public companies.
Senators Jack Reed, a Democrat, and Charles Grassley, a Republican,
jointly introduced a new bill that will allow the Public Company
Accounting Oversight Board to make its disciplinary proceedings
public.
"The PCAOB is responsible for ensuring that auditors of public
companies meet the highest standards of quality, independence, and
ethics," said Reed, the chairman of the Senate Banking securities
subcommittee.
"Currently, Congress, investors, and others are being denied critical
information about an auditor's disciplinary process. Investors and
companies alike should be aware when the auditors and accountants they
rely on have been charged or sanctioned for violating professional
auditing standards."
The PCAOB, which is overseen by the U.S. Securities and Exchange
Commission, was created by the Sarbanes Oxley Act of 2002 following a
series of major accounting scandals at companies like Enron and
WorldCom.
The PCAOB sets auditing standards and also has authority to inspect
and discipline auditors for violating auditing rules.
But the law prevents the PCAOB from disclosing any details of the
disciplinary process, a problem that both senators said has allowed
firms to drag out proceedings for years.
"Sunshine is the best disinfectant," Grassley said in a statement.
"This legislation levels the playing field between auditors reviewed
by the SEC and auditors reviewed by the PCAOB. Currently, PCAOB
proceedings are secret while SEC proceedings are not."
For at least a year now, the PCAOB has been lobbying Congress to amend
the secrecy provisions of the law.
(Reporting by Sarah N. Lynch in Washington, D.C.; Additional reporting
by Dena Aubin in New York; Editing by Tim Dobbyn)
Regulatory News
--
CA Ramachandran Mahadevan,M.Com.,F.C.A.,
(Reuters) - Two senators launched a bipartisan effort on Friday to
allow audit watchdogs to publicize disciplinary proceedings against
the auditors of public companies.
Senators Jack Reed, a Democrat, and Charles Grassley, a Republican,
jointly introduced a new bill that will allow the Public Company
Accounting Oversight Board to make its disciplinary proceedings
public.
"The PCAOB is responsible for ensuring that auditors of public
companies meet the highest standards of quality, independence, and
ethics," said Reed, the chairman of the Senate Banking securities
subcommittee.
"Currently, Congress, investors, and others are being denied critical
information about an auditor's disciplinary process. Investors and
companies alike should be aware when the auditors and accountants they
rely on have been charged or sanctioned for violating professional
auditing standards."
The PCAOB, which is overseen by the U.S. Securities and Exchange
Commission, was created by the Sarbanes Oxley Act of 2002 following a
series of major accounting scandals at companies like Enron and
WorldCom.
The PCAOB sets auditing standards and also has authority to inspect
and discipline auditors for violating auditing rules.
But the law prevents the PCAOB from disclosing any details of the
disciplinary process, a problem that both senators said has allowed
firms to drag out proceedings for years.
"Sunshine is the best disinfectant," Grassley said in a statement.
"This legislation levels the playing field between auditors reviewed
by the SEC and auditors reviewed by the PCAOB. Currently, PCAOB
proceedings are secret while SEC proceedings are not."
For at least a year now, the PCAOB has been lobbying Congress to amend
the secrecy provisions of the law.
(Reporting by Sarah N. Lynch in Washington, D.C.; Additional reporting
by Dena Aubin in New York; Editing by Tim Dobbyn)
Regulatory News
--
CA Ramachandran Mahadevan,M.Com.,F.C.A.,
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