Sarah Johnson, CFO.com | US
April 21, 2009

Management to Deloitte: Donýt Second-Guess Us

Deloitte (nor any other accounting firm) actually second guess their clients. No wonder they are offended! The PCOAB and the SEC have done absolutely nothing to protect the investing public. Meanwile, shareholders continue to foot the bill for crappy audits.

Posted by Eulogy Lachrymose | Apr 22, 2009 5:49 PM ET

PCAPB vs. D&T

Go for it D&T! These Monday morning quarterbacks at the PCAOB need a dressing down. I thought for a while that the partners in the national firms have their collective heads a bit too high in the ozone, but no more. They know others are watching and just looking for another "gotcha". How many of these PCAOB reviewers are washouts from these firms just looking for a chance to get even? Any one who has ever done any auditing knows there is ALWAYS more you can do, but at some point you have to reach a conclusion. The audit process is not a blank check. D&T bets its insurance policy every time it signs off. When the PCAOB employees have the same level of risk, I'll respect their collective comments.

Posted by Thomas Tone | Apr 22, 2009 5:47 PM ET

Deloitte Needs to Deal with Reality

Analyses of the big-4 accounting firms, and that includes Deloitte, of course, have confirmed beyond any doubt that many of their audits are deficient. There are several reasons for this, but the most powerful, of course, is that the system encourages firms like Deloitte to look the other way, rather than confront management with their improper accounting. The auditors most important goal: "Don't rock the boat," and "Keep that cash flow from the client coming in." So, if that means looking the other way, turning a blind eye, or even collaborating with management by directly rubber-stamping the improper accounting, that's what they are going to do. The PCAOB doesn't really impose much penalties on the audit firms, so the risks are low. The only thing the auditors have to worry about is getting sued by investors. Besides, the PCAOB (like FASB and the SEC) are amateurs when it comes to fraud, and don't even know what a proper implementation of SAS 99 should involve. If they did, most audits wouldn't pass muster. Deloitte should just keep quiet and hope that nobody notices the PCAOB's little report.

Posted by Ralph Adamo | Apr 21, 2009 5:17 PM ET