SEC Chairman Questions Auditor’s Role
In a recent speech to the AICPA Annual Conference, SEC Chairman Mary Schapiro questioned the responsibility of financial statement preparers and auditors in recent enforcement actions involving financial frauds. In her speech, Ms. Schapiro asks “if questions could have been asked early on by preparers and auditors, or if warning flags were simply ignored.” She continued: “We wonder if the eventual losses to shareholders and investors were multiplied many times because material information was not made available in a timely fashion by people who should have been able to produce accurate disclosures.” She asks auditors to consider a series of investor-protection questions before completing an audit. She also indicated that the SEC was contemplating ways to “further leverage the profession.”
OUR TAKE: Ms. Schapiro implies that the SEC may consider taking action against auditors in financial fraud cases even where the auditor followed applicable industry rules and guidelines. She also suggests holding auditors liable for losses resulting to shareholders. The ultimate issue is whether professional services firms such as auditors and lawyers are service providers or watchdogs.
http://www.sec.gov/news/speech/2010/spch120610mls.htm
OUR TAKE: Ms. Schapiro implies that the SEC may consider taking action against auditors in financial fraud cases even where the auditor followed applicable industry rules and guidelines. She also suggests holding auditors liable for losses resulting to shareholders. The ultimate issue is whether professional services firms such as auditors and lawyers are service providers or watchdogs.
http://www.sec.gov/news/speech/2010/spch120610mls.htm
Posted by Todd Cipperman at 12/8/2010 7:30 AM 
Categories: Compliance and Operations
Tags: auditor liability fraud
Categories: Compliance and Operations
Tags: auditor liability fraud
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