We've been waiting since at least 2008, since the U.S. Treasury Advisory Committee on the Auditing Profession (ACAP) report’s recommendations. How dare anyone call this "midnight rule-making"?
The problems noted in public audits are similar to what I have seen during my 30 something career in federal accounting. I have seen the difference between when GAO does an audit and when a large private firm does it (I have no experience in dealing with small or regional one). GAO personnel don't turnover as much and become much more knowledgeable about the auditee. It is far harder for stuff to be ignored by a knowledgeable auditor. In fact, I have been in conversations with personnel audited by GAO who wish it was a private auditor. Talk about anecdotal evidence for quality auditing. Federal agencies still get audit findings from private auditors usually because they don't cover the basics.
One area I see the federal government leading is the requirement that auditors put an opinion on an agency's internal controls. Still only limited to DHS but I think it should be government wide.
What do you think of the idea I have that GAO could be the contracting agent for public company audits , putting together best of breed mixed teams from the private firms but taking them out of the direct relationship with issuer?
Never thought about it that way. Unsure how well it would work. BTW, GAO uses KPMG as their peer reviewer.
I think the metrics idea is a good one. It gives you an indication of audit quality. I also think that auditors should change every five to ten years. Helps to prevent too cozy relationships.
On the federal front, I think GAO should do all major federal agency financial statement audits. They have been trying to get out of that business but I think it is essential. Having personnel that don't turnover is one of the keys that I have seen to quality audit. The experienced personnel ask good questions and are able ferret out issues that management would prefer to keep hidden. Financial audits done by OIG are often contracted out to the private sector at lowest possible cost with its attendant problems.
The problems noted in public audits are similar to what I have seen during my 30 something career in federal accounting. I have seen the difference between when GAO does an audit and when a large private firm does it (I have no experience in dealing with small or regional one). GAO personnel don't turnover as much and become much more knowledgeable about the auditee. It is far harder for stuff to be ignored by a knowledgeable auditor. In fact, I have been in conversations with personnel audited by GAO who wish it was a private auditor. Talk about anecdotal evidence for quality auditing. Federal agencies still get audit findings from private auditors usually because they don't cover the basics.
One area I see the federal government leading is the requirement that auditors put an opinion on an agency's internal controls. Still only limited to DHS but I think it should be government wide.
What do you think of the idea I have that GAO could be the contracting agent for public company audits , putting together best of breed mixed teams from the private firms but taking them out of the direct relationship with issuer?
Never thought about it that way. Unsure how well it would work. BTW, GAO uses KPMG as their peer reviewer.
I think the metrics idea is a good one. It gives you an indication of audit quality. I also think that auditors should change every five to ten years. Helps to prevent too cozy relationships.
On the federal front, I think GAO should do all major federal agency financial statement audits. They have been trying to get out of that business but I think it is essential. Having personnel that don't turnover is one of the keys that I have seen to quality audit. The experienced personnel ask good questions and are able ferret out issues that management would prefer to keep hidden. Financial audits done by OIG are often contracted out to the private sector at lowest possible cost with its attendant problems.