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Audit firms sure to face new litigation, experts say compliance week


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Audit firms sure to face new litigation, experts say compliance week

  1. 1. Audit Firms Sure to Face New Litigation, Experts Say - Compliance Week Help | Contact Us | About Us | Advertise | Reprints | Editorial Calendar | Reports | Newsletters | Subscribe | Testimonials Not a member? Subscribe Today | Forgot password? Email Address Password Login Remember me Search Home Topics Databases Columnists Blogs Webcasts Events Resource Exchange CPE Compliance Jobs Thought Leadership Directory Subscribe Compliance Week > Blogs > Accounting & Auditing > Audit Firms Sure to Face New Litigation, Experts Say Audit Firms Sure to Face New Litigation, Experts Say Tammy Whitehouse July 22, 2009 PRINT EMAIL REPRINT TEXT: A | A | A 0 Me gusta A udit firms have so far managed to fend off any firm-busting liability claims, but research firm Audit Analytics is raising MORE ACCOUNTING & AUDITING questions about whether that may change in the near future. SEC Staff Offers New Advice on XBRL Filings Mark Cheffers, CEO of Audit Analytics, says audit firms likely will face PCAOB Maps Out Ideas for some massive liability claims as the plaintiffs’ lawyers determine where Overhauling Auditors Report to target blame for the economic tumble of the past several months. He FASB, IASB Part Ways on presented data raising the question at a recent litigation conference Netting Derivatives Most Popular Most Emailed Most Recent hosted by the American Law Institute and the American Bar Association. XBRL Users Get New Functionality in Taxonomy The Elusive Art of the Risk Assessment Cheffers said Audit Analytics tallied up cases already making their way FASB, IASB Part Ways on Netting FASB Finalizes New OCI into the litigation pipelines, and determined eight major audit firms have Derivatives Presentation Rule been named in nearly a dozen securities class action suits related to the PCAOB Maps Out Ideas for Overhauling Auditors Report Bernie Madoff scandal alone. Six audit firms have been named in cases RELATED TOPICS SEC Staff Offers New Advice on XBRL Filings related to the credit crisis, and those cases likely are just the beginning, KPMG Warns On Pension Rule Changes Cheffers said. Auditor Liability New Yorker Magazine Delivers Must-Read Article on Rajaratnam Prosecution Audit Analytics sorted out the top 50 accounting malpractice settlements Its Back! PCAOB Chairman Floats Auditor since 1999 and said Ernst & Young has paid the largest amount in Rotation Idea settlements related to those cases at $1.92 billion. KPMG follows with settlements totaling $1.42 billion, followed SEC at the Inflection Point -- Commissioner by PricewaterhouseCoopers at $1.27 billion and Deloitte & Touche at $1.25 billion, the firm said. Aguilar Looks at the Challenges Ahead Life Under New Whistleblower Rules “The exposures from existing claims or potential claims is still a breathtaking number,” said Cheffers, but it’s British Government Criticized for Lack of difficult to speculate what may ultimately reach litigation. “The plaintiff’s bar generally understands there’s really Audit Reform only so much you can get from one of these firms before they will fight you to the end of time.” Audit firms have called for protections from liability, but investor advocates have railed against such measures. Big 4 firms are largely unable to obtain insurance against audit-related liability claims because there are so few firms doing so much of the work related to public companies, and the risk of claims is too great. Big 4 firms worry that a major settlement could bankrupt a firm while investors say the threat of liability is an important stick in assuring rigorous audits. A U.S. Treasury panel studying the audit profession made a number of recommendations for how to assure the[25-06-2011 1:01:29]
  2. 2. Audit Firms Sure to Face New Litigation, Experts Say - Compliance Week viability of the audit profession, but failed to reach consensus on how to address the liability question. Siefert said the call from audit firms for protection from liability quieted considerably through the financial crisis as Washington became focused on bigger problems. Roger Siefert, a managing director for consulting firm LECG’s New York office and former general counsel for CPE Credits On Demand! Deloitte, said there’s been a lull in litigation through the financial crisis, but tension is building. “The plaintiff Subscribers can now earn FREE lawyers are looking for culpable parties and trying to determine if there are deep enough pockets to justify Continuing Professional Education (CPE) litigation,” he said. “It’s inevitable that accounting firms will be some of the parties still standing, and fingers will credits by watching Compliance Week Webcasts on critical topics related to corporate be pointing in their direction.” compliance and risk -- on demand, so at your convenience! For subscribers only. Earn CPE Like Be the first of your friends to like this. for free now Compliance Week Podcasts ... We talk with independent FCPA Like consultant Tom Fox about a court case challenging whether employees of state-owned companies qualify as foreign government Add New Comment Login officials under the Foreign Corrupt Practices Act. Hear the podcast now or... Please wait… Follow Compliance Week podcasts on iTunes. ... and Compliance Week on Twitter! Real-time updating is enabled. (Pause) You can also follow Compliance Week Editor Matt Kelly on Twitter, for the latest regulatory observations Showing 0 comments Sort byby popular Sort popular now now and updates. More than 3,200 followers and ranked the most influential Twitter feed on compliance! M Subscribe by email S RSS Compliance Week LinkedIn Group Compliance Week now has a companion group on LinkedIn, where members can network and discuss the compliance and governance news of the day. Open to all, free to join. Compliance Week TV View the Discussion, "Highlights of the State of Compliance Study", with PwC Global and US Risk and Compliance Leader, Miles Everson. Courtesy of PwC Compliance Week Jobs The Compliance Week job board is offering more than 100 job listings of qualified compliance executives and other professionals. Job searches are free to subscribers, and rates for postings start at $395. Virtual Annual Conference Hear sessions from our recent live[25-06-2011 1:01:29]