[April 1, 2012, special edition] Speaking exclusively with The Summa, PCAOB (Public Company Accounting Oversight Board) Chair James Duty says that significant changes to the auditor rotation proposal are needed to gain Congress’s approval.
“Everyone fears herds of nomadic accountants under the present auditor rotation proposal. There could be dangerous trailer parks of nomadic accountants in their RVs and gers. And quite honestly, it’s a very scary thought, right out there with Zombie accountants. Trailer park trash takes on a whole new meaning when reading a typical large firm audit opinion.”
“What we have in mind is something a bit more festive,” he went on to say. “We intend that the conclusion of a three or four year audit engagement be celebrated with music and dancing. That’s right, we are now proposing audit firm musical chairs.”
For those not familiar with the game of musical chairs, the following clip from Happy New Year, Charlie Brown, is a good primer.
“At the PCAOB we prefer the musical chairs version championed by Ellen. We propose that whenever a company’s audit comes up for a new auditor, firm representatives travel to Washington for a spirited competition of blindfolded musical chairs. It’s the only fair way.”
ProfAlbrecht wonders if blindfolds are needed, given that audit firms can rarely see the deficiencies in corporate financial statements.
ProfAlbrecht hopes it works. Next up on the PCAOB’s docket, Communications with Zombie Auditors.
Other April 1 stories appearing in The Summa”
Debit and credit – – David Albrecht