tag:blogger.com,1999:blog-3239599.post112869142051645345..comments2024-03-08T05:28:34.766-05:00Comments on Through the Looking Glass: Unknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3239599.post-1128973261546823332005-10-10T15:41:00.000-04:002005-10-10T15:41:00.000-04:00Alkali --- passing judgment on the truth or falsit...<I>Alkali --- passing judgment on the truth or falsity of management's statements is an auditor's job. It's what they're paid to do.</I><BR/><BR/>Agreed, but auditors are paid by the company to give an opinion (1) to the company (2) as of a specific date. If the underwriter wants its own opinion, it can hire its own auditor.<BR/><BR/>This seems like splitting hairs, but there are literally four major independent auditing firms left, and auditing isn't all that high-margin a business. If there aren't some limitations on auditors' liability, the field is rapidly going to become empty.alkalihttps://www.blogger.com/profile/12706262051389241558noreply@blogger.comtag:blogger.com,1999:blog-3239599.post-1128714068657939802005-10-07T15:41:00.000-04:002005-10-07T15:41:00.000-04:00Alkali --- passing judgment on the truth or falsit...Alkali --- passing judgment on the truth or falsity of management's statements is an auditor's job. It's what they're paid to do. They do incur certain risks in doing that job --- just as, say, a plumber incurs the risk of a tort action if they wind up taking out a block's electrical service. That's not an excuse for failing to do the job.<BR/><BR/>In short, if the auditors aren't there to call bullshit on management, what's the point of having them around at all?charleshttps://www.blogger.com/profile/10359125688523895375noreply@blogger.comtag:blogger.com,1999:blog-3239599.post-1128704982389128332005-10-07T13:09:00.000-04:002005-10-07T13:09:00.000-04:00It ain't the hoi polloi that's buying the stocks -...It ain't the hoi polloi that's buying the stocks -- most people who are already have subscriptions, so I'm not sure that the pay wall has any effect on the circulation of the leak.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3239599.post-1128703554350420482005-10-07T12:45:00.000-04:002005-10-07T12:45:00.000-04:00I agree that this looks unpleasant, but in fairnes...I agree that this looks unpleasant, but in fairness I'd guess the AICPA has the following concerns in mind:<BR/><BR/>1) Before the auditor answers the underwriter's question, is someone required to review the audit workpapers and/or to interview the audit team? For just the current year, or how many years back?<BR/><BR/>2) If the auditor answers the underwriter's question "no," but in fact there was fraud of which the auditor was not aware, could the underwriter sue the auditor for negligence? How about people who buy stock or debt in an offering from the underwriter?<BR/><BR/>3) Assuming there is some risk of a lawsuit, shouldn't the auditor be compensated in some way for taking on the risk of answering the question?<BR/><BR/>Until those questions are resolved, I can understand why an auditing firm might want to keep its lips zipped.alkalihttps://www.blogger.com/profile/12706262051389241558noreply@blogger.com