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Wayne Spivak President & CFO

U.S. Clarifies Role of Lead Auditors in Corporate Financial Reports

Asked on April 14, 2016

The WSJ reports that "Public Company Accounting Oversight Board wants parties in group audits identified and supervised". "Auditors who contract other accountants or accounting firms to review a company’s financial reports would need to increase supervision of the work they delegate under a proposal from the government’s audit-industry regulator." What do you feel the effect of this will be to the company and the public?

Answers

Anonymous Sr. Internal Auditor • April 15, 2016

I agree with this proposal because increased supervision of delegated work ensures that the company's financial reports have received the amount of scrutiny needed for an unqualified opinion. The effect to the company would be an added layer of diligence and due care. The effect to the public would be greater assurance that the financial reports represent the company's true financial position.

Ken Stumder Finance Director / Controller • April 15, 2016

Auditors are extremely cautious about placing reliance on work performed by another firm anyway so I am not sure what this changes. Is it a new disclosure requirement for audit firms?

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