Audit failures. I have 30+ years of experience in the audit profession. As vice-chairman of business assurance at Coopers & Lybrand in 1993, I began a study to identify the causes of audit failures. My colleagues and I found they occurred in the presence of several systemic factors: poor audit supervision, lack of training, judgment errors in dispute resolution and serving high-risk clients.

Audit Failure – Yet Another Solution Looking For a Problem to Solve!

When was the last time you heard of a real live audit failure? I mean an Enron or WorldCom? Remember, Enron occurred in 2001 and Sarbanes Oxley was passed in 2002. You’re right if you say, you can’t remember the last one. Maybe it’s time to declare victory and move on. Not so fast says […]

Audit Failure – Yet Another Solution Looking For a Problem to Solve!

Having failed to push mandatory audit rotation through Congress, the “audit failure” crowd has now come up with yet another solution to the “problem.”  According to an article in the August 20th Wall Street Journal, as proposed by Robert C. Pozen, a lecturer at the Harvard Business School, auditors should be required to re-propose for […]

Audit Failures – Urban Myth and Reality

Evidence suggests that many found our website by searching for “audit failure.”  I don’t know why, but if you are interested in the subject, let me add the benefit of my 30 plus years in the audit profession to your education. “Audit failure” strikes at the heart of the audit profession.  Occurrence is an admission […]

Book review: Accounting Changes: Chronicles of Convergence, Crisis and Complexity in Financial Reporting

Let’s plug a book! Faithful followers of Insights will note that I have never had an original idea in my life, but there is not much of merit that I have stumbled across that I have not put to good use. Most of these good ideas come from listening, observing and reading. So it is […]

Audit Failure: It’s Time to Address the Cause

We asked ourselves – doesn’t serving a client where standing on principle could be severely punished create a conflict of interest? We concluded then – and I believe now – that it does. Emerson’s Professional Opinion, January 2002. The bankruptcy of Enron has caused focus – yet again on the role and performance of the […]

The PCAOB and the Future of Oversight

Originally published in The Journal of Accountancy, December 2004 The PCAOB and the Future of Oversight The key question is whether audit failures are caused by isolated errors or more systemic factors. As vice-chairman of business assurance at Coopers & Lybrand in 1993, I began a study to identify the causes of audit failures. My […]

Let’s Hear it for Sarbanes-Oxley

Our fundamental responsibility is to provide oversight with respect to the financial reporting of our companies, not minimizing audit fees. For years, as an audit partner, I was frustrated in the lack of attention paid by audit committees to the importance of internal control. Fortunately, those days are gone.