Firm rotation, XBRL put auditors in the spotlight
Let's talk auditing for a few minutes.
The big news, of course, is the PCAOB's bid to enact mandatory audit firm rotation. Such a move would limit the number of consecutive years a firm could audit a public company and, the PCAOB hopes, enhance auditor independence and objectivity.
Not everyone thinks it's a good move, though, and there's a spirited debate taking place among folks like Francine McKenna, Jim Peterson, the Wall Street Journal's Matthew Quinn and others.
If you want to join the debate, the PCAOB is accepting comments through Dec. 14. If you have an opinion, now's the time to speak up.
And while you're chewing on that, let's throw XBRL into the auditing mix, too.
The XBRL discussion typically revolves around public companies and the issues they face in meeting the SEC's XBRL deadlines. The occasional non-profit company and government entity enter the discussion from time to time, but little is said about the impact the XBRL movement will have on the auditors of companies that file their financials via XBRL.
Eric Cohen, though, is speaking up.
Auditors aren't required to play an active role in XBRL implementation, but Cohen, who co-founded XBRL itself, said they can still do plenty to help their clients make the switch through services like assurance, knowledge-sharing and training.
"Just because the SEC says there is no required auditor involvement, it doesn't mean our clients aren't looking to their auditors for help, or even expecting it," Cohen said. "Many companies believe their auditors are the best people around to help match their existing financial statement facts with the concepts in U.S. GAAP financial reporting taxonomy. Or maybe their auditors can just take a quick look to see that everything's OK."
Trusted advisors, right? That's what CPAs do. Cohen offers these and some other thoughts in this MACPA podcast.
Want to learn more?
You can find out more about XBRL by registering for a couple of important events.
- The first is the 2011 XBRL U.S. National Conference, set for Sept. 26-27 in Nashville. The conference will focus on GAAP reporting and how public companies can get more out of their investment in XBRL. The MACPA is among the conference's state CPA society partners, and MAPCA members can attend at a 10 percent discount by using the code "MACPA" when registering. Get details and register here.
- The second is a two-part series of XBRL webcasts featuring Cohen himself. The webcasts will give you all the details you need about the SEC mandate, the benefits of XBRL and what CPAs need to be doing now. The first webcast, an overview of XBRL, will be broadcast from 9 a.m. to 1 p.m. ET on Sept. 21. The second webcast, a how-to XBRL workshop, will be broadcast from 9 a.m. to 1 p.m. ET on Sept. 28. The webcast series will be re-broadcast monthly thereafter. Watch MACPA.org for details.
- Don't forget to check out the SEC's XBRL resource center.