A proposition to broaden the requirements for auditors to determine, examine and interact all business offenses of laws and guidelines remains in direct dispute with existing guidelines, and it runs the risk of weakening audit quality and self-reliance, 2 House Republican chairmen stated Wednesday.
The Public Company Accounting Oversight Board provided the proposed guideline in June after a split 3-2 vote. In a letter, House Financial Services Committee Chairman Patrick McHenry (R-N.C.) and Capital Markets Subcommittee Chairwoman Ann Wagner (R-Mo.) advised the board to reevaluate. Auditors are illegal specialists and need to not be anticipated to operate as law enforcement representatives, they stated.
“The existing oversight and enforcement frameworks competently address instances of noncompliance,” the legislators stated. “While auditors have traditionally been responsible for detecting illicit activities as part of financial audits, broadening their purview to encompass noncompliance with all laws and regulations could blur the lines between legal, managerial and audit functions.”
Earlier this month, ABA accompanied 20 trade associations to reveal issues about the proposition, stating the language in the guideline was unclear and threatened to turn regular audits into extensive examinations. “This would not only blur responsibility between the legal, management and audit functions, but would also divert auditors’ time, attention and resources away from auditing financial statements,” the groups stated.
