Cloaked Disciplinary Hearings for Accounting Auditors
May Break Open to Media, Public
Once hailed as the legislation that was supposed to expose creative-accounting misdoings to the disinfectant powers of daylight, Sarbanes-Oxley (sometimes shortened to "SOX" or "SarbOx"), has had some pretty outstanding holes in it, which have gone relatively unnoticed for almost a decade.
One of the most negligent of those "oversights" is the SarbOx language that--pun intended,--keeps oversight proceedings--proceedings meant to ensure honesty and accuracy in the accounting offices of America's publicly traded corporations--cloaked in secrecy.
However, changes may soon come that would put a public eye on auditors whose conduct is under examination by the congressionally appointed board whose job it is to ferret out wrongdoing on behalf of shareholders and anyone who has an interest in honest accounting.
This from a press release sent to journalists today by the Public Company Accounting Oversight Board:
Under current law, firms and auditors litigating with the PCAOB have little incentive to consent to public proceedings and can prevent proceedings from becoming public for long after the information would be most relevant to investors, other auditors, and interested parties.
“No other auditor, investor, audit committee, or member of the media is entitled to know what the PCAOB considers to merit discipline, whom it has charged, what issues are being litigated, or whether the PCAOB staff has prevailed or not,” said Acting Chairman [Daniel L.] Goelzer. “The public is in the dark about how the Board uses its enforcement authority until there is a settlement or an SEC decision on the Board’s sanctions.” PCAOB's Daniel Goelzer has assigned to his staff the task of writing new language to present to congress, which would allow disciplinary hearings to be open to the press and the public without consent of all parties, and without needing extraordinary merit for public scrutiny to be allowed, as is now the case.