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As part of the Senate-House reconciliation process, the House-Senate conference committee has released nearly 2000 pages of the “Conference Base Text” – these are the provisions that the conference committee is working off of – all of the governance provisions from the final Senate bill made it into the base text.

In the alternative, there is this 3-page press release from Rep. Barney Frank. Note that the House now has named all of its conferees (and here’s what is being negotiated today – this article notes some activity in the rating agency area).

Survey Results: Investor Perception of Independent Auditor’s Work

Below are the key findings of a recent survey by the CFA Institute regarding audit reports (see related info in our “Audit Process” Practice Area). This survey is notable because it provides a “customer” viewpoint on what the independent auditors provide. For starters, 72% of respondents said the audit report is “important” in their analysis and use of financial reports in the investment decisionmaking process, while 46% indicated it is “very important.” Here are more survey stats:

Report Language Describing the Nature of an Audit & Respective Roles of Auditor and Management (Pages 7 and 9)

– 73% agree that the auditor report’s language on the nature of an audit and respective roles of auditor and management could help reduce or manage the expectations gap that exists regarding the financial statement audit.

– Furthermore, 69% think it is important to provide these communications within the auditor’s report, with 33% indicating it is very important.

Disclosure on Roles of Auditors and Method of Determining Materiality

– An overwhelming 91% agree that in cases where there is more than one auditor, the identities and specific roles of other auditors should be disclosed.

– 82% agree that the method by which the auditor determines/assesses materiality should be disclosed.

Information about the Audit Process & Matters Related to the Audited Financial Statements

– 60% of respondents believe the auditor’s report should contain more information about the audit process itself and matters related to the audited financial statements. The findings show also that 37% of respondents believe the auditor’s report contains the right amount of information about the audit process itself and matters related to the audited financial statements.

Information on the Audited Entity (Page 18)

– 57% think the auditor’s report should contain more information on the audited entity. 40% think the auditor’s report contains the appropriate amount of information.
Additional Information in the Auditor’s Report (Page 20)

– 94% of respondents would like to see additional information in the auditor’s report

– 77% would like to see information about “audit materiality”.

– 72% would like to see information on circumstances or relationships that might bear on the auditor’s independence.

– 66% would like to see the level of assurance actually achieved in the audit.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Was That a Yes or a No? Depositions in the YouTube Era
– Second Circuit Provides Guidance as to When a Cautionary Statement Is Not Meaningful
– Trading of Private Company Stock: Issues to Consider
– Why is the Choice of Forum Important?
– Internal Controls Study: Fraud in Non-Accelerated Filer Companies

– Broc Romanek