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This is the 2nd match of the 5th round – the battle among the Final Four! In an unbelievable turn of events, the two cubes in today’s contest both made a last day push to move past their competitor in the Elite Eight. And the pink clear pig continues to roll even though it was seeded in the bottom half of the brackets before the tourney started. Lot of pig lovers out there! As noted in these rules (and keep sending more pics for the next tourney), please vote for one of the following two cubes below:

– Pink Clear Pig
– Toolbox

Auditing: The First Qualified Peer Review Report

Here’s news from Lynn Turner: As noted in this “Going Concern” blog, Deloitte & Touche has once again been cited for lax auditing. Previously they were cited by the PCAOB. This second qualified report on the quality of their audits comes from one of their peers – E&Y – and the AICPA. As discussed in the blog, the shortcomings highlighted relate to their failure to properly implement a “principles-based approach” and over a lack of auditing of management’s estimates. Auditing of estimates made by management is often of concern to investors because it is how management frequently manipulates and “manages” earnings. Furthermore, this supports the views of some at the PCAOB that auditors are “too close” to (ie. views) management as their client.

This is the very first qualified peer review report issued on a Big 4 firm, or one of their predecessors, since peer reviews began back in 1977. There have been well over 50 reports issued since then – and this is a first. To put it in perspective, not even Arthur Andersen who received a peer review report in 2001 after Enron and Worldcom imploded received a qualified report.

This raises a question as to what state boards of accountancy will do. They often require peer reviews and if a qualified report is issued, and no action is taken by the state board, then it raises the question of why require them in the first place. It also raises a question of what audit committees will do or what steps they will take to ensure quality audits are performed, especially with respect to auditing of management’s estimates or if a firm uses a “principle based” auditing approach.

Here’s something from the “Going Concern Blog” entitled “McGladrey’s PCAOB Inspection Report Is Pretty Awful.”

How Journalists Cover Governance

In this podcast, Ted Knutson of Thomson Reuters discusses the art of journalism, including:

– How do you get story ideas?
– How do you figure out who would be good people to talk to for a story?
– What have been the biggest types of surprises when researching a story?
– What is your favorite area to report on?

– Broc Romanek