TheCorporateCounsel.net

September 5, 2013

Deputy Director Paula Dubberly to Leave Corp Fin

Corp Fin Deputy Director Paula Dubberly has announced that she will soon be “retiring” – Paula is still young so I’m sure we will see her in our field in some capacity.

I have a soft spot in my heart for Paula. You probably wouldn’t be reading this if it wasn’t for her. Paula was my supervisor when I returned to the SEC for my second stint. She was a great leader who taught you much and fostered your development. She made the effort to champion me – something rare both in and outside the government . She has done that for many Staffers – reflected by the fact that many in Corp Fin leadership positions today used to work for Paula. Beyond that, Paula takes the time to really care about all those that work for her, including the support staff.

Paula also was the model SEC Staffer in that she firmly believes in the mission of the agency. Her breadth of knowledge is pretty remarkable – the range of rulemakings she has guided over the years is incredibly wide, from executive pay to asset-backed securitization. I’m sad to see her go as I know she will be missed by the Staff – but wish her luck on the next chapter in her life…

Study: 11 Years of Audit Fees

As noted in this study posted in our “Audit Fees” Practice Area, Audit Analytics found that for 2012 the ratio of audit fees over revenue was the lowest since 2004, the lowest since the implementation of Section 404, including:

Non Audit Fees as Compared to Audit Fees: In 2002, non-audit fees represented 51% of the total fees paid by research population of accelerated filers, but after three years of steady decline non-audit fees appear to have leveled off at about 21% of total fees. To some extent, the drop in non-audit fees as compared to audit fees is attributable to the Auditor Independence Rules adopted by the SEC in 2001, which precluded the principal independent accountant from performing certain non-audit services to ensure auditor independence when performing the independent audit.

Non-Audit Fees as a Percentage of Revenue: During 2002, the cost of non-audit fees paid by the research population for every million dollars in revenue was $387. After four years of substantial declines, the population paid only $146 of non-audit fees for every million dollars in revenue during 2006. Thereafter, for the next six years, the value leveled off somewhat with an overall gradual decline. The 2012 figure was the second lowest value calculated for the eleven years under review: $134 for every million dollars in revenue.

Audit Fees as a Percentage of Revenue: The ratio of audit fees over revenue peaked in 2004 & 2005, when, for both years, the average amount of audit fees paid per $1 million of revenue was $592. After three consecutive years of decline the figure increased slightly in 2009, but the uptick is due to a decrease in revenues instead of an increase in fees. After another three years of decline, 2012 experienced the lowest value since 2004 (since the implementation of SOX 404): $472 of audit fees for every million dollars in revenue. The fees declined despite the extra work demanded of the auditors during the same period when more and more companies were required to obtain auditor attestations pursuant to SOX 404(b).

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:

– Experiment: Paying Auditors From a Central Fund
– Crisis Management 101
– Delaware Chief Justice Discusses Emerging Law
– Disclosure of Material, Non-Public Information in Surveys?
– Even More on “Director Access to Attorney-Client Privileged Communications”

– Broc Romanek