TheCorporateCounsel.net

Last week, Dave blogged about the PCAOB’s rather dismal assessment of audit deficiencies. With the PCAOB’s Chair very publicly ripping auditors a new orifice about shortcomings in their performance, investors also must be up in arms about audit quality issues, right?  Yeah, well, apparently not so much.  According to Audit Analytics, the capital markets’ trusty “arbiters of materiality” continue to vote overwhelmingly in favor of auditor ratification proposals – and by “overwhelmingly,” I mean in proportions that rival Joseph Stalin’s performance at the Soviet polls. Here’s what Audit Analytics found:

Throughout the last four years, our analysis on shareholder votes reveals that, on average, nearly 98% of total votes are cast in favor of auditor ratification. Shareholder votes filed between January 1, 2020 and December 31, 2022, continued that trend for a fifth consecutive year. Votes against auditor ratification comprised nearly 2% of the total votes; abstained votes account for the remaining 0.4% of total shareholder votes cast.

Audit Analytics says that fewer than 5% of shareholder votes were cast against the auditor, 93% of the time for proposals made during 2020-2022, although the frequency of votes in which more than 5% were cast against ratification increased. It also highlights the handful of situations in which a high percentage of shareholders voted against ratification.

– John Jenkins