|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
Auditors And Corporate Governance
Staff Writer – Business Recorder
Securities Mosaic. November 15, 2005
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EXCERPT: The recent series of corporate crises around the world holds many different lessons due to the peril of weak auditing and the risk of inadequate governance structure. But there is generally one lesson that is financial statements do not provide complete picture of soundness of the company. Consequently the governments and the regulators throughout the world have responded to some degree by tightening the accounting and auditing standards to avoid disclosures and oversight in public companies. There regulatory development throughout the world has been that in the United States the PCAOB adopted a negligence standard of liability that applies to the conduct of individual auditors who cause their audit firms to violate the securities laws or related rules. It also adopted an auditing standard on reporting whether a previously reported material weakness in internal control continues to exist as of a date specified by the management. The Philippine Congress is considering legislation that, among other things, would require the audit partner to rotate every five years. The government of South Africa proposed to require audit partners to rotate every four years with two years cooling off period. It has also introduced Companies Amendment Bill which contains regulatory framework for the auditing profession including the establishment of a new independent oversight body. The Department of Trade and Industry of the United Kingdom has published a document pursuant to Audit Quality Forum Report on the need for research into the perception of investors, brokers, advisers and audit committees of competition and choice in the audit market, and how and why changes of auditors occur. It has also undertaken project to develop simplified standards for small and medium sized entities. The revised Code of Corporate Governance of Singapore expands the scope and power of audit committees to include ensuring the integrity of the company's financial statements, reviewing the effectiveness of internal control and making recommendations to the board regarding the engagement of the external auditor. |
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