Investors Beware: Some of Those Watchdogs? They're Lapdogs

In a post published on New York University School of Law’s Compliance & Enforcement blog, Jordan Thomas, Chair of the Firm’s Whistleblower Representation Practice, argues that accounting firms are failing “their promise to protect the public by acting as independent watchdogs over publicly traded corporations.”  Citing Public Company Accounting Oversight Board (PCAOB) inspection reports and recent high-profile SEC actions against KPMG and Orthofix, Thomas describes “an endemic lethargy – and oftentimes something far more sinister – that sullies the accounting profession and threatens the public interest.”

While Thomas applauds proposed new legislation that would create a whistleblower program at the PCAOB modeled after the SEC Whistleblower Program, he believes that more needs to be done to ensure that an auditor’s primary allegiance is to the public interest, including for “Congress and the SEC to reassess the exclusive auditing franchise awarded to CPAs” after the stock market crash of 1929. 

Read the full article: “Investors Beware: Some of those Watchdogs? They’re Lapdogs.”