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Nah, the reality is that it's very easy to figure out who's accountable for any specific project. While it may not be clear who is in charge of a firm as a whol
by tidepod12 6y ago
Nah, the reality is that it's very easy to figure out who's accountable for any specific project. While it may not be clear who is in charge of a firm as a whole, that is not the case at the project level. Every project/audit must be signed off on by a partner, and that partner is the responsible party for any and all firm activity that happens on that project/audit.
The water gets muddied because that partner may not actually be involved in the project very much, and in controversial situations they may try to blame someone else (such as a lower level firm employee who was involved) for any mistakes, but at the end of the day the partner who signed their name to the contract is the person held accountable.
- hyperdimension 6y agoIs this a similar type of standard Professional Engineers are held to? I'm sure they don't, e.g. design every member of a bridge and do the stress calculations by themselves, but when it comes time to certify the design, the PE (and the PE alone, if I understand the way it works correctly, regardless of how many people worked on the drafts) is the one upon whom the entirety of the blame lies should the bridge collapse.
- tidepod12 6y agoAFAIK, yes. Other people on the project/audit can be held responsible too if they contributed negligently, but the partner who oversaw the project is ultimately accountable for the work. That partner is also who the PCAOB/SEC would fine and/or suspend their accounting certification.
- FuckButtons 6y agoThis is correct, the firm will usually have internal fines for partners with inspection failures / comments. There is significant individual liability for an audit partner.