U.S. watchdog to revive proposal to name audit partner

Wed Dec 4, 2013 7:15am EST
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By Sarah N. Lynch

WASHINGTON (Reuters) - The U.S. audit watchdog will revive a controversial proposal on Wednesday that would require accounting firms to disclose the names of individual partners who work on company audits.

The Public Company Accounting Oversight Board's plan has been largely dormant since it was fist suggested in October 2011.

The proposal became a talking point for debate again earlier this year after veteran KPMG auditor Scott London pleaded guilty to allegations he passed confidential details about companies he audited to a friend who used them to make profitable trades.

The accountant admitted he gave jeweler Bryan Shaw inside information regarding at least 14 earnings announcements or acquisitions by KPMG clients, including Herbalife Ltd and United Rentals Inc. Shaw also pleaded guilty in the case.

When the company initially disclosed it had parted ways with London and two corporate audit clients, however, his identity at first remained a mystery.

Critics said at the time that, had the PCAOB proposal been in place, his name would have been disclosed much sooner.

Such information, they said, would have been helpful for shareholders of other companies whose books London audited.

The PCAOB's original 2011 plan called for new rules requiring audit firms to name the engagement partner in audit reports, as well as in annual report forms.   Continued...

Former KPMG senior auditor Scott London (R) and his lawyer Harland Braun leave the Roybal Federal Court Building after London's hearing in downtown Los Angeles April 11, 2013. REUTERS/David McNew