BDO first to receive US audit seal of approval

A US watchdog is to deliver its first full report into a UK auditor this
week, delivering a ringing endorsement of mid-tier firm BDO Stoy Hayward, the
firm said.

As it emerged that the body had moved in to inspect Ernst & Young, BDO
said that it had already been scrutinised. The report identified nothing it
considered to be ‘a quality control defect.’ The full report from the Public
Company Accounting

Oversight Board is expected to be published shortly.

‘Other firms, as I understand, were worried that the PCAOB may be critical
and that would be damaging. We took the risk that the PCAOB would be positive,
which they have been,’ BDO managing partner Jeremy Newman said.

The reviews of UK audit firms have been expected since the introduction of
the Sarbanes-Oxley rules. BDO was keen to have the report completed to make it
plain that its own auditing was up to the standards of the Big Four.

Unlike the PCAOB, the UK’s Audit Inspection Unit keeps its findings
confidential. It is consulting on increasing transparency. ‘We took the view
that because the AIU will not publish their reports, the only way that we could
get the message into the marketplace that the quality of our audits was as good
as anyone else’s, was to get whoever was prepared to talk publicly about it to
do so,’ Newman said.

PCAOB inspectors visited E&Y’s offices for the second time this week,
while Deloitte, KPMG and PwC have yet to begin their assessments.

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