Cadwalader allows sharing content.
Email to a friend or colleague:
In late September 2016, Andrew Ceresney, Director of Enforcement of the Securities and Exchange Commission (“SEC”), signaled the SEC’s renewed focus on the key role played by audit committee members and external auditors as the “gatekeepers” of the financial reporting process. While stating that the SEC would not second-guess the good faith actions of auditors, he pledged that auditors and audit committee members who failed to reasonably carry out their responsibilities under applicable accounting standards would be held to task. In addition, just days before Mr. Ceresney made these remarks, the SEC made good on this promise by bringing its first enforcement action for an audit failure against a Big Four firm in nearly seven years, and its first ever independence-related action against auditors for maintaining overly close relationships with their clients. At the same time that the SEC was preparing this case, the International Ethics Standards Board for A