In the United States, the Public Company Accounting Oversight Board is already up and running under the chairmanship of Bill McDonough. Knowing Bill from his days as chairman of the Basel Committee, that’s no surprise. And there are similar initiatives emerging in the EU and elsewhere. These groups are interested in not only how audits are conducted but in the quality of auditing standards.
In particular, there is considerable concern that technological advances and rapid evolution in financial products are reducing the meaningfulness and effectiveness of the capital standards, at least for the largest, most sophisticated institutions.