US Democratic Senators Elizabeth Warren and Sheldon Whitehouse have called for tougher enforcement actions against accounting firms amid a sustained increase in flawed audits.
In a letter to the Public Company Accounting Oversight Board (PCAOB), the Senators noted that audit deficiency rates have exceeded 40% for the past two years. As an example, they pointed to BDO, the sixth-largest accounting firm, where nearly all inspected audits last year had flaws. Warren and Whitehouse questioned whether "repeat offenders" are deterred by fines, which they described as "a drop in the bucket" compared to firm revenues.
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