At the Deloitte Annual World Meeting in Singapore, Deloitte Touche Tohmatsu chief executive William G. Parrett said that better audits and further regulatory changes aimed at improving transparency are needed to tackle corporate fraud, build stronger capital markets and sustain Deloitte businesses over the long term.
Parrett also announced that combined member firm revenues for the 2006 fiscal year are expected to exceed $20 billion, and that all services -- audit, tax, financial advisory and consultative services -- had experienced near double-digit growth, or more.
Parrett said that improving audit quality requires a two-pronged approach, with Deloitte's 250 member firms continuing to improve their own audits, as well as advocating for regulatory changes where necessary. He noted that Deloitte has already taken steps to significantly improve its audit process with an overhaul of audit methodology and new enabling technology planned for testing next year.
He also called for two immediate regulatory improvements -- one enhancing requiring companies to publicly state their reasons for changing auditor and another making it a crime to lie to an auditor.
"In many jurisdictions neither happens," said Parrett, in a statement. "In the world's largest capital market, the United States, companies are only required to state whether there were 'disagreements' when changing auditors -- which is limited information."
He continued, "Companies change auditors for a number of reasons, and these can be initiated by the company or the audit firm. Regardless, transparent disclosure is appropriate. It is unacceptable to provide scant detail when dealing with capital markets where billions of dollars of investors' money are at stake."
Approximately 250 senior partners and leaders from across Deloitte member firms and Deloitte Touche Tohmatsu attended the three-day event.
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