by Tracey Miller-Segarra
Washington - The pieces are finally beginning to fall into place.
On the heels of naming nationally recognized auditing authority Douglas R. Carmichael as its inaugural chief auditor, the Public Company Accounting Oversight Board named KPMG partner and former American Institute of CPAs auditing expert Thomas Ray to the post of deputy chief auditor.
Ray, 43, is currently a KPMG partner in the Department of Professional Practice - Assurance in New York, offering advice on professional standards and firm policy. His position became effective June 1.
In his new role, Ray will work closely with Carmichael. The chief auditor and his staff will report to the board on significant issues related to the accounting profession, and work with other organizations, such as the Securities and Exchange Commission, the Financial Accounting Standards Board and the AICPA.
“Tom Ray’s qualifications combine an extensive technical background in auditing standards and practice with a highly developed concern with protecting investors,” Carmichael said. “I look forward to working with him.”
Ray said that he was recruited by the PCAOB and interviewed with the entire board earlier this year. “I was quite content at KPMG, but they caught my interest and convinced me of the significance of what they were doing and the amount of responsibility they were asking me to take on. I’m extremely excited - it’s a once-in-a-career type of opportunity.”
Ray said that the biggest immediate challenges facing him in his new job are staffing up and determining how he and Carmichael intend to advise the board on how to promulgate auditing standards for public companies.
“Obviously, there are a lot of directions we can choose,” he said. He added that another priority would be to establish an advisory council to fulfill the board’s recent proposed rule on the standard-setting process.
In addition to Carmichael and Ray, the board is in the process of hiring some 200 additional auditors in preparation for its inspection of firms who audit SEC clients. The board is ramping up to start reviewing the Big Four audit firms later this year, and will widen its probe to all accounting firms in 2004.
Last month, the board also officially debuted its Web site at www.pcaobus.org.
“It sounds like the PCAOB is throwing an olive branch to the AICPA,” said industry consultant Allan Koltin, chief executive of Chicago-based PDI Global Inc. The PCAOB was created by the Sarbanes-Oxley accounting industry reform act, partly in response to criticism that self-regulation by the AICPA has not been effective. Carmichael also worked at the AICPA for 13 years as vice president of auditing standards.
“On a positive note, it’s nice to see that they’re pulling in someone who has experience on both sides of the table, who worked at the AICPA and also was in the trenches of a Big Four accounting firm - having to deal less with the theoretical and more of the practical reality of applying the standards in real-life client situations,” Koltin added.
AICPA chair William Ezzell cheered the news. “I think Tom’s appointment is good for the PCAOB and the profession,” he said. “Having someone with recent and in-depth, hands-on experience doing audits will benefit all involved. I think it will be important to the PCAOB to bring on board qualified individuals who will garner the respect of audit firms and preparers.”
Prior to joining KPMG in 2000, Ray was the director of audit and attest standards at the AICPA. In his post, he was responsible for putting AICPA auditing and attestation standards-setting activities into practice and was the group’s senior technical advisor to the Auditing Standards Board.
Ray joined the AICPA in 1995, after 13 years with Grant Thornton as an auditor. He began his career in the Dallas office of the firm in January 1983, and is a CPA in both New York and Texas.
Said Ray, “I enjoyed my time with KPMG and now look forward to returning to standards-setting with enhanced knowledge and experience.”
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