Is Your Auditor Being Investigated? New Law May Expose Misdeeds
- Accountants will soon have to disclose probes to Pentagon
- Auditors concerned investigations won’t remain confidential
Photographer: Spencer Platt/Getty Images North America
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The Defense Department will soon force accounting firms it hires to disclose investigations they face, a requirement that chips away at federal protections that have long helped keep flawed audits of public companies under wraps.
The directive was slipped without notice into last August’s $716 billion defense bill by Rhode Island Senator Jack Reed. It could have a significant impact on the many accounting firms that bid for auditing and consulting work at the Pentagon.