PCAOB Says CPA Firms Are Toeing the Line
Public Company Accounting Oversight Board chairman William McDonough testified at the Senate Banking Committee that the initial round of firm inspections is proceeding without a hitch. He told the panel firms are cooperating without any "twisting of arms" at accounting firms, and investors' confidence may be restored if serious wrongdoing doesn't recur.

McDonough also gave a general status report on the PCAOB's activities, saying that the firm inspection process gave his board its best chance to peer inside an auditor's processes and culture.

"There are a number of areas on which our inspections will focus that have not been the traditional focus of the peer review process," he said, itemizing:
-- An evaluation of the “tone at the top” of registered firms. We want to know the nature of the messages that are coming from the highest levels of the firms and their frequency;
-- We are going to look at partner compensation and promotion. We are going to look into what behaviors are rewarded – and thus reinforced – through compensation and promotions; and
-- We will consider the firms’ overall communication and training practices with regard to all firm professionals.

Get his, and the testimony of others on the panel, at U.S. Senate Committee on Banking, Housing, and Urban Affairs