Proxy advisor Glass Lewis & Co. is disclosing some findings from a recent study on auditor changes. In 2005, Glass Lewis reports that 72% of the 1430 auditor change filings provide no reason for the change.
“In many respects, today’s disclosures of auditor changes often are no more transparent than the disclosures Enron Corp. made of the special-purpose entities it so famously used to cook its books,” Glass Lewis’s editor of financial research Jonathan Weil said in a note to clients.
Interestingly, the study says that companies changing away from a Big Four firm were less likely to disclose a reason than the overall group.
Glass Lewis concludes that the SEC ought to require more disclosure.