Grant Thornton LLP has named a former audit partner and an investment industry leader as outside advisers to the firm’s board in a bid to boost audit quality.
The global network becomes the latest large accounting firm to bring in independent experts to provide advice on how it delivers audit services. Last week, Ernst & Young LLP announced a similar move.
Chris Mandaleris and Ann Yerger will join Grant Thornton audit partner and partnership board member Seth Siegel on the Audit Quality Advisory Council, the firm announced Jan. 30, the date of the council’s first meeting.
The outside experts will provide consistent and objective advice to the firm’s board and meet with that governing body of 10 partners periodically, said Jeff Burgess, national managing partner of audit services.
“We want to be the best firm in the profession from a quality perspective. It’s really simply that that compels us to create this council,” Burgess told Bloomberg Tax.
Mandaleris previously served as senior deputy director of the Public Company Accounting Oversight Board’s inspections division. He is a retired Ernst & Young LLP audit partner.
Yerger is a former executive director of the Council of Institutional Investors and currently serves on the board of Hershey Entertainment and Resorts Co.
Burgess said the advisers will be paid. They will have access to staff and any information that would help them evaluate the firm’s quality controls and find room for improvement.
“We’ve employed these folks for a reason. I think from a practical perspective, their recommendations are going to carry a lot of weight,” he said.
Plans to create the independent council have been in the works for over a year, Burgess said.
Accounting firms are under pressure from regulators to improve the effectiveness of public company audits, on which investors depend to ensure reliable financial reporting. In addition to EY, KPMG LLP added two independent directors to its governing board in 2018.
Wes Bricker, the Securities and Exchange Commission’s chief accountant, has urged firms to bring in outside perspectives and expertise into the board room. The Public Company Accounting Oversight Board has said it plans to review its rules for audit quality control as part of its effort to reduce audit violations.