Accounting Profession Defense
The defense of the accounting profession has been a mainstay of Willkie’s litigation practice for more than 40 years. Owing in part to our long-standing representation of the AICPA, our role in the formulation of Generally Accepted Auditing Standards, our assistance to FASB and (more recently) the IASB, and our present representation of most of the largest accounting firms, we have worked hard to earn our recognition as "the best in the city for financial reporting issues" (Chambers USA).
It is through our representation of the accounting profession’s preeminent professional organizations that the firm has been able to establish the foundation and depth of its expertise in financial reporting. The firm’s assistance to the AICPA in the formulation of Generally Accepted Auditing Standards not only has provided in-depth knowledge of the intricacies of GAAS, but has enhanced the accounting profession’s ability to communicate effectively the inherent limitations of a financial statement audit. Beyond GAAS, the firm’s involvement with the Financial Accounting Standards Advisory Council, which serves as the principal advisory council to FASB, has enabled the firm to provide input and guidance in FASB’s formulation of Generally Accepted Accounting Principles. More recently, the firm is also providing guidance of a similar nature to the IASB in its formulation of International Financial Reporting Standards. The firm has also been called upon to assist the accounting profession’s newly formed Center for Audit Quality in its mission to foster high-quality performance by public company auditors.
Beyond our work with these professional organizations, we have also been called upon to assist in the formulation of financial reporting legislation. Willkie played a key role in assisting the Senate Banking Committee in structuring hearings on a new financial reporting model for the 21st century. The firm also testified before the Department of the Treasury’s Advisory Committee on the Audit Profession, before the New York Stock Exchange’s Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees, and before the Panel on Audit Effectiveness of the Public Oversight Board. We also assisted in drafting parts of the Private Securities Litigation Reform Act of 1995, including in particular Section 10A. Other legislation in which the firm has played an important role includes the Securities Litigation Uniform Standards Act and the Uniform Accountancy Act.
All of this has contributed to an expertise providing a singular strength to the main work of the firm’s professional defense practice – defending the accounting profession in litigation and regulatory investigations. The firm has represented both U.S. and non-U.S. accounting firms and individual engagement personnel in national and international securities class actions as well as bankruptcy and state proceedings. Among our more notable achievements, we obtained the landmark jury verdict for the defense in the first securities class action tried to a jury under the Private Securities Litigation Reform Act of 1995.
Beyond litigation defense, the firm has been active in SEC and, more recently, PCAOB regulatory proceedings. Headquartered in our Washington office, the firm’s Compliance and Enforcement Group, which includes former senior staff of the SEC’s Enforcement Division, actively interacts with the SEC, the PCAOB, and other regulatory authorities in accounting investigations. Our governmental capabilities also encompass significant expertise in non-civil proceedings, as our group includes former Assistant U.S. Attorneys who have extensive background in the full spectrum of accounting issues. With the help of the firm’s international network of offices, we are experienced in handling accounting profession issues around the world.
The firm has also been asked to take a primary role in developing the profession’s approach to potentially fraudulent financial reporting governed by Reform Act Section 10A. At the suggestion of accounting profession leadership, Willkie has formulated and published basic parameters for audit committee oversight of independent investigations that are intended to serve as the predicate for an audit report on restated financial statements. The firm has sought to provide broader guidance to audit committees, boards of directors, corporate counsel, governmental authorities, and others through publication of the leading text on fraudulent financial reporting, Accounting Irregularities and Financial Fraud. Other Willkie publications include The Financial Reporting Handbook, Eighteen Safeguards To Corporate Self-Investigation, and numerous articles and essays.