It is more than that. Much of the auditing process is a matter of doing random checks to ensure that management has disclosed all that they should. There is nothing random necessary about the options situation.
If a company awards options, their policies and actions need to be closely reviewed to ensure correct procedure.
Any auditor who fails to ask these questions has failed and will be opening themselves up to liability.
It is their responsibility to add the options questions to their lists when they meet management.
No excuse!
Onésimo Alvarez-Moro
See article:
U.S. audit regulators on Friday issued an alert on stock option accounting practices, reminding auditors of their obligations if they observe illegal acts in the course of performing audits.
The Public Company Accounting Oversight Board (PCAOB), the overseer of U.S. public company auditors that was created under the 2002 Sarbanes-Oxley corporate reform law, reminded auditors to be "alert to the risk that the issuer may not have properly accounted for stock option grants."
More than 80 companies, mainly high technology businesses that make heavy use of stock options, are under investigation by the Securities and Exchange Commission for possible improper options accounting that may have illegally benefited executives.
See full Article.
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