In compliance with the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) completed an audit in September of 2007 of King & Company, Certified Public Accountants, P.S.C. (Headquartered in Louisville, Kentucky) of which current Louisville Metro Council Member, Council Budget Chair, and Louisville Mayoral Candidate Jim King is President. The PCAOB, which was created to protect investors and the public interest by promoting fair, and independent audit reports, notified the firm on October 22, 2007 that it DID NOT PASS with flying colors.
Possibly because the results of said audit were disputed by Mr. King (See his letter dated March 25, 2009 attached to the audit), the PCAO didn't release it's findings until May 21, 2009. Here's the highlights (red font was mine) :
The inspection team identified what it considered to be audit deficiencies.8/ The deficiencies identified included deficiencies of such significance that it appeared to the inspection team that the Firm did not obtain sufficient competent evidential matter to support its opinion on the issuer's financial statements.9/ Those deficiencies were –
(1) the failure to perform sufficient procedures to test the valuation and accounting for stock options issued; and (2) the failure to perform sufficient procedures to support the Firm's reliance on controls at a service organization.
B. Review of Quality Control System
In addition to evaluating the quality of the audit work performed on a specific
audit, the inspection included review of certain of the Firm's practices, policies, and
procedures related to audit quality. This review addressed practices, policies, and
procedures concerning audit performance, training, compliance with independence
standards, client acceptance and retention, and the establishment of policies and
procedures. As described above, any defects in, or criticisms of, the Firm's quality control system are discussed in the nonpublic portion of this report and will remain nonpublic unless the Firm fails to address them to the Board's satisfaction within 12 months of the date of this report.
Why did Mr. King delay over a year in responding to the PCAOB Audit?
Is that what we can expect him to do as our leader?
I wouldn't mind knowing what other defects, and criticisms of the Firm's quality control system are in the hush hush portion of the report, but it looks from King's response like it could have something to do with parimutuel gaming and how to value equity-based payments? I dunno.
Here's a link to the non-public portion if you are one of those geeks that understand this kinda stuff: http://www.pcaobus.org/Inspections/Public_Reports/2009/King_and_Company.pdf
According to King's exhaustive facebook bio, he has a "determination to bring accountability and transparency to Metro Government,." He recently even described to Phillip Bailey with the Leo "my understandings of the guiding principles of business and my ability to function as a CEO and lead large organizations."
Why is it the audit of his accounting firm relevant? BECAUSE HE MADE IT RELEVANT.
He claims ability to function as a CEO and lead large organizations qualifies him to be Mayor of Louisville. Well, then let's look closer at how he operates companies so we know what to expect.