I have some really exciting news for us – but it will probably take another week (or two) before I push it out. However, in the meantime, I am reviewing audit fee data quality and I came across something hugely interesting. I did not know this – below is a an excerpt from the proxy statement filed by DBV Technologies S. A. filed on 4/26/2021.

Under French law, our shareholders must appoint, or renew the appointment of, the statutory auditors once every six fiscal years. In accordance with the applicable requirements of the French Commercial Code, we have two statutory auditors. Our shareholders appointed KPMG S.A. as one of our independent registered public accounting firms at the 2020 Annual General Meeting for a term of six years ending on the date of the 2026 Annual General Meeting, and the term of office of Deloitte et Associés, our other independent registered public accounting firm, shall expire at the 2023 Annual General Meeting. KPMG S.A. and Deloitte et Associés will remain our statutory auditors for purposes of complying with legal requirements and consistent with the six-year term, it being specified that KPMG S.A. was elected to by our shareholders at the 2020 Annual General Meeting of shareholders and Deloitte et Associés was elected by our shareholders at the 2017 Annual General Meeting of shareholders.

I am trying to avoid diving into that rabbit hole to sort out the details of that requirement. This creates an interesting issue with our database design. We currently have KPMG S.A. as the auditor for some years and Deloitte et Associes as the auditor for others, our immediate short-term fix is to allow both names in the auditor field in our database. I should state that the audit reports are jointly signed by both firms as you can see in the next screenshot.

While I need to avoid the rabbit hole right now I did run a quick search for (statutory w/5 auditors) and (france or french). My review was not exhaustive but right now I am going to observe that this may be a unique case as the more common pattern I am seeing in the search results is a mention of two auditors but only one auditor signature on the audit report and the fee disclosure only names the auditor who signed the audit report. A different complication appears in the proxy statement of Altisource Portfolio Solutions. Its fee disclosure includes amounts billed by three firms, but the firms did not all perform the same role. Their audit report was signed by RSM, Mayer Hoffman McCann was their prior auditor. There is no mention of Atwell in their 10-K. The question though is how should the audit fees be presented for those two years? I was going to speculate about alternatives but I really don’t know enough. We currently report the total and I do think that is the best answer right now.

Represents $53,550 billed by MHM ($27,300 for audit fees and $26,250 for other fees); $296,866 billed by Atwell (for audit fees), which includes $20,000 paid to RSM; and $1,501,450 billed by RSM (for audit fees). Fees billed by MHM and Atwell include statutory audits required for regulatory compliance purposes.

I will be posting more when this process is complete. To tease what is coming – here is part of a Slack message I shared with Manish Pokhrel, our data guru, Overall – I think this is clear evidence of you managing the process really well.  Nice Job!