Auditing

A&A

AICPA Issues New Risk Assessment Standards

Eight new statements, collectively referred to as the Risk Assessment Standards, have been approved by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA). The new Statements on Auditing Standards (SAS), SAS No. 104 through SAS No.

Pentagon Bookkeeping Stops Auditors

The Department of Defense (DOD) has failed its audit to the extent that auditors have stopped wasting money trying to audit their books, according to Black Enterprise. Problems with the Pentagon books has allowed the DOD to pay troops, civilian workers, and contractors the wrong amounts; to lose track of equipment, such as planes and tanks; and to document trillions of dollars in transactions improperly, according to Black Enterprise. Gregory D.
Tax

Automatic Reporting & Withholding Leads to Less Cheating

The Internal Revenue Service (IRS) on Tuesday announced updated tax gap estimates for the 2001 tax year indicating a difference of $345 billion between what taxpayers should have paid and the amount actually paid.

Audit Slams Accounting Practices at VA

The U.S. Department of Veterans Affairs used misleading accounting methods to wrongly state that it had saved more than $1.3 billion, according to the Government Accountability Office (GAO).Those “savings” were used to justify smaller budget requests, which led to cuts in health care services to eligible veterans, according to GAO, the investigative arm of Congress."It's unconscionable," said Rep. Lane Evans, D-Ill., the ranking Democrat on the House Veterans' Affairs Committee, who requested the audit.
A&A

FASB Issues Final FSP for Cash Settlements on Contingent Events

Last week the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. FAS 123(R)-4:Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event. The guidance in this FSP amends paragraphs 32 and A229 of FASB Statement No.
Tax

2005, the Year of the Restatement and the Year KPMG Survived

With a background of former executives seen entering courthouses, called to account for corporate scandals of previous years, and indictments announced against individuals and KPMG partners, corporate accounting issues surfaced in a less dramatic way in 2005, through restatements of financials, at giants like American International Group (AIG) and mortgage companies, Fannie Mae and Freddie Mac.
Community News

Canadian Report Highlights Big Four Audits

A new report by the Canadian Public Accounting Board (CPAB) shows the Big Four have to improve their audit quality and adhere consistently to internal and professional standards. The CNW Group reports this is the CPAB’s third public report based on 87 audit engagements performed by the Big Four in Canada. The first public report was issued in October 2004 and the second in August 2005.Canada’s largest four firms are Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP, and PricewaterhouseCoopers LLP.
Practice Management

Mark Your Calendar: AICPA Employee Benefit Plans Update

If you or your firm specializes in employee benefits, the Employee Benefit Plans Accounting, Auditing and Regulatory Update Conference scheduled for December 12-13 at the Omni Shoreham Hotel in Washington, D.C., is a conference you won’t want to miss.

Challenges of Section 404 Compliance

Compliance with Section 404 of the Sarbanes-Oxley Act (SOX) is required in 2006. A report by the Public Company Accounting Oversight Board (PCAOB) states that both accounting firms and the public companies they audit will face “enormous challenges” this year as reported in CFO.com. This section of SOX requires that companies document their internal controls. “It is clear to us that the internal control assessment and audit process has the potential to significantly improve the quality and reliability of financial reporting.
Tax

Corporate Fraud Still Widespread, Difficult to Detect

The number of companies around the world that reported incidents of fraud increased 22 percent in the last two years, according to a new Big Four survey.While layers of new controls have been implemented to improve corporate governance, fraud is still widespread, difficult to prevent, and detected many times by chance, according to the biennial survey by PricewaterhouseCoopers (PWC), which interviewed more than 3,000 corporate officers in 34 countries.Fraud was detected by 45 percent of the companies polled, which is up from 37 percent in 2003, Reuters reported.

2006 PCAOB Budget Approved

The Public Company Accounting Oversight Board (PCAOB) has approved its 2006 budget of $128 million. The accounting industry regulatory agency will use a $19 million excess from a 2005 budget to reduce the 2006 accounting support fee paid by publicly traded companies according to Reuters. Accounting support fee assessments of $109.3 million are projected for 2006 while $136.1 million in fees were assessed in 2005 according to the Compliance Reporter. The approved budget has been passed onto the Securities and Exchange Commission (SEC) for final approval according to Reuters.
Community News

PCAOB Faults Company Audits & Takes Disciplinary Action

The Public Company Accounting Oversight Board (PCAOB) has issued an order revoking the registration of a Los Angeles accounting firm after finding serious faults in past audits. The sole shareholder was also barred “from being an associated person of a registered public accounting firm,” according to Yahoo Asia News. The registration of another firm and its principal shareholder was also revoked.The PCAOB found that the accounting firm Kenny H. Lee CPA Group Inc. did not conform to PCAOB rules and audit standards in two audits for wireless phones maker Axesstel Inc.

Hawaii Bottle Bill Fails Audit

After two years of preparation by Hawaii’s Department of Health (HDOH), the State’s Deposit Beverage Container Program or so-called “bottle bill” has become an accounting nightmare according to the state auditor’s report. There have been $39 million in collections as of June 2005 and HDOH still lacks an auditable financial accounting system.
Practice Management

Governance & Accounting Still Concern Investors

Things have improved but there is still cause for concern. That is the message investors and creditors seem to be sending in a special report published Monday by Standard and Poor’s.“Governance and accounting remain heightened areas of concern for investors and creditors, and it remains critically important for them to assess the often qualitative, intangible, and principle-based dimensions of governance and accounting,” said George Dallas, managing director and global practice leader, corporate governance, Standard and Poor’s in a prepared statement.
Education & Careers

CISA and CISM Are Strong Certifications

A study has found that the Certified Information Systems Auditor® (CISA®) and Certified Information Systems Manager® (CISM®) are notable certifications sought out by companies and hiring individuals.
A&A

2005 Sees Increases in IRS Audits

More than 10,000 more audits of small businesses organized as corporations were conducted during fiscal year 2005 than in the previous year according to enforcement data released by the Internal Revenue Service (IRS) on Wednesday. The number of large corporations and wealthy individuals audited also increased during the fiscal year ending September 30. These are just a few of the highlights were in remarks from IRS Commissioner Mark J.

Internal Audit Departments Seeking New Balance

For two years, Sarbanes-Oxley (SOX) has been the central, and some would say only, focus of internal audit departments at public companies throughout the U.S.. A new survey by Protiviti Inc. shows that focus may be shifting as three out of four participating companies see the need or are already taking steps to balance SOX compliance with other risk management priorities.
Community News

San Diego Officials Struggle with Throwing More Money at Accounting Problems

San Diego’s City Attorney, Michael Aguirre, on Friday asked the City Council to reject additional funding for the independent risk firm, Kroll, Inc. and law firm Wilkie, Farr & Gallagher, who are investigating the City’s finances, including disclosure practices relating to the $1.4 billion shortfall in the City’s pension fund. The two firms have said they will be unable to conclude their work by December as scheduled, because the City’s data search has not produced all of the records they need, the San Diego Union-Tribune reports.
A&A

It Pays to Take Another Look at Ocean Freight Charges

Retailers and importers importing goods via ocean freight may have a sum of $50,000,000 in erroneous freight rate charges waiting to be claimed according to Ocean Freight Refunds. Ocean Freight Refunds closely examines ocean freight charges for importers to determine if any errors have been made.

A CONVERSATION WITH...Arthur Korbin

Donor fatigue is a phrase not-for-profits are painfully aware of, especially in light of an overly active hurricane season that produced the Katrina disaster.With roughly $1.7 billion already given to hurricane relief efforts, scavenging for remaining donor dollars has been a difficult task for many organizations.Particularly hard hit are smaller, local charities that rely more heavily on donations from individuals than their national counterparts.

Pages