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PCAOB Finds Failures in Deloitte's Audit Work

The Public Accounting Standards Board (PCAOB) issued its report on Thursday on its inspections from May to November 2004 of past audits performed by Deloitte & Touche. The report cited “audit deficiencies” including failure to identify or address accounting errors, according to Reuters.

SEC Looking to Streamline Auditor-Independence Rules

The Securities and Exchange Commission (SEC) is looking into simplifying its auditor-independence rules without weakening them.Advertisement
Community News

Report Exposes Errors Found in KPMG Audits

An annual report released by the Public Company Accounting Oversight Board (PCAOB) highlights errors found in a sampling of KPMG’s nearly 1,900 public audits performed between June and October 2004.

New Accounting Problems at Fannie Mae

Citing anonymous sources “close to” or “who have been involved” in the accounting investigation at Fannie Mae, the Dow Jones Newswires said late Wednesday that the company had “overvalued its assets, underreported credit losses, and misused tax credits,” the Washington Post reported.

CCH Capital Helps IRS Accurately Verify Investment Income

Have you ever wondered how the Internal Revenues Service (IRS) verifies the investment income reported by taxpayers on their returns? As of last week, the IRS will use the CCH® Capital Changes online database to conduct research, verify taxpayer returns or pursue audits of returns.CCH Capital Changes database contains information on more than 100,000 companies spanning more than 100 years and is considered the tax authority for accurate basis tracking and related tax issues involving equities in the U.S. and world capital market.
Education & Careers

UTPA Accounting Team Brings Home National Audit Case Title

Making the case for how auditors should handle renewable gambling licenses, the five-woman University of Texas-Pan American (UTPA) accounting team brought home the national title for the second straight year in the ALPHA/KPMG Audit Case Study competition.
Community News

Indian Trust Fund Scandal Points to Decades of Poor Accounting

Thousands of American Indians are still waiting for the federal government to account for billion of dollars held in trust in what is the largest and longest-running class-action lawsuit against the government.Advertisement
Community News

Marcum & Kliegman Achieves Largest Net Revenue Audited Gain

Marcum & Kliegman has achieved the largest net revenue audited gain for the first half of 2005 among non-national accounting firms, according to the Public Accounting Report.
Community News

UN Selects Deloitte For New Audit of Procurement Division

Deloitte Consulting LLP has been selected to perform a full financial and internal control audit of the United Nations (UN) procurement system that oversees the Iraq oil-for-food programme. The audit will focus on internal controls and procedures, operations, and staffing. The procurement office has been placed under the direct authority of UN Controller Warren Sach who made the announcement naming Deloitte as auditor.

Canadian Audits Need Improvement Says Oversight Board

The Canadian Public Accountability Board (CPAB) recently released its second public report on its examinations of public accounting firms, finding that audits by these firms needed significant improvements.

FAA Taking Sharper Look at Contracts

Questionable billing and hiring practices by a government contractor have spurred the Federal Aviation Administration (FAA) to determine whether certain contracts are costing the agency more money than they save.According to the Washington Post, the FAA is now reviewing so-called support services contracts with hundreds of small businesses because of problems with D.C.-based Crown Consulting Inc, which has 58 different contracts with the FAA worth up to $135 million.

The Next Level of Computer Aided Audit Tools

InformationActive, Inc. officially released its new data analysis and manipulation engine ActiveData for Office™ on August 10, 2005. The general release comes three months after ActiveData for Office™ was introduced as a limited release, at the Institute of Internal Auditors (IIA) Software Expo held in Fairfield, New Jersey.
Community News

Berkshire Hathaway Reveals Additional Inquiry

Regulators are probing the accounting methods used by Warren Buffett's Berkshire Hathaway Inc., expanding an investigation that started with its connection to American International Group Inc.Since January, authorities have been looking at whether Berkshire Hathaway's General Reinsurance Corp. unit helped AIG misstate financial results.

Sarbanes-Oxley Act Whistle-blower Provisions: Practical Concerns

The comprehensive protection afforded whistleblowers in the Sarbanes-Oxley Act (SOX) creates significant liability for companies covered under the law. Section 806 of Sarbanes affords direct protection against retaliation to whistleblowers employed in publicly held companies. Privately held companies are indirectly covered by the Act for three reasons, according to Marc Steinberg and Seth Kaufman writing for the Journal of Corporation Law of University of Iowa College of Law.

Financial Statements Study Finds Problems

RateFinancials has released the results of a two-year study that finds companies still take liberties in reporting their financials. In these overtly regulatory times, balance sheets and income statements still aren’t transparent even when prepared following generally accepted accounting practices (GAAP) standards that provide management with broad discretion at times. Although these statement inaccuracies may not violate GAAP standards, the company’s financial health may not be accurately reflected for intelligent investors and shareholders in clearly worded descriptions.

Comprehensive Market Research on SOX Supporting Technology

Technology supporting Sarbanes-Oxley compliance, fraud detection and financial statement audits has developed into a booming niche market in recent years. Although many publications and organizations offer lists of technologies, few comprehensive market research studies have been done. Cash Recovery Partners, LLC, published one of the few last week.“Anyone looking to use technology in improving the efficiency of their Sarbanes-Oxley engagements or enhancing their audit-related activities can learn something from this research.

IRS to Study Tax Compliance of S Corporations

The Internal Revenue Service announced on Monday, July 25, that it will randomly audit 5,000 tax returns of S corporations to study overall tax compliance of these popular corporate entities.The IRS will look at tax years 2003 and 2004. Examiners will determine whether income and expenses were accurately reported and whether the correct tax was paid, just like any other audit. The audits will start later this year and should be complete within two or three years.

SOX No Cure-All for Accounting's Ills

Accountants have been on high alert in the post-Enron work environment, but experts say that while accounting has improved, fundamental problems remain.The Sarbanes-Oxley Act of 2002 has required tight internal controls over financial reporting, better documentation and in general, more accountability. But some observers point out that, in effect, the fox is still watching the hen house. As long as the accounting firms are paid by the companies they audit, scandals will continue, New York Times columnist Joseph Nocera suggests.

Industry Concerned as PCAOB Adopts Ethics/Independence Rules

The Public Company Accounting Oversight Board adopted certain ethics and independence rules concerning tax services, contingent fees and related standards on Tuesday, July 26, 2005. Auditing Standard No. 4, which establishes requirements and provides direction on reporting whether previously reported material weakness continues to exist, was also adopted.The rules adopted Tuesday identify three circumstances when providing tax services impairs an auditor’s independence.

Analysts Ignoring Cost of Stock Options

Some Wall Street analysts are failing to figure the cost of stock options in their reports to investors, at least so far.Public companies last month were required for the first time to account for stock options as expenses, lowering their bottom line. For some companies, those new figures will be reflected in regulatory reports due soon, but stock analysts are not following suit, the Wall Street Journal reported.Analysts are leaving out the information in earnings-per-share figures included in reports to investors. For example, Microsoft Corp.


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