Auditing

Another Hurdle on the Road to Compliance: Assessing Company-Level Controls

By J. Stephen McNally, CPA - For many companies, the deadline to comply with Sarbanes-Oxley Section 404 is literally weeks away. There is, however, another hurdle on the road to compliance, one often overlooked or consciously not addressed until the final phase of a company's overall Section 404 compliance efforts. This hurdle is the assessment of an entity's company-level controls.
Tax

AICPA Addresses Fraud in Audit Committee Guidance

As part of its ongoing fraud-prevention program, the American Institute of Certified Public Accountants today issued guidance to help U.S.
Community News

Auditors Hesitant to Use Judgment, Fear Challenges

Recent events have made auditors skittish about using their judgment in their work, as they fear challenges by lawyers, the media and regulators, Robert Herz, chairman of the Financial Accounting Standards Board (FASB) said in a statement reported by Financial Times.This reluctance to use judgment is in spite of a Securities and Exchange Commission (SEC) call for a principles-based approach to accounting.
Community News

NY Comptroller Issues Scathing Report on Accounting Firm

A school district in New York has sued its outside accounting firm for $12 million, asserting that millions of dollars in misspent funds went undetected.The lawsuit, along with a stinging report by New York State Comptroller Alan G. Hevesi, has prompted about 50 other Long Island school districts that used Miller, Lilly and Pierce to consider firing the East Setauket-based firm, according to Suffolk Life newspapers.The Roslyn School District contends that the firm missed the fact that the school superintendent, business manager and others misspent funds.
Tax

Reznick Group's Expansion Continues with Midwest Merger

Reznick Group Managing Principal Kenneth E. Baggett announced this week that Friduss, Lukee, Schiff & Co. (FLS) and Reznick Group will merge.
Community News

Federal Judge to Join KPMG as Vice Chair of Legal Affairs

KPMG LLP announced late last week that U.S. Chief District Judge Sven Erik Holmes will join the firm in the newly created position of vice chair - legal affairs, according to Eugene D. O'Kelly, chairman and chief executive officer. Judge Holmes, 53, the chief judge for the Northern District of Oklahoma, will resign in March from the federal bench in Tulsa, where he has served for ten years. He will serve as chief legal officer for KPMG LLP, and will direct the office of general counsel and the ethics and compliance functions within the firm.
Community News

Crain & Company Joins Horne LLP, CPAs and Business Advisors

Crain & Company, PLC, a leading local accounting firm, joined Horne LLP, CPAs and Business Advisors, a large Southeast regional accounting firm effective January 1, 2005. The merger follows a management agreement that began in July 2004. As one of the largest accounting firms in the West Tennessee area, Crain & Company, PLC, is increasing its range of services with the merger. Horne has eleven offices throughout the Southeast including offices in Tennessee, Mississippi, Louisiana and Alabama. "Our goal is to increase services for our clients," said Katherine G.
Practice Management

WorldCom Class-Action Suit Against Andersen to Proceed

In the last few weeks there has been good news and bad news for defunct accounting firm Arthur Andersen LLP as it strives to repair its reputation.Last month the Supreme Court agreed to hear an appeal of the company's June 2002 obstruction of justice conviction. That's the good news. This week, a federal judge in New York ruled against a motion to dismiss a class action suit brought against Andersen by WorldCom Inc., the Wall Street Journal reported.
Community News

Business Roundtable Supports Auditor Liability Cap

At a time when U.S. firms are more reliant than ever on quality accounting and auditing services, the influential Business Roundtable is supporting liability caps for auditors.The Roundtable is worried that the Big Four accounting firms could soon shrink to three or fewer firms if Congress doesn't act to stem the liabilities the firms face when things go wrong.
Tax

Audit Avoidance 101: Warding off a Visit from the IRS

No one wants to be audited. It's an experience that ranks up there with having a root canal or running into your ex and his new bride when you're sporting twenty extra pounds and a bad perm. But if you live long enough and earn a healthy income, it could very well happen to you. Still, there are ways to reduce your chances of an indigestion-inducing visit with an IRS agent.
Community News

Judge Rules that PricewaterhouseCoopers Withheld Evidence

A federal magistrate judge in Ohio has concluded that PricewaterhouseCoopers withheld evidence in an accounting fraud trial brought by an audit client.According to The New York Times, United States Magistrate Judge Patricia A. Hemann recommended a default judgment against the accounting firm for failing to turn over evidence sought by Telxon Corporation, which makes bar code readers.

Canadian Accounting Group Takes Oversight Fight to U.S.

A disagreement over the creation of Canada's audit oversight board has reached the United States, as a Canadian accounting organization has hired a Washington lobbyist to battle the two-year-old board.The Canadian Public Accountability Board (CPAB) is the counterpart to the U.S. Public Company Accounting Oversight Board (PCAOB).
Tax

Enron Directors Agree to Pay Part of $168M Settlement

Ten ex-directors of Enron Corp. have agreed to pay $13 million of their own money as part of a $168 million settlement of a lawsuit filed by shareholders who lost their investments after Enron's 2001 implosion, according to the Wall Street Journal.The agreement, announced Friday, is similar to one reached by former directors of WorldCom Inc.
Community News

Supreme Court to Hear Appeal of Andersen Conviction

The Andersen accounting firm scored a big victory in its ongoing efforts to overturn a criminal conviction stemming from its involvement in the Enron debacle, with the Supreme Court agreeing to hear an appeal in April.
Community News

RSM McGladrey Acquires Rockford BDO Seidman Office

RSM McGladrey last month increased its presence in the northern Illinois marketplace with the acquisition of the non-attest assets of BDO Seidman LLP in Rockford. In a separate transaction, McGladrey & Pullen LLP acquired the Rockford audit and attest assets.
Community News

Deloitte Claims Grant Thornton Held Back Parmalat Information

Big Four accounting firm Deloitte has accused a smaller rival, Grant Thornton, of hindering its audit of Parmalat, the once-mighty Italian dairy giant that collapsed amid accusations of widespread fraud.
Community News

Charges Against Deloitte & Touche Dismissed in Ahold Matter

Deloitte & Touche is off the hook in a class action suit brought by investors of Dutch retailer Ahold NV, thanks to a federal judge's move to dismiss claims that Deloitte engaged in deceptive conduct and recklessly disregarded misstatements in Ahold's financial documents, the Baltimore Business Journal reported.
Tax

PCAOB Slashes 2005 Budget, Reports Recruitment Shortfall

The Public Company Accounting Oversight Board last week approved a revised budget for calendar year 2005 reducing the Board’s 2005 accounting support fee from $152.5 million to $136.1 million.
Tax

Chili's Resturant Owners Resolve Tip Reporting Dispute with IRS

Brinker International, Inc., recently announced that it has resolved its previously disclosed dispute with the Internal Revenue Service (IRS) concerning the Tip Reporting Alternative Commitment (TRAC) agreement.Brinker paid an assessment of $17.3 million in December 2004 for employer- only Federal Insurance Contributions Act (FICA) taxes on unreported cash tips for calendar years 2000 through 2002.
A&A

FEI Outlines Top Financial Reporting Challenges for 2005

Financial Executives International has identified the top 10 financial reporting challenges for 2005. These challenges will impact the way companies manage their businesses, report their financial results, and compensate their employees. The challenges include:Stock option expensing. The Financial Accounting Standards Board (FASB) has mandated that all stock compensation be expensed beginning June 30, 2005 for most public companies. Smaller public companies and private firms have until the first annual reporting period after Dec.

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