Auditing

SEC Proposes New Audit Committee Requirements

The U.S. Securities and Exchange Commission voted on January 8th to publish for comment new proposals that would set the rules for oversight of auditors by audit committees -- and it agreed to put real teeth into the new rules. Any U.S. public company that doesn't follow the rules will be delisted. Limited exceptions were agreed upon for non-U.S. companies.
Community News

KPMG Invites Comments on Current Audit Issues

KPMG is publicly inviting comments on current audit issues through a series of paid statements in the Wall Street Journal. The first statement, which was published on January 6, 2003, explained that the firm is developing issues papers on a number of emerging trends and controversial accounting reforms. Topics currently under study by the firm include:Revisiting the audit model with an eye toward "bringing balance back to the balance sheet."The expanded role of the audit committee.The need for controls and transparency.Rules vs.

International Auditing Standards Available For Free

The International Federation of Accountants (IFAC) has provided the accounting world with a New Year's gift. Beginning this week, all documents issued by IFAC and the International Auditing and Assurance Standards Board (IAASB) are now available for immediate download at no charge.

PCAOB Urged to Take Audit Standards From AICPA

As members of the new Public Company Accounting Oversight Board (PCAOB) settled into their new offices, one of the first pieces of mail they received was a letter signed by three former chief accountants of the Securities and Exchange Commission (SEC).
Community News

After Tyco's 'Aggressive Accounting,' PwC Vows Selectivity

In a series of advertisements timed to coincide with the release of a critical report on the accounting practices of its audit client Tyco International, PricewaterhouseCoopers (PwC) is vowing a return to an era of greater selectivity in client service.

New Year's Resolutions For Auditors And Regulators

After a roller-coaster year, many accountants are making New Year's resolutions and looking forward to a less traumatic 2003. Two CPAs offer their suggestions to auditors and regulators.For auditorsStop being afraid. Don't let fear of losing audit clients cloud your judgment. Start thinking more holistically. Resolve never to follow the prior year's audit program like a cookbook.

Accountants on Alert - Florida Takes Disciplinary Action

It may not seem like a big deal - small errors and an inconsequential penalty - but the message to accountants is that authorities are watching and everyone needs to be extra careful to produce work of only the highest quality.A Florida accountant, Ronald L. Willett, and his firm, Willett Canter & McDaniel PA, have each been fined $1,000 by the Florida Board of Accountancy. In addition they have been placed on a one-year probation that includes a practice review and a review of all audits.
Practice Management

Special Enron Christmas Carol Collection

Just in time for the holidays, the Financial Times has published a collection of Enron Christmas Carols compiled by Stella Fearnley of the Institute of Chartered Accountants to satirize this year's corporate accounting scandals.Here are a few of the carols:Enron Investors and employees (tutti busti) - O, come all ye faithfulO come, bent directors,Profit from your dealings.O come ye, O come ye to Washington.Make big donationsTo the politicians.The SEC won't get you,The SEC won't get you,The SEC won't get you,Until we're all bust!Arth

GAO Says SEC Could Take a Lesson From FASB

The General Accounting Office (GAO) has released a report on "Actions Needed to Improve Public Company Accounting Oversight Board Selection Process." At the top of list are improved communications and other lessons that can be learned from the Financial Accounting Standards Board (FASB).
Technology

Updating The Auditors Toolkit

by Roman Kepczyk, President, InfoTech Partners North AmericaMany firms are already in the process of transitioning their audit processes to the “less paper” or digital environment. They have invested significantly in their auditing and document container applications as well as in their training to maximize productivity. To further optimize this investment, it is imperative that CPA firms also update the tools that auditors carry into the field. Below are five considerations for updating your Auditor’s Toolkit.

Some CPA Firms May be Prevented From Auditing Banks

Federal regulatory agencies including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) are asking for public comment on proposed rules that would enable the regulators to remove, suspend, or bar an accountant or an accounting firm from performing audit and attestation services for certain financial institutions.The proposed rules suggest that, with good cause, accountants and accounting firms may be prevented from providing audit and attestation services for insured depository institutions with assets of $500 million or more.Good c
Community News

Sentencing For Andersen's Duncan Postponed Again

Like a moth caught in a spider's web, former Andersen partner David Duncan has once again had his sentencing postponed so that the prosecutors from the U.S. Department of Justice can continue to question and interview him in conjunction with their investigations of Enron, Andersen, and executives from both companies.Mr. Duncan plead guilty to obstruction of justice last April and was scheduled to be sentenced in August. The sentencing was postponed until October, then again it was rescheduled for January 3. Now U.S.

SEC's Cutler Warns Firms of Tougher Penalties

Stephen Cutler, Director of the Enforcement Division of the Securities and Exchange Commission (SEC), warned accounting firms of tougher penalties ahead for audit failures. He also provided practical advice on how to avoid the penalties.Speaking at an AICPA conference on December 12, Mr. Cutler said, "It's time to adopt a new enforcement model," under which the SEC would start bringing enforcement actions for audit misconduct against entire firms, in addition to individual auditors.

GAO Report Expected to Clear SEC's Harvey Pitt

The U.S. General Accounting Office (GAO) is expected to release a report next week on the events leading up to the appointment - and subsequent resignation - of William Webster as Chairman of the Public Company Accounting Oversight Board. The report is expected to clear outgoing SEC Chairman Harvey Pitt of most responsibility for the incident. Chairman Pitt resigned on Election Day after being widely blamed for forcing the other SEC Commissioners to vote on Mr. Webster's candidacy without knowing vital information about his background.
Community News

PwC Alerts Audit Clients to Darker Side to Reforms

According to a report in the Financial Times, PricewaterhouseCoopers (PwC) is warning audit clients that audit reforms may have a darker side. Some clients can expect higher fees and other adverse effects caused by the firm's reactionary steps to the Sarbanes-Oxley Act.PwC's CEO Samuel DiPiazza has indicated: PwC may drop some large audit clients because the work is no longer economically feasible.Other companies may be dropped if they refuse to pay for certain services, such as risk assessment, that help the firm complete a proper audit.Mr.

AICPA And ACFE Offer Free Training on Fraud Detection

The American Institute of CPAs and the Association of Certified Fraud Examiners (ACFE) have jointly developed a one-hour training course that can be used by businesses and given to clients. The course is entitled "How Fraud Hurts You and Your Organization."Through real-life case studies, the course shows how trusted employees at all levels can become tempted to commit fraud.
Tax

SEC's Independence Plan Closes Door, Opens Window

The U.S. Securities and Exchange Commission (SEC) has exposed for comment a lengthy and innovative auditor independence proposal. This proposal will result in lower revenues for some firms because it closes the door on some tax services. But it also opens a window in the sense that other provisions could open up new opportunities that bring in more revenues.

PCAOB to Start Reviewing Accounting Firms by Mid-2003

At its second closed-door meeting, the Public Company Accounting Oversight Board (PCAOB) spoke privately with members of the American Institute of CPAs (AICPA) and the Financial Accounting Standards Board (FASB). According to media reports, the discussions centered around the board's plans to begin collecting fees and conducting reviews of accounting firms.Board member Kayla Gillan said the oversight board is eager to begin conducting its own investigations by next summer.

PCAOB Meets To Reconsider AICPA's Audit Standards

The Public Company Accounting Oversight Board will hold its second closed door meeting today. A key item on the agenda is the decision of whether or not to endorse AICPA's audit standards. A motion had been made at the board's first meeting to formally adopt the AICPA's audit standards, at least on an interim basis.

AICPA Proposes Seven SASs Related to Audit Risk

The American Institute of CPAs (AICPA) released an exposure draft of seven proposed Statements on Auditing Standards (SASs) related to audit risk. The proposed standards are designed to enhance the auditor's use of the audit risk model and improve the effectiveness of audits. They are also likely to increase the overall work effort by the audit team, particularly for new engagements and when first implemented on continuing engagements.

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