Auditing | AccountingWEB



Annoying Pop-Up Ads Trigger E-Commerce Audit

A recent announcement by the Federal Trade Commission (FTC) shows how use of annoying pop-up ads can lead to e-commerce audits. The announcement describes a legal action taken by the FTC against an individual who subjected Web surfers to an unusual amount of pop-up ads.
Community News

Andersen Testimony Raises Doubts, DOJ Plans Rebuttal

On June 3, 2002, Andersen called its last witness in the shredding case brought against the accounting firm by the Department of Justice (DOJ). The DOJ charges that Andersen obstructed justice by destroying important documents out of fear of an investigation by the Securities and Exchange Commission (SEC). But testimony by Andersen partners and staff has raised doubts about the timeline and motive needed to prove those charges.

IIA Forms New Group for Financial Services Auditors

On May 30, 2002, the Institute of Internal Auditors announced its merger with the National Association of Financial Services Auditors (NAFSA). The members of NAFSA voted this week to dissolve their association, thereby finalizing discussions between the two organizations that had been in process for about two years.
Community News

Andersen Defense Wraps Up Testimony in Houston

Friday, May 31, 2002 is expected to be Big Five firm Andersen's last day of testimony in defending itself against an obstruction of justice charge brought by the U.S. Department of Justice.

New GASB Statement Addresses Foundations

On May 28, 2002, the Government Accounting Standards Board (GASB) issued GASB Statement No. 39.

New Evidence Relates to Kmart's Accounting Irregularities

Discount retailer Kmart is undergoing an internal investigation into irregular accounting practices in light of the company's restatement of 2001 and 2002 earnings and its Chapter 11 bankruptcy filing. The Securities and Exchange Commission (SEC) is investigating Kmart, as is the U.S. Attorney's Office for the Eastern District of Michigan, and the FBI is also investigating Kmart on possible criminal charges. The company filed for bankruptcy on January 22, 2002.

ACFE Names Toby Bishop President and CEO

The Association of Certified Fraud Examiners (ACFE) has announced that former Andersen partner Toby J. F. Bishop will become its new president and chief executive officer, replacing Dr. Gil Geis, professor emeritus from the University of California, Irvine, who has served as ACFE president since 1992. Mr. Bishop was partner-in-charge of Fraud Research and Development for Andersen.
Community News

Peregrine Fires KPMG, Moves on to Third Big Five Auditor

Software firm Peregrine has fired its Big Five auditor. Again.The San Diego-based firm fired Andersen less than two months ago – one of more than 500 firms that has done so this spring.

Bookkeeping Errors Contribute to $17.3 Billion Federal Loss

Making Enron's $600 million restated financial statements look like a mistake in a child's allowance, the U.S.

New Nasdaq Rules Will Put Audit Opinions in The News

On May 24, 2002, the Nasdaq Stock Market announced that its board of directors has approved several important rule changes, including one that will put audit opinions in the news. The Nasdaq Stock Market typically lists smaller companies, including many of the technology companies affected by the bursting of the dot-com bubble.
Community News

Andersen Defense Takes Center Stage

They say there's no rest for the weary. This Memorial Day weekend there was no rest for the trial participants, who are probably pretty weary themselves. While others around the country enjoyed barbecues and auto racing and said solemn words for those who gave their lives for our country, the U.S.
Community News

Andersen Endures More Shake-Ups and Another Week in Court

As Week Three of the federal obstruction of justice trial comes to a close, Arthur Andersen LLP's lead attorney, Rusty Hardin, attempts to pick up the pieces from a week of testimony in which the prosecution has tried to show that Andersen management was wary of possible repercussions from a pending Securities and Exchange Commission investigation and as a result ordered or at least condoned the destruction of possibly incriminating documents.FBI Agent Raju Bhatia testified this week that the Feder
Community News

More Disciplinary Action for Andersen

The Texas State Board of Public Accountancy has fined Arthur Andersen LLP $250,000 in two separate disciplinary actions dating back to 1993 and 1989. Also a former Andersen partner has been reprimanded.In one action, Andersen was fined $125,000 for its audit and stock appraisal for client Randalls Food Markets.
Community News

SEC Reaches Way Back for EY Independence Case

On May 20, 2002, the Securities and Exchange Commission (SEC) announced proceedings against Ernst & Young (EY). The case reaches back to the years before EY's consulting practice was sold to Cap Gemini.
Community News

Andersen Jury Watches Video Encouraging Document Destruction

Week three of the Andersen obstruction of justice trial in U.S. District Court in Houston began with the playing of a videotape for the jurors. The video showed Andersen partner and practice manager Michael Odom instructing audit team members on the benefits of destroying documents prior to litigation. "If it's destroyed through the course of normal policy and litigation is filed the next day, that's great," Mr. Odom says in the videotape.
Community News

Fireworks at Andersen Trial End in Judge Storming Off Bench

Tempers are flaring in the U.S. District Court in Houston where Judge Melinda Harmon has accused defense attorney Rusty Hardin of attempting to present evidence in an "underhanded" fashion. Late last week, after the jury had been dismissed, Mr. Hardin discussed with Judge Harmon the possibility of attempting to introduce into evidence at Andersen's obstruction of justice trial a copy of a bill the firm sent to Enron last fall for services relating to Enron's Securities and Exchange Commission inquiry.
Community News

Duncan Provides Controversial Testimony

The Andersen trial continues through the end of week two, while former Andersen partner, David Duncan, spends the week on the witness stand. Mr.

Europe Reforms Audits, Urges U.S. Cooperation

On May 16, 2002, the European Union (EU) issued long-awaited guidelines on auditor independence in an effort to avoid an Enron-type incident. Among other things, the guidelines recommend that accounting firms rotate audit partners after seven years with the same client and partners wait two years before joining a company they have audited. The recommendations are not binding. Each country is free to adopt stricter requirements. AccountingWEB's sister site in the U.K.
Practice Management

Business Roundtable Addresses Audits, Whistle-Blowing

The Business Roundtable, an elite association of 150 chief executive officers (CEOs) of leading corporations, has released guidelines to increase trust in U.S. companies post Enron. In a press release dated May 14, 2002, the CEOs encouraged all U.S.
Community News

Testimony Continues for Andersen's Duncan

Former Andersen partner and leader of the firm's Enron audit team, David Duncan, returned to the U.S. District Court in Houston on Tuesday, May 14, for his second day of testimony. Mr. Duncan is considered to be the lead witness for the prosecution's obstruction of justice case against Big Five firm Andersen.On his first day of testimony, Mr.


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