Auditing

Auditor Independence Reforms? History Says 'No'

"Public confidence in independent auditors, which is essential to the success of the Federal securities laws, has been seriously eroded," the Senate subcommittee on accounting and management said......in 1976.These words came as a result of mounting accounting failures, including the biggest bankruptcy to date - Penn Central.That Senate subcommittee report in 1976 recommended the federal government set accounting and auditing standards, bar auditors from consulting for clients and force companies to rotate auditors every three years.The AICPA responded to the criticism by instituti
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Pitt Tells Congress 'Much More Needs To Be Done'

Testifying under oath at Congressional hearings, Harvey Pitt, Chairman of the Securities and Exchange Commission, gave his views on possible legislative actions and responded to a series of pointed questions, including “Are there any more Enron’s out there?” A quick review of the questions and answers will give you a good indication of the types of changes being discussed on Capitol Hill. Should Congress intervene with legislative actions?Chairman Pitt: The SEC h
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Community News

Enron Chief Refuses to Testify; Andersen Anthrax Scare

In the latest news of the Enron situation, former Enron chairman Kenneth L. Lay, upon advice of his attorney, refused to testify before two Senate panels. Mr. Lay had been scheduled to appear on Monday before the Senate Commerce Committee and the House Financial Services Committee this week.The decision came as a result of remarks on Sunday television news shows made by members of the Senate committees. According to Mr.
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Community News

Grant Thornton Weighs In On Accounting Reforms

Chicago-based Grant Thornton added yet another side to the multi-dimensional debate about the reforms needed to restore confidence in the accounting profession.
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Technology

CICA Issues Boardroom Guide on Information Technology

The Canadian Institute of Chartered Accountants has published practical guidance for boards of directors and others who oversee Information Technology (IT).
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Global Companies Tackle Auditor Independence and Oversight

In the U.S., the Enron collapse continues to be the subject of investigations by at least ten congressional committees. But the fallout has grown increasingly global in scope, and global companies are taking action to achieve the needed reforms without waiting for U.S. lawmakers.
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AICPA Statement on New Auditor Independence Position

The following is the text of an e-mail distributed to AICPA members on Friday, February 1, 2002 outlining the change in position where the AICPA now opposes the practice of a firm providing certain kinds of consulting and internal audit services to a public client which the firm audits.
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Community News

White House Cautions Agencies About Hiring Andersen

The Bush administration has issued a letter to federal agencies to carefully determine whether business practices and ethics are sufficient before hiring Big Five firm Andersen or Enron Corp. to perform government services.
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AICPA Reverses Stance, Won't Oppose Independence Reforms

In a stunning about-face on January 31, 2002, the president of the American Institute of CPAs (AICPA) announced his organization’s support for reforms of auditor independence that would bar accounting firms from doing certain kinds of consulting for their audit clients.
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Community News

Embattled Andersen Targeted on Several Fronts

New York City Controller William Thompson is considering rescinding Big Five firm Andersen's automatic approval to do business for the city. A "prequalified certified public accounting list" published by the city lists 97 CPA firms that are qualified to do business with city agencies. The controller is considering removing Andersen from the list. Mr.
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Practice Management

Accountants Unite To Better Measure Business Risks

The accounting profession has united under the aegis of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in an organized effort to develop comprehensive guidance on risks, including the kinds of business risks that toppled Enron.COSO is comprised of five member organizations: The American Institute of CPAs, the American Accounting Association (AAA), Financial Executives International, the Institute of Internal Auditors and the Institute of Management
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Practice Management

Survey Shows 'Immense Support for Auditing Reform'

A survey of Canadian business executives shows immense support for auditing reforms.
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Community News

Andersen Named in Class Action Suit

Lawyers representing more than 400 current and previous Enron employees have filed a class action lawsuit in Houston, naming several Enron executives, Enron's auditor Big Five firm Andersen, and the Northern Trust Company as defendants.
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Anonymous Tip Leads to Kmart Accounting Probe

With the Enron implosion still very fresh in the minds of American business, Kmart, which filed for bankruptcy last week, announced that it was beginning an investigation of its internal accounting practices. The investigation was triggered by an "anonymous letter," reportedly by company employees, expressing concern regarding unspecified accounting matters.
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GAO Announces New Rules on Auditor Independence

As Congress continued its investigations and calls for reforms escalated in response to the Enron collapse, the General Accounting Office (GAO) found the time was right to take bold action. It decided to break ranks with the rest of the accounting profession and issue yet another independence standard with which auditors must comply. Restrictions on ConsultingGAO’s new standard introduces significant changes.
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Tax

NCCPAP Leaders Speak Out On Enron & Accounting Issues

The leadership of the National Conference of CPA Practitioners (NCCPAP) announced today their concerns regarding the fallout from the events surrounding Enron. The leadership of the organization believes that this situation has the potential to permanently tarnish the reputation of this country’s Certified Public Accounting community.“Measuring the damage suffered by hard working taxpayers may take months, but make no mistake, the damage is substantial.
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Community News

Enron Suicide Overshadows Andersen's Finger-Pointing

J. Clifford Baxter, 43, a former Enron vice chairman, was found dead in his parked car last Friday morning, accompanied by a revolver and a suicide note. Although it is assumed that Mr. Baxter's death is a suicide, a final decision on the cause of death will be made after an autopsy is performed on Monday.Mr. Baxter was intimately aware of and disdainful of the questionable financial practices of the energy giant and resigned from the company last May. Mr.
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Pitt Gives Auditors A Lesson in 'SEC-Speak'

Speaking at a meeting of the Securities Regulation Institute, Harvey Pitt, Chairman of the Securities & Exchange Commission (SEC), spelled out some of the details of his plan to reform the accounting profession.
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Community News

Andersen's Duncan Won't Testify (Yet); Enron's Lay Resigns

Fired Andersen partner David Duncan, the lead auditor on the Enron engagement, is scheduled to testify today before the House Energy & Commerce Committee. Although Mr. Duncan has expressed a desire to cooperate with all Enron-related investigations, he has indicated he plans to invoke the Fifth Amendment and refuse to testify unless he is given immunity.Representative Billy Tauzin, R-LA, chairman of the House committee, has asked the U.S. Justice Department to authorize immunity for Mr. Duncan, but as yet no agreement has been reached regarding this issue.
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Public Oversight Board Agrees To Close Its Doors

On January 20, 2002, the Public Oversight Board (POB), the independent body that oversees the self-regulatory function for auditors of companies registered with the Securities & Exchange Commission (SEC), passed a resolution stating its intent to close its doors no later than March 31, 2002. Precipitated by remarks made just days earlier by SEC Chairman Harvey Pitt, the resolution removes any uncertainty about the Board's future.
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Voice of the Editor

What makes a company a great place to work? Experience, a ConnectEDU company, uses criteria that include benefits, career advancement opportunities, culture, and work/life balance to form its annual list of the Best Places to Work for Recent Grads. BDO USA and Ernst & Young both made the Top 25 list. Read what makes these firms stand out and find out what can be done at your firm to entice college grads.

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Gail Perry, CPA
Publisher/Editor-in-Chief, AccountingWEB
editor@accountingweb.com
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