Auditing

Community News

Andersen Loses Biggest Banking Client, SunTrust

The board of directors of SunTrust Banks, Inc. voted this week to end its 60-year-old relationship with Big Five firm Andersen and has agreed to hire PricewaterhouseCoopers to perform the company's audit work in the future.The bank claims its decision had nothing to do with Andersen's recent problems stemming from its controversial Enron audit.

NCCPAP Wants Special Rules for Smaller CPA Firms

In testimony presented on February 11, 2002 at the New York State Senate Public Hearing on Independence in the Post-Enron Era, the National Conference of CPA Practitioners (NCCPAP) called upon state legislators to consider special rules for small and regional CPA firms.
Community News

Ernst & Young Promotes its Quality Control Safeguards

In a newly-released brochure entitled, Maintaining Your Trust, Ernst & Young (E&Y) publicly explains how it maintains its focus on high quality audits.

Congress Learns How Accountants Can Tag Future Enrons

Many people were surprised by the Enron collapse and lost money as a result. But James Chanos, head of a short-sell investment boutique, was not one of them. His firm profited from anticipating the company's demise. So Congress asked him to testify as to how he knew what no one else did. How to Spot the Early Warning SignsSurprisingly, many of the warning signs were out there in full view to anyone with an understanding of accounting.
Community News

Florida to Consider Sanctions Against Andersen

Florida state Senator, Walter G.
Community News

Accounting Industry Pushes Into Information Age

When did the accounting profession become known as the accounting industry? What happened to change it so dramatically? And what does the future have in store for tomorrow’s accountants? “Industrial Era” TacticsThe Chicago Tribune reports, it all started with the savings and loan crisis fifteen years ago (“Accounting Industry Counts on its Clout,” February 6, 2002).

AICPA Provides Help With Troublesome GAO Rules

A Web site notice from the American Institute of CPAs (AICPA) on February 8, 2002 cautioned members about the auditor independence rules recently released by the General Accounting Office (GAO). The notice said the GAO’s rules impose tighter restrictions on nonaudit services than the current AICPA’s audit standards.
Community News

FBI and SEC Will Investigate Global Crossing's Accounting

The Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) are investigating the accounting practices at Global Crossing, the telecommunications company that filed the fourth largest corporate bankruptcy in U.S. history last month.
Community News

State of Illinois to Investigate Andersen

The State of Illinois has officially jumped into the Andersen fray, beginning a formal investigation into Andersen's involvement in the collapse of energy giant Enron Corp.Illinois Attorney General, Jim Ryan, is pursuing two avenues in Illinois, home to Andersen's headquarters. He has launched an investigation under state law, and he has indicated Illinois would like to be considered as the lead plaintiff in a class action suit that is pending the federal court in Houston, where Enron is based.In Illinois, Mr.
Community News

NYSSCPA Testifies Before State Senate Committee in Post-Enron Era

The New York State Society of Certified Public Accountants (NYSSCPA), testified yesterday at hearings conducted by Senator P. LaValle, Chair of the New York State Senate Higher Education Committee.The testimony addressed CPA independence and regulation in light of the recent bankruptcy of the Enron Corporation.
Community News

Andersen Records Subpoenaed; Astros' Stadium May Change Name

Connecticut Attorney General Richard Blumenthal received permission from the State Board of Accountancy Tuesday to subpoena records from Big Five firm Andersen in relation to an investigation that could lead to sanctions against Andersen and the removal of Andersen's license to practice in the state. Mr.
Community News

D&T Ends Holdout - Will Split Off Consulting

Deloitte & Touche has announced its plans for separating audit from consulting services. In so doing, it joins Andersen, KPMG, PricewaterhouseCoopers and Ernst & Young, making support for this audit reform unanimous among the Big Five.Deloitte had told various partners of its decision to split off its consulting arm, but it is still unclear how the move will be accomplished.
Community News

Andersen CEO Outlines Vision for a New Era of Accounting

Big Five firm Andersen's CEO, Joseph Berardino, spoke to the House Committee on Financial Services Tuesday, further explaining his firm's role in the restatements of Enron's financial statements and describing his vision of the direction accounting should take in the future.Mr.

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

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
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.
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.
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).

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.

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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