Auditing

The Tax People Cometh

A company called the Tax People claims that it has devised a way to help members receive the lowest tax payment possible. The key is in setting up a home business focused on selling the tax relief system to others. Because of the way the business is set up, the owner can then write off nearly any activity in which he participates. From buying groceries to attending church to taking a vacation, all these activities can be written off.
Community News

Dial 'EY' for Audit: Verizon Chooses Ernst & Young

The newly formed Verizon Communications has chosen Ernst & Young as its accounting firm.EY beat out Big 5 rivals PricewaterhouseCoopers and Arthur Andersen, both of whom had relationships with Bell Atlantic and GTE.According to the SEC, however, Both PwC and Andersen will maintain independent accountant relationships with certain subsidiaries or investments of Verizon, providing audit and some non-audit services.

Survey Shows CPAs Want Accountability

A survey done conducted by Audimation Services at the Illinois Society of CPA’s business show indicated that the majority of accounting professionals agree with the need for strict assurances of auditor independence. The survey of 166 accounting professionals emphasized proposed regulations by the SEC regarding auditing activities.

E&Y to Face Trial in $65m Audit Claim

Ernst & Young faces a civil trial following a claim by three leading US banks that it failed to detect serious flaws in a client's financial statements, according to the New York Law Journal.The banks, led by LaSalle National Bank, claim that they increased funding to the now-bankrupt electronic wholesaler Kent International Associates by $65m on the strength of E&Y audits for 1995 and 1996.No irregularities were discovered in the audits, but later it was discovered that net sales had been overstated by almost 400% at the firm,

Arthur Andersen Faces Multi-Million Dollar Baptist Lawsuit

A religious organization has filed a lawsuit against Arthur Andersen, claiming its former auditor's negligence led to its bankruptcy and the loss of hundreds of millions of dollars.Arthur Andersen had acted as the auditor of the Baptist Foundation of Arizona (BFA) for 15 years.
Community News

SEC May Have Leaked News of Audit Irregularities

The ongoing probe by the SEC of Andersen’s accounting practices was made public last week when a story appeared in the Wall Street Journal that included confidential details of the investigation into the accounting services provided by Andersen to Waste Management Inc. The accounting problems that were uncovered last year resulted in billions of dollars of write-offs for Waste Management.
Practice Management

US Firms Reveal Best Practices for Audit Efficiency

The AICPA's Journal of Accountancy has a feature in its September issue in which firms cited for their excellent quality controls share practice tips on how to improve audits while saving time and enhancing profits. There is probably something for most practicing accountants here, and many well-organized firms will find much familiar ground.The first step towards audit efficiency is to manage and train clients. Auditors work best when clients provide them with the data they need.

Audit Woes at Long Beach Convention Bureau

While accounting problems continue to plague the Long Beach Convention and Visitors Bureau, the city auditor has decided to work with the Bureau's Audit Oversight committee to rectify the problem.Earlier this summer during an internal audit, the Bureau discovered inaccurate records used by the Bureau to determine the size of financial incentives for the bureau's sales staff.

Auditors should audit. It’s that simple.

Among Wednesday’s speakers at the Securities and Exchange hearings on auditor independence was John H. Biggs, Chairman, President, and CEO of TIAA-CREF, the Teachers Insurance and Annuity Association and College Retirement Equities Fund.TIAA-CREF manages $300 billion for its participants and invests $1.5 billion in new fixed income every month and even more in common stock. Biggs told of an incident that occurred several years ago in which his company relied on audited financial statements in making a $12 million investment.

Auditors and managers have the same interests, says Yale Professor

Speaking before the Securities and Exchange Commission on Wednesday, Professor Rick Antle of the Yale School of Management indicated it is usually unreasonable to assume an auditing firm than performs non-audit services is going to compromise its audit.Antle has studied the issue of auditor independence at length and is co-author of the white paper, "An Economic Analysis of Auditor Independence for a Multi-client, Multi-service Public Accounting Firm" submitted to the Independence Standards Board (ISB) on behalf of the American Institute of Certified Public Accountants (AICPA).In an inte
Community News

KPMG Takes a Stab at SEC Auditor Independence Proposals

Terry Strange, Global Managing Partner of Audit for KPMG, took the podium yesterday at the SEC auditor independence hearings, and offered his reservations about the hurried nature of the proposed auditor restrictions as well as the inappropriateness of the barriers to auditing firms providing non-audit services.Noting his complete support of the SEC's desire to modernize independence rules, Strange expressed two troubling aspects of the proposals:The bundling of the much needed revisions of existing rules on investments and family relationships
Technology

Columbia Law Professor Offers Auditor/SEC Compromise

"The contemporary auditing firm has moved from providing a single service at relatively modest cost to becoming a multi-faceted vendor of business advisory services," according to Professor John C. Coffee, Jr. of the Columbia Law School who testified today in the auditor independence hearings before the Securities and Exchange Commission.
Community News

CPA Firms Testify (Briefly) Before SEC

The SEC set aside one hour today for representatives from three of the Big 5 CPA firms to make their claims that proposed auditor independence guidelines would impede progress, prevent firms from attracting professionals with necessary specialized skills, reduce competition among CPA firms, increase costs of services, and in general make life miserable for CPA firms that provide consulting services along with traditional auditing services.Stating that CPA firms already enjoy a high level of independence standards and professional ethics, such standards and ethics being applicable to consult

Maintaining Independence Within the CPA Firm

Today, the SEC is beginning its hearings related to independence within an accounting and consulting firm, and are set to hear testimony from representatives of government and the Big 5.How does a CPA firm maintain independence when delivering both audit and consulting services?

SEC Using MicroStrategy as Example of Auditor Independence Violations

This is not the first time that the alleged marriage between Vienna, Virginia based software developer MicroStrategy and the auditors and consultants at PricewaterhouseCoopers has been in the news.

Perform an Audit from your Desk

Deloitte & Touche and Intacct have announced the formation of an agreement to co-develop a web-based accounting service that will be available by subscription to accounting firms everywhere.

Largest Accounting Fraud EVER Lasted 17 Years!

This is one for Ripley's Believe it or Not!In 1983, Cosmo Corigliano joined a company called CUC International. He was 23 years old, and was previously employed at Ernst & Whinney (predecessor to Ernst & Young). He eventually became the company's CFO.

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