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PCAOB approves Auditing Standard No. 6 in response to FASB 154

The Public Company Accounting Oversight Board has voted to adopt Auditing Standard No. 6, Evaluating Consistency of Financial Statements, and an accompanying set of amendments to the Board's interim auditing standards. The Board adopted the standard and amendments in light of the Financial Accounting Standards Board's (FASB) issuance of Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, and impending issuance of Statement of Financial Accounting Standards, The Hierarchy of Generally Accepted Accounting Principles.

SEC reaches settlement with Monster's McKelvey for stock options backdating

The Securities and Exchange Commission has filed a settled enforcement action against Andrew J. McKelvey, the former Chief Executive Officer of Monster Worldwide, Inc., for his participation in a multi-year scheme to secretly backdate stock options granted to Monster officers, directors, and employees.The Commission's complaint alleges that, beginning in 1997, McKelvey and others backdated stock option grants to coincide with the dates of low closing prices for the Company's common stock, resulting in grants of in-the-money options to numerous individuals.

My life in crime: Chronicles of a forensic accountant

By William C. Barrett III, CPA/ABV, CVA, CTP, CCFMThe profession of forensic accounting is like any other industry niche: You evolve to a plateau where track record and honed skills permit you to hold yourself out as a professional. Then, like any other business, you starve a lot before you become an overnight sensation - in demand and truly at the top of your practice in providing value - both on scene and in the courtroom.

Center for Audit Quality issues SOX 404 alert

With the effective date of management's implementation of Sarbanes-Oxley Act Section 404(a) for non-accelerated filers (smaller public companies) fast approaching, the AICPA-affiliated Center for Audit Quality has issued an alert to provide information to auditors of those companies on items to consider during the upcoming audit season.Items to Consider Regarding Management's Report on Internal Control for Audits of Non-Accelerated FilersSome Center for Audit Quality member firms have raised questions regarding the auditor's role relative to management's report on its assessment
Community News

Deloitte agrees to $38 million settlement in Delphi case

The law firms representing the Lead Plaintiffs in the securities class action litigation involving Delphi Corp., the U.S.

Executives say poor internal controls contribute most to fraud

When corporate fraud occurs, it usually is an inside job made easier because the company had an insufficient prevention program, according to executives surveyed by the Big Four firm KPMG LLP.
Community News

PCAOB fines Deloitte $1 million

Deloitte & Touche has agreed to pay a $1 million penalty to settle accusations by the Public Company Accounting Oversight Board (PCAOB) that it allowed a partner who had performed poor audits in the past to conduct the 2003 audit of Ligand Pharmaceuticals, a public company based in San Diego. Under a provision of the Sarbanes-Oxley Act of 2002, the money will be used for accounting scholarships.The Deloitte partner, James L.

FAS 157: Auditors are ready to assign fair value to financial assets

When credit markets all but dried up as a result of the sub-prime mortgage crisis in the late summer, auditors of investment and commercial banks that elected to adopt Financial Accounting Standard 157, Fair Value Measurements, earlier than the effective date of November 15th were called upon to play a key role in determining the market value of mortgage-backed assets when few were being traded. Many of these banks had to report huge write-downs in the third quarter from declining assets values.

Auditing: Solving 10 problems implementing the NEW risk assessment standards

By Gary D. Zeune, CPAMuch has been written about the technical requirements of Statements on Auditing Standards No. 104-111, collectively called the Risk Assessment Standards (Risk Standards). So we'll focus on the 10 steps to effectively implement them.

PwC defends audits faulted by PCAOB

PricewaterhouseCoopers LLC (PwC), in an occasionally strongly worded letter addressed to the Public Company Accounting Oversight Board (PCAOB), defended the quality of the six audits found to have deficiencies in the PCAOB's Report on 2006 Inspection of PricewaterhouseCoopers LLC, released October 18th.

IT risks rising up audit committee agendas

Research by KPMG's Audit Committee Institute among over 1,300 audit committee members in 25 countries around the world has found that nearly a third (30 percent) are not satisfied that their committee spends sufficient time looking at IT risk issues, with a further 59 percent only "somewhat" satisfied.

PCAOB explains how auditors can apply AS No. 5

The Public Company Accounting Oversight Board has published for public comment staff guidance on auditing internal control over financial reporting in smaller public companies. The guidance explains how auditors can apply the Board's internal control auditing standard, Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, to audits of smaller, less complex public companies. When it adopted Auditing Standard No.

PCAOB approves rules for firms that do not regularly issue audit reports

The Public Company Accounting Oversight Board has approved amendments regarding the inspection frequency for firms that do not regularly issue audit reports. The Board adopted two amendments to PCAOB Rule 4003, which addresses the minimum frequency with which the Board will conduct inspections of different categories of registered public accounting firms. The amendments approved today would eliminate Rule 4003's requirement that the Board regularly inspect each registered public accounting firm that plays a "substantial role" in audits but does not issue audit reports.

SEC charges 69 auditing firms and partners with SOX violation

The Securities and Exchange Commission has issued 69 charges against various accounting firms and partners for violation of a provision of the Sarbanes-Oxley (SOX) Act that requires registration with the Public Company Accounting Oversight Board (PCAOB). Thirty-seven separate firms were involved in the action. No Big Four or major accounting firms were among those charged. This is the first time the SEC has issued such charges. The SEC indicated that 53 audit reports of public companies were issued by those firms and partners who has not registered as required by SOX.
Community News

Reznick Group to host free national webcast on new audit and accounting standards

Subject matter experts from the national CPA firm, Reznick Group, will host a national webcast on Wed., Oct. 3, 2007, from 2-4:30 pm ET to present a detailed outline of new audit standards and explain new accounting requirements for implementing and maintaining internal controls within an organization.

Dell promises to restate fudged accounts

Texas-based PC manufacturer Dell has been forced to restate accounts going back to 2003 due to accounting errors and irregularities identified by an internal investigation. The accounting errors and irregularities that will be corrected are significant because of the combination of the number of issues identified, the qualitative nature of many of the issues, and in some cases, the dollar amounts involved.The problems came to light in 2005, when the SEC's Division of Enforcement launched an investigation into the company's accounting and financial reporting practices.

SEC approves PCAOB Auditing Standard No. 5

The Securities and Exchange Commission has voted unanimously in favor of a new auditing standard and other measures to increase the accuracy of financial reports while reducing unnecessary costs, especially for smaller public companies.The Commission expects the new auditing standard, in combination with the Commission's new management guidance, will make Section 404 audits and management evaluations more risk-based and scalable to company size and complexity."In approving Auditing Standard No.

Cadmus award winner announced

In honor of his outstanding contributions to the internal audit profession, James Kaplan, CIA, was awarded by The Institute of Internal Auditors (IIA) with the prestigious Bradford Cadmus Memorial Award during The IIA's 2007 International Conference, held in Amsterdam this week. Initiated in 1965, the award is named after The IIA's first managing director and recognizes internal audit practitioners for research, academic involvement, article and book publication, and other thought-leading pursuits."I'm honored to recognize Mr.
Community News

Grant Thornton, PCAOB spar over inspection report

The PCAOB has released its inspection report on CPA firm Grant Thornton covering the period from May 2006 through January 2007. Audits of eight companies were examined. Several audit deficiencies are noted in the report, such as a failure to identify or appropriately address errors in the application of GAAP in the selected audits, including errors that seemed likely to be material to financial statements.
Community News

BDO Seidman snags guilty verdict

National CPA firm BDO Seidman LLP has been found grossly negligent by a Florida jury for failing to find fraud in an audit that resulted in costing a Portuguese Bank $170 million. The verdict opens up the opportunity for the bank to pursue punitive damages that could exceed $500 million.The audit in question was of a now-defunct financial services company, E.S. Bankest LLC, located in Miami, Florida. Two former executives of E.S.


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