Auditing

A&A

FIN 48 from different perspectives

Financial Accounting Standards Board Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, is intended to substantially reduce uncertainty in accounting for income taxes. Its implementation and infrastructure requirements, however, generate a great deal of uncertainty. This feature provides an overview of FIN 48, addresses some of its federal and international tax issues, as well as issues arising at the state and local level.
Community News

Will FIN 48 bring more state audits?

FASB Interpretation (FIN 48), Accounting for Uncertainty in Income Taxes, is intended to make tax treatment more consistent between companies by establishing recognition thresholds and measurement guidelines for tax positions on federal income tax returns and setting up new guidelines for income tax reserves.

IIA reports increase in internal auditors

The Institute of Internal Auditors credits corporate scandals, Sarbanes-Oxley legislation, and a renewed focus on protecting stakeholder interests as the driving forces behind the growth of the internal audit profession.As a result, a record number of internal auditor jobs have opened to an enhanced perception of the position as well as higher salaries.IIA reported common misconceptions of what internal auditors do include negative stereotypes, such as "the gotcha-guys," "the financial police," and "the IRS," when in actuality, internal auditors are business generalists who specialize in

PCAOB Issues Year 2 Auditor Standard Implementation Report

The Public Company Accounting Oversight Board issued a report on the second year implementation of its Auditing Standard No. 2, An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements ("AS No. 2"). The report is based on PCAOB inspections that looked at portions of approximately 275 audits of internal control over financial reporting (ICFR) by registered public accounting firms. In May 2006, PCAOB announced that during 2006 it would conduct inspections to determine whether auditors were achieving the objectives of AS No.
Tax

IRS Spending More Hours on Non-Revenue Corporate Audits

IRS revenue agents are now spending substantially more of their time on corporate audits that produce no revenue for the government than they did in the recent past, according to agency data obtained under the Freedom of Information Act by the Transactional Records Access Clearinghouse (TRAC).

6 Tips for Superior Due Diligence

The key to effective due diligence is to look beyond the numbers, and focus on the people and other forces that drive value. Crowe Chizek and Company LLC’s thought leaders have developed six tips for successful acquisitions. They include: 1. Account for Human CapitalMergers and acquisitions fail most often because companies overlook the importance of managing human capital. To ensure the buyer retains the management talent needed, the buyer must communicate future roles early and often with both companies’ employees during the due diligence process.2.

Audit Standards on PCAOB Open Meeting Agenda

The Public Company Accounting Oversight Board (PCAOB) said it will consider proposing an auditing standard, Evaluating Consistency of Financial Statements, and related amendments to the board's interim standards regarding the auditor's responsibilities to evaluate and report on matters relating to the consistency of the financial statements.

Top 100 Accounting & Governance Companies

Audit Integrity has made public its report of the best accounting and governance companies in the United States. The companies' Accounting & Governance Risk (AGR) rating is a direct and comprehensive measure of corporate integrity. Scores range from 0 (lowest) to 100 (highest).
Technology

SEC Will Not Require XBRL Data Audits

Securities and Exchange Commission Chairman Christopher Cox announced that companies adopting eXtensible Business Reporting Language (XBRL) for regulatory filings will not need an additional audit of the conversion of their data, reported Reuters. As part of an XBRL roundtable discussion Monday, Cox said requiring an audit on converted financial data could result in "crib death" for the XBRL project.Currently, only about two dozen companies, including Comcast Corp. and General Electrics Co., are participating in the SEC's voluntary XBRL pilot program.

PCAOB Chair, EU Commissioner Discuss Audit Firm Oversight

PCAOB Chairman Mark Olson and EU Commissioner Charlie McCreevy met to discuss steps to enhance cooperation between the PCAOB and European auditor oversight bodies and advance collaborative efforts in 2007. Chairman Olson and Commissioner McCreevy agreed to launch roadmap discussions on cooperation between the PCAOB and EU regulators. They have mandated their staff to commence work and will review progress at their next meeting. The goal is to enable the PCAOB and EU auditor regulators that have independent and rigorous oversight systems to move toward full reliance by 2009.

AICPA Invites Int'l Auditor Independence Comments

The International Federation of Accountants (IFAC) is proposing changes in international auditor independence standards that could significantly impact U.S. CPAs.As an IFAC member, the AICPA routinely comments on the organization’s proposals and determines whether to revise its own Code of Professional Conduct to harmonize with international standards. IFAC’s exposure draft, issued on Dec. 29, 2006, contains auditor independence standards more restrictive than those of the AICPA.

Two Federal Budget Deficit Estimates; Two Accounting Methods

According to the Financial Report of the United States Government for the year ending September 30, 2006, which was released by the Treasury Department (DoT) on Friday, the federal budget deficit totaled $449.5 billion, nearly 81 percent higher than the $247.7 billion in the President’s annual budget report published two months ago.

Revised ALLL Policy Gets Nod From PCAOB

The Public Company Accounting Oversight Board (PCAOB) gave its blessing to the latest Policy Statement on the Allowance for Loan and Lease Losses (ALLL), issued this week.The interagency policy statement on ALLL, developed by federal banking and credit union regulators, updates the 1993 statement and outlines expectations for banks and examiners in regards to the development and assessment of the ALLL estimate.“The policy statement outlines enhanced guidance on the sound management practices that are expected to be employed in the development of the allowance for loan and lease losses
Community News

KPMG Plans Counter Suit of Fannie Mae

KPMG fired back at former audit client Fannie Mae this week, saying it would counter the mortgage giant’s $2 billion negligence and breach of contract lawsuit.KPMG “will pursue our own claims against Fannie Mae” in the U.S. District Court in Washington, D.C., spokesman Tom Fitzgerald told reporters Tuesday. Fannie Mae filed its lawsuit Tuesday in the Superior Court of the District of Columbia.Fitzgerald said the issues raised in Fannie Mae's lawsuit “are already pending" in shareholder lawsuits before the federal district court.
Community News

Grant Thornton to Fight Claim of “Reckless” Audit

Grant Thornton LLP said it will challenge recent Treasury Department (DoT) findings and penalties stemming from the firm’s audit of a bank that collapsed in 1999.The Office of the Comptroller of the Currency, the Treasury agency that regulates nationally chartered banks, on Friday announced the telling $300,000 fine against the Chicago-based CPA firm that audited First National Bank of Keystone in 1998.
A&A

SEC and PCAOB Still Working on Sarbanes-Oxley Changes

Christopher Cox, the Securities and Exchange Commission (SEC) Chairman, said Monday that regulators were still working on revisions to its rule requiring companies to adopt internal controls and procedures for financial reporting but said he was “confident” that the result would “improve the reliability of public company financial statements and better protect investors,” the Washington Post reports. The SEC will issue its proposed revision on December 13.
Tax

Largest Accounting Firms See Coming Revolution in Business Reporting

As part of the Global Public Policy Symposium in Paris, held on November 8 and attended by key players concerned with ensuring the quality and reliability of financial reporting worldwide, the Chief Executive Officers (CEOs) of PricewaterhouseCoopers (PwC) International, Grant Thornton International, Deloitte, KPMG International and Ernst & Young, published a joint statement of their vision of what the future might hold for financial reporting and the accounting profession.
Community News

Firms Conduct School District Management, Accounting & Audits

Accounting firms are in the business of providing services to firms and organizations, even school districts, apparently. The Flint [Michigan] Journal reports that the firm Plante & Moran has signed a contract to perform the functions of their departed chief financial officer (CFO) until June 30, 2007, or until a new CFO is selected by the district. By the terms of the contract, Plante & Moran receive $14,000 a month, the salary and benefits for its former CFO, according to district officials.

Government Agencies In Compliance for 2nd Consecutive Year

The Office of Management and Budget (OMB) reports that for fiscal 2006, eighteen of 24 agencies received clean audits.
A&A

SEC, PCAOB Chairmen Differ Over SOX 404 Changes

Securities and Exchange Commission (SEC) Chairman Christopher Cox and the Public Accounting Oversight Board’s (PCAOB) Chairman Mark Olson were reported to be planning to meet, possibly as early as Sunday, to discuss differences in their approaches to revising Section 404 of the Sarbanes-Oxley Act (SOX), Reuters reports. Early in November the PCAOB sent a draft audit revision to the SEC that did not win SEC approval because it did not meet the concerns of small businesses, unnamed sources told Reuters.

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