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PCAOB Chair Warns of CEO Pay Controls

Lavish compensation packages for top executives may be a thing of the past, as the head of the new accounting watchdog group warned business leaders that government may intervene if pay doesn’t come down."If the anger of the American people continues and business leaders do not wake up soon, I predict that there will be legislation," William McDonough, chairman of the Public Company Accounting Oversight Board (PCAOB), said Tuesday.McDonough told a gathering at the Economic Club of Chicago that a company's compensation committee should review the appropriate level of CEO pay, Reuters re

Section 404 Could Cost Big Companies $4.6 Million or More

Total costs of first-year compliance with Section 404 of the Sarbanes-Oxley Act could exceed $4.6 million for each of the largest U.S. companies, according to a survey of 321 companies by Financial Executives International (FEI). The added costs are driven by a projected investment of 35,000 hours of internal manpower, $1.3 million in spending on external consulting and software, and additional audit fees of $1.5 million (a jump of 35 percent). FEI is the leading professional organization serving chief financial officers (CFOs) and other senior financial executives.
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AICPA Launches Center For Public Company Audit Firms

The SEC Practice Section is now The Center for Public Company Audit Firms.  As a voluntary membership center, it will support member firms that audit or are interested in auditing public companies with education, communication, representation and other means. Members can use the Center as a resource and sounding board for interpreting requirements and instituting required changes from the PCAOB.

Board Adopts First Auditing Standard, Technical Amendments

The Public Company Accounting Oversight Board voted unanimously at an open meeting recently to adopt its first auditing standard and technical amendments to its interim standards rules. The Board adopted Auditing Standard No. 1, References in Auditors' Reports to the Standards of the Public Company Accounting Oversight Board, which requires that auditors' reports on engagements conducted in accordance with the Board's standards include a reference that the engagement was performed in accordance with the standards of the PCAOB.
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Board Adopts Rules For Non-U.S. Firms, July 2004 Deadline

On Tuesday, The Public Company Accounting Oversight Board voted unanimously to propose for public comment rules relating to the inspection and investigation of non-U.S. public accounting firms. The Board also voted unanimously to propose extending the registration for non-U.S. firms by 90 days to July 19, 2004. Section 106(a) of the Sarbanes-Oxley Act of 2002 provides that any non-U.S. public accounting firm that prepares or furnishes an audit report with respect to any U.S.
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Board To Consider Rules Related to Oversight of Non-U.S. Accounting Firms

The Public Company Accounting Oversight Board has scheduled an open meeting for 2 p.m. Tuesday, December 9, to consider whether to propose and seek comment on rules related to inspections and investigations of non-U.S. public accounting firms that register with the Board. The meeting will be held in the Chandelier Room at the St. Regis Hotel, 923 16th St., N.W., in Washington, DC.
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Business Readies For Sarbanes-Oxley Compliance

A survey of nearly 400 tax executives regarding compliance with section 404 of the Sarbanes-Oxley Act revealed that 89 percent have begun planning or implementing processes and controls for their company's compliance with this federal law. Conducted by Tax Executives Institute (TEI) as part of its 58th Annual Conference, the October 20 audience survey also showed that a full 85 percent of the respondents had not allocated any additional budget or resources toward that initiative.

California Tax Cheats Urged to Fix Returns or Pay Penalties

About 7,500 Californians who may have used illegal tax shelters will soon receive letters from the Franchise Tax Board, urging them to fix their state tax returns or face new penalties."During these difficult financial times, when we are making tough choices, everyone needs to play by the rules,” board chair and state Controller Steve Westly said Wednesday.The board now has more enforcement tools to curb the use of abusive tax shelters. Legislation signed in October created seven new and greatly increased penalties for investing in illegal tax shelters.

Audit Fees Go Uncollected by The PCAOB

According to Reuters, William McDonough, chairman of The Public Company Accounting Oversight Board, told reporters at The Economic Club of Washington’s Winter Luncheon Meeting on Wednesday that hundreds of public companies still owe the Board dues. "Those companies that have not paid cannot get a clean opinion from their auditor," said McDonough.

Board Approves PCAOB's 2004 Budget

The Public Company Accounting Oversight Board today approved a budget of $103 million for the 2004 fiscal year, reflecting planned investments in information technology to support the Board's registration, annual reporting, inspections, and enforcement programs, in addition to a more than two-fold increase in personnel. The Board's budget supports its mission to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.

PCAOB Vows to Look For Abusive Tax Shelters

The new accounting regulatory board plans to take a hard look at abusive tax shelters and a “very heavy-handed” approach with the firms that sell them.William McDonough, head of the Public Company Accounting Oversight Board (PCAOB), said in Senate testimony last week that policing tax shelters was not Congress' motive in establishing the PCAOB in the 2002 Sarbanes-Oxley Act. However, he said PCAOB staffers will look for evidence that firms have marketed abusive tax shelters during their annual inspections of major accounting firms.
Community News

'Tough Love' Approach Sought For Accounting Firms That Don’t Reform

Accounting firms should “save themselves” to restore confidence in the industry, but those that don’t clean up their practices will face tough penalties, said the head of the new accounting oversight board. William McDonough, the former Federal Reserve official who heads the Public Company Accounting Oversight Board (PCAOB), said that as a result of a wave of corporate scandals, the public “lost faith in the ability of the accounting industry to govern themselves. They should wish to rise to a new level of virtue.

PCAOB Considering Two Auditing Standards

The Public Company Accounting Oversight Board has scheduled an open meeting for 10 a.m. Wednesday, November, 12, in the Potomac Room at the St. Regis Hotel, 923 16th St., N.W., in Washington, DC. The Board is scheduled to consider whether to propose and seek comment on: A new auditing standard, and an amendment to an interim auditing standard, relating to audit documentation.

PCAOB Solicits Nominations For Advisory Group

The Public Company Accounting Oversight Board is now soliciting nominations for members of a standing advisory group that will assist the Board in carrying out its standards-setting responsibilities for auditing.The advisory group will consist of approximately 25 members with expertise in a variety of fields, including accounting, auditing, corporate finance and corporate governance, and investing in public companies.Members will be selected by the Board based on nominations, including self-nominations, received from any person or organization.

IBM Offers New Services to Help Companies Meet Federal Deadlines

Only one in 10 CFOs and financial executives surveyed by IBM Consulting Services believe their company’s internal controls comply with Section 404 of the Sarbanes-Oxley Act today — despite a compliance deadline only eight months away.The survey results, announced Wednesday, revealed that top executives from some of the largest U.S.

IFAC & International Regulators Propose Reforms to Strengthen Audit Quality

The international accountancy profession, together with international regulators, are spearheading reforms to improve the quality of standards and practices in auditing and assurance worldwide and to achieve global convergence of high quality standards. Their focus is on strengthening the international auditing and assurance standards process to bolster public confidence in the work of auditors and in the financial reporting process.

PCAOB Releases Parameters of Non-U.S. Accounting Firms

The Public Company Accounting Oversight Board today released a briefing paper that describes the broad parameters of the Board’s approach to the oversight of non-U.S. accounting firms.The briefing paper describes the Board’s plans for oversight of non-U.S. registered public accounting firms, based on cooperation with appropriate non-U.S. auditor oversight authorities.
Community News

Charles Niemeier Reappointed to PCAOB

The Securities and Exchange Commission announced earlier this week the reappointment of Charles D. Niemeier to the Public Company Accounting Oversight Board (PCAOB). The Commission unanimously selected Niemeier to serve a five-year term as a PCAOB board member upon the completion of his current one-year appointment this month.SEC Chairman William H. Donaldson said, "I am pleased that the Commission has acted to reappoint PCAOB Board Member Charles Niemeier.

Tax Shelters Once Again Under Scrutiny by Senate, PCAOB

A KPMG senior manager testified at a Senate Finance Committee hearing on Tuesday that his refusal to sign off on an audit client’s questionable tax transactions hurt his career at the Big Four firm. Michael Hamersley, a five-year KPMG employee, filed suit against the company in June and the case is pending.
Community News

PCAOB Final Registration: Pool of Public Audit Firms Shrinks by 45%

The Public Company Accounting Oversight Board has reviewed and approved registration applications from 598 public accounting firms to provide audit services to public companies.


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