PCAOB

Tax

Recruiting Accounting Grads for Enforcement

Accounting is a hot profession this year and not just in the private for-profit sector.

PCAOB Takes First Disciplinary Action

In its first disciplinary action, the Public Company Accounting Oversight Board (PCAOB) on Tuesday revoked the registration of a public accounting firm, barred the managing partner of the firm from association with any registered accounting firm and censured two former partners of the firm. New York accounting firm Goldstein and Morris CPAs, P.C. was notified in September 2004 that the firm would be inspected by the PCAOB in November 2004. The Board found that after managing partner Edward B. Morris and two partners Alan J. Goldberger and William A.

PCAOB & SEC Issue Internal Controls Auditing Guidance

The Public Company Accounting Oversight Board (PCAOB) issued additional guidance on the implementation of Auditing Standard No. 2 (AS No. 2) on Monday, May 16, 2005. The new guidance represents the PCAOB’s response to concerns raised during the Roundtable on Implementation of Internal Control Reporting Provisions held on April 13, 2005 and consists of both a Board Policy Statement and a series of staff questions and answers. Both focus on the scope of internal control audits and how much internal control testing is required.

PCAOB Cautions Against Over Auditing

At the same time the Public Company Accounting Oversight Board (PCAOB) is warning auditors not to overdo internal controls testing, the government is revamping portions of the law that required the testing in the first place.PCAOB Chairman William McDonough told auditors to expect a “severe conversation” if the board thinks they are gouging clients to run up fees, CFO.com reported.McDonough's comments came as part of a roundtable discussion held by the Securities and Exchange Commission.

Accounting Oversight Boards Proposes Flexible Reporting Option

The Public Company Accounting Oversight Board (PCAOB) voted unanimously on Thursday to propose a measure to give corporations and auditors flexibility in reporting when material weaknesses in their internal financial control have been corrected. The PCAOB will vote again at the conclusion of a 45-day comment period.

Accounting Oversight Board to Meet Today on Internal Controls

The Public Company Accounting Oversight Board (PCAOB) is scheduled to meet at 10 AM Eastern Standard Time to consider an auditing standard for reporting on companies that correct material weaknesses in internal controls over financial reporting.Section 404 of the Sarbanes-OxleyAct of 2002 Requires auditors to report on companies’ internal control over financial reporting.

CalPERS to Adopt PCAOB Audit Independence Proposal

The CalPERS Board adopted a three-pronged plan to advocate majority vote election procedures for corporate directors. Currently, a plurality vote system is used in most corporate elections, in which directors can be elected by the vote of a single share unless they are opposed by a dissident candidate. "Majority vote will give shareowners the power to hold directors accountable for their actions and their performance, and elect the best person for the job," said Rob Feckner, CalPERS Board President.

SEC Announces Members of Advisory Committee on Small Public Cos

Securities and Exchange Commission (SEC) Chairman William H. Donaldson this week announced the appointment of 19 additional members of the SEC Advisory Committee on Smaller Public Companies. The additional appointments bring the total number of members of the advisory committee to 21. Chairman Donaldson previously had announced the appointment of Herbert S. Wander, a prominent Chicago securities lawyer, and James C. Thyen, President and CEO of Kimball International, Inc., as Co-Chairs of the advisory committee.

SEC Approves PCAOB's $137 Million 2005 Budget

The Public Company Accounting Oversight Board's (PCAOB) 2005 budget grew from $103 million in 2004 to $137 million when the Securities and Exchange Commission unanimously approved the budget Thursday.The PCAOB, created by the 2002 Sarbanes-Oxley Act to police and discipline public company accountants, is a private, nonprofit agency that relies mostly on public company fees for support.
Community News

PCAOB Announces Leaders of Chicago, Denver Offices

The Chicago office is led by Deputy Director of Inspections, Greg Wilson. Mr. Wilson retired in December 2003 as an audit partner from Ernst & Young. He began his auditing career in 1969, specializing in the audits of publicly held retail, consumer and industrial products clients. He also served in various management and administrative positions including Director of the Chicago office audit practice and Regional Director of Human Resources. Mr. Wilson, a CPA, graduated from the University of Illinois with a Bachelor of Science degree in Accountancy.
Tax

AICPA to Comment on PCAOB Proposal on Auditor Independence, Tax Services

The AICPA’s reaction was generally favorable to the rule proposed by the Public Company Accounting Oversight Board concerning tax services that can be offered to public company audit clients, but the Institute will submit a comment letter. Four circumstances are identified in the proposal that would be considered as impairing an auditor’s independence.

SEC Announces Roundtable on Internal Control Reporting Requirements

The Securities and Exchange Commission announced today that it will host a roundtable discussion this spring regarding registrants’ and accounting firms’ experiences implementing the new reporting requirements under Section 404 of the Sarbanes-Oxley Act of 2002. The roundtable, which will include representatives of the Public Company Accounting Oversight Board (PCAOB), issuers, auditors, investors and other interested parties, is tentatively scheduled for April 2005.

Rein in the Public Company Accounting Oversight Board: Guest Article

By Peter J. Wallison, resident fellow at the American Enterprise Institute - The Public Company Accounting Oversight Board is a not-for-profit corporation established by the Sarbanes-Oxley Act to regulate the business of auditing public companies. Although industry self-regulatory organizations are not unusual, this one has the extraordinary power to tax all public companies to support its operations. Its freedom from the ordinary mechanisms of accountability for quasi-governmental functions is already having an effect, shown in its rapidly growing budget.

PCAOB Standards, Related Rules Reference Guide Offered by AICPA

The PCAOB Professional Standards and Related Rules (including SEC-Approved Releases and PCAOB Staff Q&A Guidance) has been developed by the AICPA to supply auditors with a workable, current, and comprehensive source of PCAOB standards for their engagements. This compilation delivers – Professional standards and staff guidance – including standards on auditing, attest, quality control, ethics, and independence. PCAOB Auditing Standard Nos. 1, 2, and 3, and all of the conforming amendments related to PCAOB Auditing Standard No.

Disclosures of Control Weaknesses Way Up from 2003

Fifty-six companies reported material weaknesses or significant deficiencies in internal controls last month, compared with 14 companies one year earlier, according to Compliance Week.A total of 582 companies made these kinds of disclosures in 2004, the newsletter reported, with about half of them related to financial systems and procedures, such as problems with the financial close process, account reconciliation or inventory processes. Personnel issues accounted for about 30 percent of the disclosures.

European Companies Grappling with SOX Compliance

Some European companies are wondering if the benefits of being listed on U.S. exchanges is worth the cost of Sarbanes-Oxley compliance, IT-Analysis.com reported.With public and private companies alike struggling to comply with the rigid new requirements intended to improve transparency and accountability, international companies are weighing the pros and cons. Companies with 300 or more U.S.
Tax

PCAOB Slashes 2005 Budget, Reports Recruitment Shortfall

The Public Company Accounting Oversight Board last week approved a revised budget for calendar year 2005 reducing the Board’s 2005 accounting support fee from $152.5 million to $136.1 million.
A&A

FEI Outlines Top Financial Reporting Challenges for 2005

Financial Executives International has identified the top 10 financial reporting challenges for 2005. These challenges will impact the way companies manage their businesses, report their financial results, and compensate their employees. The challenges include:Stock option expensing. The Financial Accounting Standards Board (FASB) has mandated that all stock compensation be expensed beginning June 30, 2005 for most public companies. Smaller public companies and private firms have until the first annual reporting period after Dec.
Community News

SEC Creates Committee to Examine SOX Impact on Small Public Companies

Securities and Exchange Commission Chairman William H. Donaldson announced on Friday the establishment of an advisory committee to assist the Commission in examining the impact of the Sarbanes-Oxley Act and other aspects of the federal securities laws on smaller public companies. Appearing at a press conference today with the two individuals named as Co-Chairs of the committee, Chairman Donaldson stated, "The Sarbanes-Oxley Act has already been of enormous benefit to America's investors and markets and will spur further improvements.
Tax

SEC’s Nicolaisen Welcomes PCAOB Involvement in Independence Standards-Setting

In response to the Public Company Accounting Oversight Board (PCAOB) action earlier this week, proposing certain ethics and independence rules for public comment, the Commission’s Chief Accountant, Donald T. Nicolaisen, noted that he welcomed PCAOB involvement in this important area. The PCAOB’s proposed rules grew out of its public roundtable on auditor independence held in July, and address issues relating to tax services and contingent fees.

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