PCAOB

Tax

Board Proposes Rules Concerning Independence, Tax Services, and Contingent Fees

The Public Company Accounting Oversight Board voted unanimously at its open meeting to propose for public comment certain ethics and independence rules concerning independence, tax services, and contingent fees.The Board’s proposed rules fall into three areas. First, the proposed rules would identify three circumstances in which the provision of tax services impairs an auditor's independence: Proposed Rule 3521 would treat registered public accounting firms as not independent of their audit clients if they enter into contingent fee arrangements with those clients.
A&A

SEC May Reject PCAOB's Budget

The Securities and Exchange Commission may not approve the budget of the accounting oversight board, which offers an average salary of $203,000 a year.The Public Company Accounting Oversight Board (PCAOB), which has requested $153 million, offers salary increases of 30 percent a year, according to a report by Bloomberg, which cited people familiar with the matter.The PCAOB, formed in 2002 in the aftermath of massive corporate scandals and bankruptcies, is funded by publicly traded companies.

Judge Upholds Sarbanes-Oxley In Scrushy Fraud Case

Arguments that the Sarbanes-Oxley corporate reform law is unconstitutionally vague did not convince a federal judge, who has rejected Richard Scrushy's claims in his HealthSouth fraud case.Attorneys for Scrushy, HealthSouth's former chief executive, said the law should not be part of the indictment accusing him of fraud, the Associated Press reported. U.S. District Judge Karon O.

SEC Grants Extension On Internal Controls Reporting

The U.S. Securities and Exchange Commission on Tuesday issued an exemptive order to grant certain accelerated filers up to an additional 45-days to include in their annual reports management’s report on internal control over financial reporting and the related auditor’s report on management’s assessment of internal control over financial reporting. Both internal control reports are required under Commission rules implementing Section 404 of the Sarbanes-Oxley Act of 2002.
Community News

Few Audit Committees Are Implementing Key Practices, According to Report

As audit committees struggle implementing the requirements of Sarbanes-Oxley, fewer than one-third implement a majority of practices that lead to higher ratings of the financial audit process, according to the J.D. Power and Associates 2004 Audit Committee Best Practices Report(SM) released this week. The report is a comprehensive, independent study of audit performance in the wake of the Sarbanes-Oxley Act of 2002, which established new compliance and procedural requirements for corporate financial accountability of public companies.

PCAOB Adopts Temporary Rule Relating to Auditing Standard No. 2

The Public Company Accounting Oversight Board on Tuesday adopted a temporary transitional rule relating to PCAOB Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements." Section 404 of the Sarbanes-Oxley Act of 2002 and the related implementing rules of the Securities and Exchange Commission require certain companies to include in their annual reports filed with the Commission a report on management’s assessment of the effectiveness of those companies’ internal control over financial reporting.

More Executives Saying 'No Thanks' to CFO Job

Some executives who long dreamt of seeing the title 'Chief Financial Officer' on their business cards are starting to wonder why they ever wanted the job in the first place. The CFO job, thanks to regulatory changes and a push for greater accountability in corporate America, has changed dramatically over the last few years. More scrutiny, more pressure, a huge workload and the stress that goes along with it are causing some professionals to leave the fancy title behind, the New York Times reported.E.
Technology

Increased Scrutiny of Internal Controls on the Rise

Awareness of the Sarbanes-Oxley Act of 2002 had surged in the not-for-profit industry over the past year. According to the second annual Grant Thornton Board Governance Survey for Not-for-Profit Organizations, 83 percent of survey respondents say they are “very” or “somewhat” familiar with the act, compared to 56 percent in the 2003.The survey, which includes responses from more than 700 not-for-profit entities, also found that these organizations are not only aware of the act, but many are also taking action because of it.

SOX 404 Trends for Next Year Beginning to Emerge

As public companies strive to meet compliance deadlines for Section 404 of the Sarbanes-Oxley Act, trends related to how companies will implement an efficient and effective process beyond the initial year of compliance are beginning to emerge, according to the results of a new survey released by Ernst & Young.

SOX Compliance Costs Average $16M Per Company

Survey of corporate boards released this week by RHR International and Directorship reveals annual Sarbanes-Oxley compliance costs average $16 million--a jump of 77 percent from last year. Findings of the first annual Directorship/RHR International Board Survey also reveal that nearly half (47 percent) of companies surveyed do not have a CEO successor in place, although 61 percent expect that CEO leadership transition will go smoothly, according to the poll of almost 270 board directors at U.S. companies.
Community News

PCAOB Releases Additional Guidance for Audits of Internal Control

The Public Company Accounting Oversight Board (PCAOB) this week released the third in a series of staff questions and answers to assist in the implementation of PCAOB Auditing Standard No. 2, regarding audits of public companies' internal control over financial reporting. The questions and answers, prepared by the PCAOB’s Office of the Chief Auditor, emphasize the flexibility provided by Auditing Standard No.
Tax

OSHA Orders Whistleblower Reinstated

Whistleblower David Windhauser, a controller for the Trane Corporation, must be reinstated and paid more than $105,000 in back wages, ruled the Department of Labor's Occupational Safety and Health Administration (OSHA). OSHA referred to the whistelblowing provisions of the Sarbanes-Oxley Act of 2002 when making its ruling that Windhauser's termination after he raised questions about the company's accounting practices to his supervisors, Business & Legal Reports (BLR.com) reported.Windhauser complained to OSHA's New York regional office after he was terminated. Patricia K.
Tax

PCAOB, Advisory Group Propose Audit, Tax Standards for 2005

The Public Company Accounting Oversight Board (PCAOB) on Wednesday sought the advice of its Standing Advisory Group on a series of topics for consideration as possible auditing and related professional practice standards during the group’s meeting in Washington, DC. “We appreciate the expertise of the members of the Standing Advisory Group as we plan the Board’s standards-setting agenda for 2005,” said PCAOB Chief Auditor Douglas R. Carmichael.
Tax

Senators Press for SEC Enforcement of Whistle-blower Law

Two senators are ratcheting up pressure on the Securities and Exchange Commission to enforce a tough whistle-blower law. With a government finding that a publicly traded company retaliated against a whistle-blower, Iowa Republican Charles Grassley and Vermont Democrat Patrick Leahy asked for “aggressive enforcement” in a letter last week to SEC Chairman William H. Donaldson, the Associated Press reported. Donaldson was also asked for details of the agency's enforcement plans.
Community News

PCAOB To Hold Forum On Small-Business Auditing

The Public Company Accounting Oversight Board (PCAOB) last week announced a new initiative to bring important information concerning the PCAOB to small business communities. The Forum on Auditing in the Small Business Environment is an invitation-only program for registered accounting firms and public companies in the small business community to learn more about the work of the Board, specifically the PCAOB inspections process and the impact of new auditing standards. The first forum will be held in Costa Mesa, California, on Tuesday, November 30, and Wednesday, December 1, 2004.
Community News

SOX Takes Toll on Industry Confidence, Client Ratings of Accounting Firm Performance

The stress of meeting the requirements for corporate financial accountability is taking a toll on confidence and client ratings within the accounting industry, according to the J.D. Power and Associates 2004 Audit Firm Performance Study(SM) released today. The study, which measures audit firm performance in the wake of the Sarbanes-Oxley Act of 2002, is based on interviews with 1,007 audit committee chairs and 944 chief financial officers. The study finds a significant amount of angst among audit committee chairs and CFOs in the industry.
Tax

McDonough Predicts Some Won't Meet Reporting Deadline

Companies need to be prepared for how they will tell investors about internal control weaknesses uncovered by ongoing reviews mandated by Sarbanes-Oxley, said William McDonough, chairman of the Public Company Accounting Oversight Board (PCAOB).Investors.com reported on a speech McDonough gave last week to the Securities Industry Association. The PCAOB was created by the Sarbanes-Oxley Act of 2002, passed to reform corporate governance in the wake of numerous accounting scandals.

PCAOB Announces Standing Advisory Group Meeting

The Public Company Accounting Oversight Board announced this week that it has scheduled a Standing Advisory Group meeting for November 17 and 18 to discuss potential future auditing and related professional practice standards, as well as a proposed standards-setting agenda for 2005. The group will meet on Wednesday, November 17, from 1:30 to 5:15 p.m., and on Thursday, November 18, from 8:30 a.m. to 3:30 p.m. The meeting will be held in the Phillips Collection Ballroom at the Radisson Barceló Hotel, 2121 P St, NW, Washington, DC.

DaimlerChrysler Hit with Whistleblower Suit, SEC Investigation

A whistleblower complaint has prompted a Securities and Exchange Commission investigation of DaimlerChrysler AG, over possible violations of federal anti-bribery laws, the Associated Press reported."The investigation follows the filing of a whistleblower complaint with the U.S. Department of Labor under the Sarbanes-Oxley Act by a former DaimlerChrysler employee whose employment was terminated earlier this year," the company said in its third-quarter earnings statement.

PCAOB Adopts 2005 Budget of $152M, Proposes Subpoena Rule

Approval of 2005 Budget - The Board approved a budget of approximately $152.8 million for calendar year 2005. The budget will allow the Board to continue to fulfill its statutory mandate under the Sarbanes-Oxley Act of 2002 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. The budget supports the continuation of an aggressive hiring effort in order to satisfy the PCAOB’s mandates under Title I of the Act.

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