Study: Accelerating the disclosure of corporate audit fees would be a boon for investors
A new study, Auditing: A Journal of Practice & Theory, published by the American Accounting Association, calls into question the delay that currently prevails in the disclosure of fees that firms agree to pay auditors. “Company-specific opacity is greater than perhaps necessary as a result of [this] timing … . Accelerating the mandated corporate disclosure of the audit fee could provide useful information to investors, reducing the severity of negative market reactions when companies announce bad news,” according to the study.
Accountants increasingly use data analysis to catch fraud
When a team of forensic accountants began sifting through refunds issued by a national call center, something didn’t add up: There were too many fours in the data. And it was up to the accountants to figure out why. With employee fraud costing the country an estimated $300 billion a year, auditors and forensic accountants are increasingly wielding mathematical weapons to catch the cheats, wrote Jo Craven McGinty of the Wall Street Journal.
SEC sanctions eight audit firms for violating auditor independence rules
The US Securities and Exchange Commission (SEC) on Monday sanctioned eight firms – BKD LLP, Boros & Farrington Accountancy Corp., Brace & Associates PLLC, Robert Cooper & Co. CPA PC, Lally & Co. LLC, Lerner & Sipkin CPAs LLP, OUM & Co. LLP, and Joseph Yafeh CPA Inc. – for violating auditor independence rules when they prepared the financial statements of brokerage firms that were their audit clients.
PCAOB announces settled disciplinary orders against seven audit firms for independence violations when auditing broker-dealers
The Public Company Accounting Oversight Board (PCAOB) on Monday settled disciplinary orders against seven audit firms – Alexander Thompson Arnold PLLC, Dean Dorton Allen Ford PLLC, Goldman & Co. CPAs PC, Lederman Zeidler Gray & Co. CPAs LLP, Leonard Rosen & Co. PC, Raines and Fischer LLP, and Raphael and Raphael LLP – for violating rules requiring that the auditors of brokers and dealers be independent of their audit clients.
Accounting watchdog warns retailers after Tesco scandal
British retailers must provide clear information to investors about their income from suppliers, the country's accounting watchdog, the Financial Reporting Council, said on Monday as it investigates a bookkeeping scandal at leading supermarket Tesco, wrote Huw Jones of Reuters. The watchdog said it would focus on this area when it comes to reviewing audits for 2014 that will be published next year.
IRS technical guidance roundup (week of Dec. 1)
The IRS issued the following technical guidance last week:
Announcement 2014-34 addresses the transfer of certain technical responsibility for issues involving exempt organizations, qualified retirement plans, and individual retirement annuities and accounts (IRAs) to the Office of Chief Counsel that will occur with the realignment of the Tax Exempt and Government Entities Division (TE/GE). As a result of the realignment occurring at the beginning of 2015, the technical responsibility for preparing revenue rulings, revenue procedures, and certain other forms of published guidance, as well as issuing technical advice and certain letter rulings, will shift from TE/GE to the Office of Associate Chief Counsel. The annual revenue procedures addressing these matters will be updated in January 2015 to reflect this realignment.
Revenue Ruling 2014-29 provides the interest rates for the first calendar quarter of 2015 (beginning Jan. 1), a draft press release, and the early drop instructions for this ruling.
Announcement 2014-38 provides guidance with respect to jurisdictions that are treated as if they had a FATCA intergovernmental agreement (IGA) in effect pursuant to Announcement 2014-17, 2014-18 I.R.B. 1001, but that do not sign the IGA before Dec. 31, 2014. Announcement 2014-38 provides that a jurisdiction that is treated as if it had an IGA in effect, but that has not yet signed an IGA, retains such status beyond Dec. 31, 2014, provided that the jurisdiction demonstrates firm resolve to sign the IGA as soon as possible. After Dec. 31, 2014, Treasury will review the list of jurisdictions having an agreement in substance on a monthly basis to assess whether it continues to be appropriate to treat such a jurisdiction as if it had an IGA in effect or whether a jurisdiction should be removed from the list.
Whistleblower alleges Vanguard cheated on taxes, costing taxpayers more than $1 billion
David Danon, a former tax attorney at Vanguard Group, alleges that the fund company illegally manipulated transfer pricing to keep costs – and taxes – artificially low, costing taxpayers more than $1 billion, wrote Forbes contributor Kelly Phillips Erb on Sunday.
Dems push for healthcare tax break
Senate Democrats are pushing to extend a healthcare tax break for laid-off workers into the upcoming House spending bill, arguing “this is an issue that cannot wait,” Bernie Becker of The Hill wrote on Saturday. The healthcare credit expired at the end of 2013, but was one of just a handful of lapsed incentives that the House didn’t restore for this year in the bill it passed last Wednesday.
More tax headaches on the horizon for GOP
Becker also wrote for The Hill on Saturday that Republicans on the House Ways and Means Committee acknowledged that they’re far from excited to have to deal with a raft of expired tax breaks again next year because it could distract from the panel’s broader goal of overhauling the tax code.
CPA.com study takes pulse of CPA of the future
Nearly four out of five CPAs in public accounting believe they will play a key role in preparing clients for complex challenges in the coming decade, but recognize they must understand and embrace emerging innovations to do so, according to research commissioned by CPA.com. Eighty percent of study participants agree that their role will change substantially over the next decade, with more emphasis on consultative business development, risk management, and advisory services, according to the CPA of the Future Study, released on Monday.
KPMG: M&A reemerges as a leading growth strategy among US organizations
According to a new survey by KPMG LLP, merger and acquisition (M&A) activity is reemerging as a leading growth strategy among U.S. organizations for 2015. Of the 738 M&A professionals, investors, and advisors who participated in the survey, 82 percent anticipate that their US companies or clients will initiate at least one acquisition in 2015, compared with 63 percent in 2014.
Survey: Small business owners most optimistic since 2008
According to the latest Wells Fargo/Gallup Small Business Index, which was released on Dec. 4, small business owners are the most optimistic they have been in more than six years, and business owners are feeling the most upbeat about the year ahead since the start of the recession. The overall index score increased significantly to positive 58 in November, up from a positive 49 in July 2014 and up 34 points from a year ago. While below pre-recession levels, the score is the highest it has been since January 2008 when it was positive 83.
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.