All Accounting & Auditing articles – Page 100
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Blog
Former KPMG Partner Scott London out of prison, back to work
Scott London—the former KPMG partner who pleaded guilty to insider trading in June 2013 and was sentenced to serve 14 months in prison in April 2014—is out of prison and back to work. London is now employed as the assistant to the CFO of a computer company.
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ITT Complaint Shows Off-Balance-Sheet Woes Aren’t Off-Stage Yet
An SEC lawsuit against ITT Educational Services could shape up to be another textbook case of what goes wrong when companies try to deal with problematic accounting away from the eye of investors. The problem this time: off-balance sheet vehicles that masked ITT’s defaulting student loans. Where were the auditors? ...
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Improving EITF to Improve Accounting Practice
FASB’s Emerging Issues Task Force turns 30 this year, and with that comes its third 10-year review of how the EITF should consider new accounting issues. This week, columnist Robert Herz offers his thoughts on where the EITF can improve, including what issues it addresses and voting practices to make ...
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FASB Proposes Changes to Stock Compensation, Equity Method Rules
FASB is proposing updates to accounting standards that would target complexity in the accounting for stock compensation plans and the equity method of accounting. The board has proposed eight measures to revise requirements around income tax consequences, classification of cash flows, and more. In addition, FASB seeks to eliminate the ...
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Argument for Small-Company Compliance Exemptions
Image: Smaller public companies regularly lament that the costs of regulatory compliance are disproportionately large for them and serve little useful purpose for their investors. Sometimes those complaints aren’t worth more than a good eyeroll—but sometimes they have merit. This week, Editor Matt Kelly tells the tale of yet another ...
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SEC Settles Fraud Charges at Tech Firm
Computer Science Corp. has agreed to pay $190 million to settle charges by the Securities and Exchange Commission that the company and former executives concealed from investors problems with a high-profile client and manipulated financial results, in addition to fudging with accounting at overseas units.
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Audit Committees Get Fresh Tips on Evaluating Auditors
Image: The Audit Committee Collaboration, backed by seven groups with various missions around corporate governance and investor advocacy, has updated its External Auditor Assessment Tool, tips to help audit committees conduct their evaluation of external auditors. Cindy Fornelli, executive director of the Center for Audit Quality, says the tool “can ...
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Deloitte Inspection Report Shows Reduced Audit Deficiencies
PCAOB audit inspectors found fault with 21 percent of the audits inspected at Deloitte in 2014, lower than any rate delivered for any major firm since 2009 and lower than Deloitte’s failure rate from one year ago. The report also revealed a new format for PCAOB inspection reports. More inside.
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More Hints at More Audit Committee Disclosure
Image: The SEC plans a concept release “soon” that could modernize audit committee disclosures for the first time in years, including touchy subjects like naming the audit engagement partner. Expect awkward questions to follow about how audit firms are hired and perform the work they do. “This foreshadows what I ...
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PCAOB Considers Standard on Using Specialists’ Work
Image: The Public Company Accounting Oversight Board has issued a staff consultation paper looking for input on whether and how to revise standards around the auditor’s use of the work of specialists. PCAOB Chairman James Doty said, “We want our standards to keep pace with the realities in the marketplace, ...
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Errors Persist Into 2014 Year-End XBRL Filings
Image: With another round of annual reports mostly filed through the early part of 2015, experts are assessing the quality of XBRL filings—and seeing not much improvement. Scale errors continue to be the most common problem, says Alex Rapp, co-founder of Calcbench. “Unfortunately, many filers don’t appear to realize this ...
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Audit Relations Continue to Be Strained
Image: Tensions over the audit of internal controls over financial reporting were in focus at the Compliance Week 2015 conference last week, with many saying corporate audit committees will ultimately need to resolve the problem. “We hear the concerns, even frustrations, from company officials over the level of audit work ...
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Why Simplification Isn’t Simple
Simplicity in accounting is always a great idea, yet complexity always seems to be intruding into reality. This week, Compliance Week columnist Scott Taub tries to deconstruct why complexity endures, and why we may even see it creep into the ostensibly simplified new rule for revenue recognition. “Despite 10 years ...
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COSO Implementation Gets Gritty
Whether you adopted the new COSO framework for internal control last year or stalled into 2015, a chorus of voices say now is the time for implementation (or even polishing last year’s implementation) once and for all. “This year is the time to adopt,” says KPMG partner David Middendorf. Inside, ...
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Monitoring and Auditing Performance-Enhancing Risks
Every executive knows that what gets measured gets done; the trick for compliance and audit executives is to assure that the metrics you use don’t lead employees to do something reckless. This week, columnist Jose Tabuena looks at the risks of incentives: where they can go wrong, how to help ...
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FASB Proposes Simplification to M&A Accounting
The Financial Accounting Standards Board is proposing a change to the rules around how to adjust provisional amounts recorded at the time of a transaction to simplify the accounting for business combinations. FASB says stakeholders say current rules are costly and complicated and don’t significantly improve the information available to ...
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PCAOB to Audit Committees: Help Us Help You
Image: The PCAOB’s latest guidance to audit committees will help them understand how to push their audit firms to dig deeper into risk. It may also, however, nudge audit committees to undertake risk and audit oversight the PCAOB itself cannot do. “In places like China, the PCAOB cannot inspect, but ...
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Revenue Recognition Implementation Brings Big Challenges
Companies in the vanguard of implementing the new revenue recognition standard are finding it a daunting task requiring major planning and coordination. At the Compliance Week 2015 conference, Bavan Holloway, vice president of corporate audit at Boeing, said companies need to have a strong change management process in place. “It’s ...
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Compliance Leaders Like Three Lines of Defense
Image: At Compliance Week’s annual conference this week, Jose Tabuena, chief compliance officer for NextHealth, advocated for the three lines of defense model. “I’ve worked with the accounting firms and those working with the COSO framework, and I find three lines of defense easier to explain,” he said. “The board ...
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FASB Proposes Changes to Revenue Standard
FASB has issued proposed revisions to the revenue recognition standard intended to head off the potential for varied interpretation of the standard and to simplify and reduce the cost of compliance in some areas. The board has focused the amendments on identifying performance obligations and accounting for revenue arising from ...