All articles by Tammy Whitehouse – Page 43
-
Blog
PCAOB Admonishes BDO USA for Quality Control Lapses
The PCAOB has republished BDO USA’s 2011 and 2012 inspection reports to criticize the firm’s inadequate response to inspection findings in those years around audit quality control problems. The inspectors found too many cases where auditors accepted management representations without appropriately considering contradictory evidence, contributing to many of the audit ...
-
Blog
SEC Mulls Audit Committee Mandates as Voluntary Disclosures Grow
As the SEC considers the potential for new disclosure requirements for audit committees, audit committees themselves are volunteering more, according to recent analysis by the Center for Audit Quality and Audit Analytics. The analysis revealed one-fourth of companies in the S&P 500 enhanced their discussion around the audit committee’s appointment ...
-
Blog
AICPA Begins Floating Revenue Recognition Drafts
Image: The American Institute of Certified Public Accountants has assembled 16 industry task forces to examine industry-specific implementation questions that are emerging as companies prepare to adopt the new principles-based revenue recognition standard. The working drafts provide insight and examples around nine specific questions, says Kim Kushmerick, senior technical ...
-
Article
Consequences for Cloud Computing Accounting Start to Roll In
Image: Companies applying new guidance on accounting for cloud computing fees are finding the guidance is not so simple, and doesn’t always provide a sunny outcome on the financial statement, either. Prepare for detailed reviews of your contract, and possibly changes to key metrics and disclosures. “If someone thinks this ...
-
Blog
FASB Plans to Drop Step 2 of Goodwill Impairment Test
Image: FASB plans to drop the second step in the current two-part test to determine goodwill impairment, a nod to public companies eager for a simpler approach to deciding writedowns. Greg Franceschi, managing director at valuation firm Duff & Phelps, says, “By removing the second step of the test when ...
-
Blog
SEC Expects Year-End Disclosures on Revenue Rule Plans
Image: SEC Chief Accountant Jim Schnurr has advised audit committees to get involved in overseeing implementation of the new revenue standard, which takes effect in 2018. Schnurr said that should include disclosures about how the standard will affect financial statements. “We expect the level of these disclosures to increase and ...
-
Blog
SEC Expects Year-End Disclosures on Revenue Rule Plans
Image: SEC Chief Accountant Jim Schnurr has advised audit committees to get involved in overseeing implementation of the new revenue standard, which takes effect in 2018. Schnurr said that should include disclosures about how the standard will affect financial statements. “We expect the level of these disclosures to increase and ...
-
Blog
Companies Lag in Assessing New Revenue Rules, Survey Shows
Image: A recent survey of 335 finance executives by PwC and Financial Executives Research Foundation found that 27 percent of executives said their companies had not yet started an initial impact assessment of the new revenue standard as of summer 2015, and 48 percent had started but not completed it ...
-
Article
How to Worry About M&A Accounting in This Year’s Audit
Image: Merger activity is booming this year. That means plenty of scrutiny from audit firms in the coming year-end audit, since the firms themselves are under PCAOB pressure to be more skeptical of fair value, provisional figures in financial statements, and the like—all crucial to accounting for M&A deals. “Audit ...
-
Blog
IASB Sets 2019 Effective Date for Lease Accounting Standard
The International Accounting Standards Board says its updated lease accounting standard will take effect on Jan. 1, 2019, for companies following International Financial Reporting Standards. FASB is expected to issue its lease accounting standard by year’s end. The boards concur on how to define a lease and how leased assets ...
-
Blog
PCAOB Issues Crowe Horwath Inspection Report
Image: The PCAOB found fault with five of 14 audits inspected at Crowe Horwath in 2014, a slight improvement for the firm over its 2013 results. The board’s 2014 inspection report revealed an audit deficiency rate of 36 percent, compared with 38 percent in 2013 and 50 percent in 2012. ...
-
Article
Hosting a Related-Party Transaction About to Get Much Harder
Image: Companies preparing year-end financial disclosures, beware: Auditors will be poring over related-party transactions to make sure those parties don’t get too wild. The new Audit Standard 18 pushed auditors to be more skeptical about transactions, so expect them to push you (and your audit committee) to be more diligent ...
-
Article
Hosting a Related-Party Transaction About to Get Much Harder
Image: Companies preparing year-end financial disclosures, beware: Auditors will be poring over related-party transactions to make sure those parties don’t get too wild. The new Audit Standard 18 pushed auditors to be more skeptical about transactions, so expect them to push you (and your audit committee) to be more diligent ...
-
Blog
COSO Expects First-Quarter Release of ERM Update Draft
Image: COSO expects to publish a draft of its Enterprise Risk Management Integrated Framework in the first quarter of 2016. First released more than a decade ago, COSO opted to make updates in light of modern business conventions and practices. COSO Chairman Bob Hirth says, “It will be ...
-
Blog
PCAOB Issues Fresh Warnings on Risk
Image: The PCAOB has issued a report describing the deficiencies it sees in how audit firms implement and comply with risk assessment standards. “Because risk assessment underlies the entire audit process, it is critical that audit firms address these findings of weaknesses in compliance with the risk assessment standards,” said ...
-
Blog
Pro Forma Reporting Tasked in Brisk M&A Market
A robust M&A market along with pro forma financial reporting rules have made it challenging for companies to comply with reporting requirements. New guidance from EY is meant to help companies know what pro forma financial information to present in SEC filings, which SEC forms require pro forma financial information, ...
-
Article
Year-End Audits: Start Prepping for the Pain
As public companies and their external auditors gear up for the year-end audit cycle, it will likely include some familiar, yet still uncomfortable, conversations. Be ready for close looks at internal control over financial reporting, accounting estimates, and related-party transactions. “You can rest assured auditors are going to be really ...
-
Blog
CAQ Echoes Regulatory Warnings for Year-End Audits
Image: The Center for Audit Quality has issued an alert to auditors advising where they should focus their audit attention this year. First up is professional skepticism and internal control over financial reporting, followed closely by risk assessments, cyber-security, revenue recognition, and related parties. “These alerts reflect the public company ...
-
Blog
More Data Show Audit Fees Rising for Public Companies
A recent study from Financial Executives International of 7,000 public companies revealed that 20.6 percent reported ineffective internal controls over financial reporting, and the median audit fee increase for those companies was 3 percentage points higher than for public companies as a whole. The companies cited two primary reasons for ...
-
Blog
OECD Measures Would Tie Off International Tax Loopholes
The Organization for Economic Cooperation and Development has offered the G-20 nations measures intended to plug the holes that let companies engage in offshore tax planning that reduces the total global tax base. The package includes minimum standards to thwart the use of conduit companies to channel investments. It also ...