This summer’s implosion of the sub-prime mortgage industry has put the measurement of fair-value accounting in a very harsh spotlight. The spiking number of defaults and foreclosures in sub-prime mortgages is taking its toll on hedge funds, investment banks, and others holding exotic financial instruments backed by that mortgage debt. In theory, the value of […]
Tammy Whitehouse
Posted inAccounting & Auditing
Union Warns on Options; Internal Control Success; More
The powerful AFL-CIO labor union has warned major audit firms that investors expect to see more work done to clean up corporate accounting around improperly granted stock options in the coming months. AFL-CIO Treasurer Richard Trumka sent a letter to the Big-4 accounting firms reminding auditors of their duty to spot and correct instances of […]
Posted inInternal Controls
Planning for Your First AS5 Audit
If there were ever a time in the Sarbanes-Oxley era for companies to take the bull by the horns, now would be it. For the largest public companies, the first reporting cycle under new rules for internal control over financial reporting may be months away. But audit experts say now is the time for companies […]
Posted inAccounting & Auditing
Predicting Fraud; More FIN 48 Guidance
New research bankrolled by the leading audit firms has established a methodology for predicting fraud, but it’s not clear how much that formula may play a part in fraud risk assessments going forward. In a study of financial reports from 680 companies that were subject to Securities and Exchange Commission enforcement actions for accounting problems, […]
Posted inInternal Controls
How the Audit Firms Are Implementing AS5
The regulatory mandate that audits of internal controls focus sharply on the risks of fraud or material misstatement has been heard loud and clear. Still, companies can expect some bumps along the road to achieving consistent implementation of that new attitude spelled out under Auditing Standard No. 5. Exactly how AS5 will be implemented by […]
Posted inAccounting & Auditing
Japan Convergence; Pension Balances; More
Accounting standards setters in Japan have struck an accord with the International Accounting Standards Board to accelerate the pace of convergence of accounting standards, aiming to eliminate any lingering differences by June 2011. The Accounting Standards Board of Japan has been working with the IASB since 2005 to remove major differences between Japanese Generally Accepted […]
Posted inAccounting & Auditing
FASB on Insurance; New Audit Standards
The Financial Accounting Standards Board is looking for the market’s views on whether it should declare open season on accounting rules related to insurance for policyholders and issuers alike. FASB has called for comment on how much the U.S. market likes what the International Accounting Standards Board has developed so far in its effort to […]
Posted inAccounting & Auditing
More Sparring Over Fair Standards for Valuation
In the ongoing debate over how to unravel unnecessarily complicated accounting rules, nobody wants to hit the “delete” key for valuation standards. Instead, much of the market is crying for more guidance and rules around valuation to corral a herd of divergent approaches. Bowerman “Transparency? I feel like I’m looking through a piece of glass […]
Posted inAccounting & Auditing
FASB Guidance; SOX at 5; PCAOB Work
The Financial Accounting Standards Board has decided to shelve planned guidance on a narrow aspect of materiality, awaiting the outcome of action by the Securities and Exchange Commission and other bodies that are studying materiality and financial reporting in a broader sense. The Board issued a proposed staff position in late April mirroring earlier guidance […]
Posted inAccounting & Auditing
Oh, Joy: IRS Eager for FIN 48 Data
The Internal Revenue Service is gearing up to take a close look at new disclosures about where companies believe they may have holes in their tax positions, while early data suggests companies overall are hoping to hold their cards as close to the vest as possible. In recent speeches and in written directives to staff, […]
