An approach tried and rejected in the auditing of internal control over financial reporting may now be considered as a method for auditing the use of fair value measurements in public company accounting. In the tumultuous early years of internal control auditing under Sarbanes-Oxley’s Section 404 and Auditing Standard No. 2, auditors were ordered to […]
Tammy Whitehouse
Posted inFrom the Archive
Investment Banking Firms Take On Defined-Benefit Plans
The investment banking community is sniffing out a business opportunity in the growing risk and volatility surrounding defined-benefit plans: whether they can assume the liability, manage the assets more effectively than plan sponsors yet more aggressively than insurance companies, and make the price attractive to companies. The concept already is trickling into the market in […]
Posted inAccounting & Auditing
Senate Looks At Options; SEC On FIN 48
U.S. senators are scrutinizing the differences between accounting and tax treatments for executive stock options, saying the federal treasury is letting bundles of money go untaxed. Sen. Carl Levin, D-Mich., chairman of a Senate Subcommittee on Investigations, convened a hearing to examine the accounting rules surrounding stock options, particularly why companies are allowed to report […]
Posted inAccounting & Auditing
Hedge Reform; Comparability Under ‘Principles’
FASB is developing new guidance in hedge accounting and in how a company determines its ability to continue as a going concern. In recent FASB meetings, the Board has decided to open a new project to consider how it might revise accounting rules around the ultra-complex areas of derivatives and hedge accounting. Separately, FASB also […]
Posted inInternal Controls
Fears, Hopes For Audits Done Under AS5
Accounting experts aren’t rushing to judgment that Auditing Standard No. 5 will result in an overnight reversal of excessive auditing—primarily because the new rule has no influence over escalating auditor liability concerns—but they are optimistic that it will steer auditors in a new direction. The Public Company Accounting Oversight Board approved AS5 late last month […]
Posted inAccounting & Auditing
Auditor Turnover Slows; Tax Reserve Study
The turnover of accounting firms at public companies slowed a bit in 2006, with 1,322 U.S. public companies disclosing they’d parted ways with their audit firms, including 66 companies that changed auditors more than once in the same year, according to a recent study. Since 2002, with the fall of Arthur Andersen from the ranks […]
Posted inInternal Controls
New AS5 More In Line With SEC Guidance
Promising a new direction in the audit of internal control over financial reporting, the Public Company Accounting Oversight Board has put to pasture the oft criticized Auditing Standard No. 2, replacing it with Auditing Standard No. 5. The newly approved AS5 differs from what the Board proposed when it first exposed its package of rules […]
Posted inAccounting & Auditing
SEC Confirms Review Of Interim Materiality
The staff of the Securities and Exchange Commission confirmed in last week’s open meeting that it is trying to resolve the questions regarding how interim or quarterly materiality should affect annual materiality considerations. Atkins In a discussion about the SEC’s guidance for management over how to assess internal controls over financial reporting, Commissioner Paul Atkins […]
Posted inAccounting & Auditing
SOX Costs Fall, Audit Fees Steady; IMA On ERM
The latest survey on Sarbanes-Oxley compliance costs finds that after three reporting cycles, corporations have become more efficient and reduced their costs internally, but external audit costs are holding steady. Financial Executives International surveyed 200 companies, most of them large accelerated filers that have had to comply with SOX since 2004. The survey found that […]
Posted inAccounting & Auditing
How To Choose Between GAAP, IFRS
If given the choice, would U.S. companies prefer to report their financial results using long-standing but complicated U.S. Generally Accepted Accounting Principles? Or would they flock to the upstart, less prescriptive International Financial Reporting Standards spreading like wildfire throughout the rest of the accounting world? The Securities and Exchange Commission has hinted it may well […]
