T he Financial Accounting Standards Board is taking a stand on how companies can designate a risk being hedged under existing accounting rules if the interest rate on that instrument is not based solely on an index. Financial Accounting Standard 133, Accounting for Derivative Instruments and Hedging Activities, addresses the precise circumstances under which derivatives […]
Tammy Whitehouse
Posted inAccounting & Auditing
PCAOB Answers More Expensing Questions
As auditors prepare for the 2006 year-end audit season—the first in which stock options will be fully expensed and listed on the balance sheet for all to see—the Public Company Accounting Oversight Board published new “frequently asked questions” guidance to help them through the process. Tom Ray, chief auditor of the PCAOB, published the 28-page […]
Posted inInternal Controls
SOX 404, AS2 Guidance Is Looming
Auditing and securities regulators have decided to coordinate their schedules this fall, preparing a double feature of new guidance for corporations struggling to comply with Sarbanes-Oxley and for auditors who have misunderstood Auditing Standard No. 2—all within the next two months. First up is the Public Company Accounting Oversight Board, which wants to reveal its […]
Posted inAccounting & Auditing
Auditors’ Opinions Split On Issuing Reports
Audit firms seem split on whether they prefer to issue one audit report or two when giving companies opinions on financial statements and on internal control over financial reporting. A group of KPMG auditors in Germany became curious about how auditors report on the integrated audit that the Public Company Accounting Oversight Board requires under […]
Posted inAccounting & Auditing
FASB On Equity Accounting; EU On Liability
The Financial Accounting Standards Board has finished a technical correction to guidance issued last summer related to stock option expensing rules. Staff Position No. 123(R)-5 addresses whether changes to equity compensation grants made in connection with an equity restructuring or a business combination, such as a merger or acquisition, should be regarded as a change […]
Posted inInternal Controls
Where IT, Internal Controls Collide
No one disputes that companies need IT tools to comply with Sarbanes-Oxley and monitor internal controls—but in some cases, the tools themselves are what stand in the way of SOX compliance. In a Compliance Week analysis of 400 companies disclosing material weaknesses in internal control over financial reporting, 52 pointed to their IT systems as […]
Posted inAccounting & Auditing
FASB Considers, Rejects Additional Pension Disclosures
Accounting rulemakers considered and quickly rejected an idea to establish some new disclosures related to recent legislation requiring companies to bulk up contributions to underfunded pension plans. The Financial Accounting Standards Board met last week to debate whether it should open a new project to look at disclosure requirements surrounding defined-benefit pension plans in light […]
Posted inAccounting & Auditing
Who Owns ERM? More From EITF And IFAC
Audit committees generally give themselves high marks for effectiveness, but want to see better oversight of management’s accounting judgments and estimates, according to a recent survey by KPMG’s Audit Committee Institute and the National Association of Corporate Directors. More than 70 percent of audit-committee members participating in the poll rated their audit committee overall as […]
Posted inAccounting & Auditing
Ready For Line-Item Pension Disclosures?
Pensions assets and liabilities will begin appearing on the face of 2006 corporate balance sheets beginning with calendar-year-end companies, following the Financial Accounting Standards Board’s action to finalize its latest statement of accounting standards. In the first of two phases to overhaul how companies account for pensions and other retirement benefits, FASB is requiring companies […]
Posted inAccounting & Auditing
PCAOB Talks Shop; Small-Firm Audits; More
The Public Company Accounting Oversight Board is gathering its advisers for a routine session on where regulators should focus their attention, but little of that attention is expected to turn to new or existing auditing standards. The PCAOB’s Standing Advisory Group will meet Oct. 5 in Washington, D.C., devoting most of its time to how […]