A lthough it still hasn’t pinned down a final date for the unveiling of a revised Auditing Standard No. 2, the Public Company Accounting Oversight Board has been working on “a new standard to replace current AS2,” Board Chairman Mark Olson said during a recent speech—hinting at just how far-reaching the amendments to the much-maligned […]
Tammy Whitehouse
Posted inFrom the Archive
Sustainability Gains Ground As ERM Tool
Whether lured by the promise of new opportunity or pushed by the fear of mounting risks, a growing number of public companies are starting to think a little more altruistically—and paying more attention to their ability to sustain themselves well into the future. “Corporate sustainable development” is a new way of doing business for U.S. […]
Posted inAccounting & Auditing
FASB Guidance; Why SOX Costs Rise; More
T he staff of the Financial Accounting Standards Board is proposing a narrow exception to existing accounting rules for derivatives, with the recent issuance of tentative implementation guidance related to Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities. The staff issued Implementation Issue No. B40 in draft form to specify that […]
Posted inInternal Controls
Documentation Weaknesses Abound
While corporate-finance professionals might generally agree with the saying, “you can’t manage what you can’t measure,” many believe that Sarbanes-Oxley—and especially the subsequent Auditing Standard No. 2—have created measurement overkill. The tried-and-true method of management by measurement is by documentation: the theory that companies should document how things are supposed to be done, then lay […]
Posted inFrom the Archive
Form 4s Indicate Yet More Backdating Woes
A recent study of stock option disclosures and stock prices suggests that some companies may have committed instances of backdating into the current fiscal year, contradicting the widespread belief that backdating largely ended in 2002 with the passage of Sarbanes-Oxley Act. A handful of companies included in the recent study, conducted by proxy research firm […]
Posted inAccounting & Auditing
COSO News; Reform Of Financial Reporting?
The authors of the most entrenched framework for establishing internal control over financial reporting are planning to issue more guidance on how companies can monitor controls on an ongoing basis to make their compliance efforts more efficient. One central component of the COSO model—crafted by the Committee of Sponsoring Organizations and widely used to facilitate […]
Posted inAccounting & Auditing
Fair-Value, Tax Services Update; More
A udit regulators have delayed until next spring the starting date for an independence rule designed to create greater separation between audit and tax work—and may be rethinking certain aspects of the rule entirely. Last week, on the eve of the rule’s effective date, the Public Company Accounting Oversight Board adjusted the implementation schedule for […]
Posted inAccounting & Auditing
Revenue-Recognition Weaknesses
It’s clear that the sweeping reforms in accounting and financial reporting ushered in by Sarbanes-Oxley is exposing a wide range of problems for companies to address—ones that go well beyond crackdowns on cooking the books, but also a panoply of sloppy practices and a general misapplication of Generally Accepted Accounting Principles. Carcello Take revenue recognition. […]
Posted inAccounting & Auditing
Guidance Galore On Hedging, Fair Value
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 […]
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 […]
