The Financial Accounting Standards Board, flummoxed by accounting complexity of its own making, decided last week to bail out of a plan to provide new guidance on how to account for certain intangible assets. “They’re going to let practice work itself out,” says Kim Kushmerik, a technical manager with the American Institute of Certified Public […]
Tammy Whitehouse
Posted inAccounting & Auditing
PCAOB To Audit Firms: Lighten Up
While audit regulators churn away on promised revisions to Auditing Standard No. 2, their chief auditor is imploring those in the field to heed earlier guidance, use more judgment, and lighten up on excessive testing and audit procedures. In a speech to the 25th annual SEC and Financial Reporting Institute Conference in Pasadena, Calif., last […]
Posted inAccounting & Auditing
Conflicting Formulas Emerge On Pension Reforms
Now that accounting rulemakers are planning to require companies to move their pension obligations from the footnotes to the balance sheet, companies are appealing for a new measurement formula to determine what they will report as a pension liability—one that would lower the value of the reported cost. The Financial Accounting Standards Board has proposed […]
Posted inAccounting & Auditing
FASB On Insurance; New Auditing Standards; More
Accounting rulemakers are planning a look at the insurance accounting rules that put American Insurance Group into trouble with securities regulators. The Financial Accounting Standards Board has issued an invitation to comment, looking for ideas on how companies should be required to break apart insurance contracts to better distinguish between true insurance and financing arrangements. […]
Posted inAccounting & Auditing
Adverse Reports Fall, But Small Cos. Struggle
Ernst & Young audited more accelerated filers and issued fewer adverse opinions last year than any other Big 4 firm, according to a recent analysis of internal control filings with the Securities and Exchange Commission. At the opposite end of the spectrum, KPMG audited the second-lowest number of accelerated filers, yet showed the highest rate […]
Posted inAccounting & Auditing
Auditor Filings Eyed; AICPA Data Missing
The Public Company Accounting Oversight Board is pushing new disclosure rules for CPA firms, which could ultimately force auditors to alert regulators when they—or their clients—encounter numerous types of governance woes. Under new rules proposed last week, the PCAOB wants to be notified within 14 days if an audit firm withdraws a public company’s audit […]
Posted inInternal Controls
External Auditor Role Seen Reduced Amid AS2 Revisions
Acceding to fierce criticism of Sarbanes-Oxley and the internal control provisions of Section 404, regulators are promising to tone down the auditors’ role—possibly even eliminating the audit for smaller companies, at least temporarily—while giving companies new guidance and ultimately new leverage over financial reporting. Last week the Securities and Exchange Commission and the Public Company […]
Posted inAccounting & Auditing
FASB Acts On Taxes; Japan Rebukes PwC
The Financial Accounting Standards Board is planning to finalize its position on how companies should present uncertainties about tax issues in a way that gives companies some more flexibility than originally planned. At a recent board meeting, members wrestled with how a company should show the financial impact of a position they are taking with […]
Posted inInternal Controls
Report: More Late Filings, But Fewer Weak Controls
Early analysis of Year Two internal control reports indicates the number of companies that can’t meet deadlines to file their financial statements may be rising, but fewer companies are reporting problems with internal controls. In a recent study of the companies Moody’s Investors Service follows to establish credit ratings, 75 companies that reported on their […]
Posted inAccounting & Auditing
Companies Say Risk-Based Approach Remains Elusive
Corporate executives gave regulators an earful of complaint last week that hopes of a risk-based, top-down approach to audits of internal control still have yet to take root, despite extra guidance and two years of experience. Speaking at a much-anticipated roundtable discussion among auditors, regulators and corporations to review progress in the second year of […]