Audit regulators published the third and fourth Big Four accounting firm inspection reports last week—for Ernst & Young and PricewaterhouseCoopers—continuing the themes of earlier reports that cited significant audit deficiencies. But it’s not the audit problems that’s disturbing the preparer community: it’s the restatements that seem to inevitably accompany the inspections. Cunningham “Accounting is so […]
Tammy Whitehouse
Posted inAccounting & Auditing
PCAOB Extends Deadline For Independence Rules; More
Companies will have a 60-day reprieve from compliance with certain auditor independence rules, following a technical amendment that has little impact on the new rule itself. The Public Company Accounting Oversight Board adopted some technical amendments last week to its new rules on auditor ethics and independence, which the Board adopted in July to create […]
Posted inAccounting & Auditing
Study: SPE Accounting Variations Mask True Cash Flow
Cash flow classifications are so flexible that companies are reporting like transactions in different ways, masking true cash flow and exacerbating comparability among companies, according to a new report from the Georgia Tech Financial Analysis Lab. It’s not a case, however, where companies are pushing the limits of accounting rules to bolster their own results, […]
Posted inFrom the Archive
Lots Of Talk, Still Not Much Action On ERM
Companies are starting to think more about the risks they face when making business decisions, but they are not yet fully considering those risks during the decision-making process. Hexter “We’re still seeing that most companies are in the very early stages,” said Ellen Hexter, program director and senior research fellow for the Conference Board. “There’s […]
Posted inAccounting & Auditing
FASB Plans Overhaul Of Pension Accounting Rules
Amid crumbling pension plans and cries for fair value accounting and plain English disclosure, accounting standard setters have decided to take a look at overhauling the rules governing pension accounting. The Financial Accounting Standards Board said it will begin with a short-term project to bring footnote disclosures onto the balance sheet, to cast more light […]
Posted inAccounting & Auditing
New Guidance On Stock Option Taxes, SPEs, More
The Financial Accounting Standards Board has finalized its guidance on three separate accounting issues that have raised questions in corporate finance circles. First, FASB issued its staff position—No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards—on how companies should report the tax impact of stock option expensing if […]
Posted inAccounting & Auditing
FASB Rejects IFRS Project; Reconciliation Bristles SEC
The Financial Accounting Standards Board decided not to take up a project requested by first-time adopters of new accounting rules in Europe to relieve some reporting or reconciliation requirements. FASB said it was asked to eliminate certain differences between net income and equity as reported under U.S. Generally Accepted Accounting Principles for companies that are […]
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The Street’s View Of Stock Expenses, Pro Forma Earnings
To include or exclude stock-based compensation expense in analysis and discussion of company earnings? That is the question analysts and investors will face as companies roll out earnings statements reflecting new stock option expensing rules. Bronson “From a Wall Street perspective, my current take is that most analysts will strip this out from their estimates, […]
Posted inAccounting & Auditing
The Shift Toward Principles; Rules On Gifts; More
As standard setters try to steer the accounting profession toward a more principles-based approach to accounting rules, the rule makers and their advisors continue to wrestle with how to achieve the shift and how much implementation guidance to offer along the way. In the latest annual survey of the Financial Accounting Standards Advisory Council, which […]
Posted inAccounting & Auditing
Analysts Propose Investor-Driven Reporting Model
A nonprofit association for financial analysts has written up its vision for how financial statements can be rewritten to become more investor friendly. The CFA Centre for Financial Market Integrity, an arm of the CFA Institute (formerly the Association for Investment Management and Research), presented its proposed financial reporting model to the Financial Accounting Standards […]
