There can be no guarantees in auditing. On that much, the financial community seems in agreement. But how much assurance can auditors provide when offering their opinion on the soundness of financial statements? How can or should that assurance be measured? That’s a question emerging as corporate failures and incidents of fraud continue to unfold, […]
Tammy Whitehouse
Posted inAccounting & Auditing
New Fair Value Guidance On Measuring Derivatives; More
In another step along the pathway to fair value accounting, the Financial Accounting Standards Board issued a proposed staff position that seeks to clarify how companies should account for unrealized gains or losses on derivatives measured at fair value. The guidance addresses a quandary regarding how companies should recognize a gain or a loss for […]
Posted inAccounting & Auditing
Accountants Need More Help Finding Fraud At Public Cos.
According to a leader in forensic accounting, more must be done to help accountants to find fraud at public companies. Wells “Accountants don’t currently learn what motivates fraudulent conduct, how to spot the signals, how to prevent fraud from occurring and much more,” said Joseph Wells, founder and chairman of the Association of Certified Fraud […]
Posted inAccounting & Auditing
Companies Using Ranges To Set Valuation Assumptions
As companies wrestle with how best to value stock options, some are experimenting with using ranges instead of set figures for their assumptions about term and volatility. Assumptions are significant because they are the basis for establishing a value for stock options, which becomes the basis for the ultimate expense that is charged to earnings. […]
Posted inFrom the Archive
FASB Mulls Feedback On Grant Date Communication
With the comment period closed Oct. 1, the Financial Accounting Standards Board is mulling the 18 letters it received on its proposed staff position regarding how companies can comply with grant rules associated with stock option expensing. Those who entered the debate focused primarily on whether FASB’s language was too vague in prescribing a “relatively […]
Posted inAccounting & Auditing
FASB Seeks Input On Asset, Liability Uncertainties
Accounting rulemakers are looking for new ideas on how best to book assets and liabilities when nagging uncertainties or probabilities make their accounting less than straightforward. The Financial Accounting Standards Board has issued an “invitation to comment” that poses a host of questions on how companies should book assets and liabilities when some measure of […]
Posted inAccounting & Auditing
PCAOB Planning More Guidance On Auditing, Expensing
Accounting regulators are planning to give auditors some new advice in two forms: a generalized report on its 2004 inspection findings—providing blanket advice on auditing for fraud and internal control reporting—and a question-and-answer piece on auditing accounting related to stock option expensing. “We’ve been analyzing the results from our inspections of firms to determine what […]
Posted inAccounting & Auditing
PCAOB Planning More Guidance On Auditing, Expensing
Accounting regulators are planning to give auditors some new advice in two forms: a generalized report on its 2004 inspection findings—providing blanket advice on auditing for fraud and internal control reporting—and a question-and-answer piece on auditing accounting related to stock option expensing. Carmichael “We’ve been analyzing the results from our inspections of firms to determine […]
Posted inAccounting & Auditing
COSO Small Co. Framework Delayed, Again; More
Long anticipated guidance on how to scale the market’s most accepted internal control framework to a small-company setting is now targeted for “mid-October,” perhaps Oct. 18, according to Joseph Carcello, director of research for the University of Tennessee’s Corporate Governance Center and a member of the task force drafting the new guidance. Carcello The Committee […]
Posted inFrom the Archive
FASB Shortcut May Spare Cos. A Weakness, Deficiency
When accounting rulemakers recently gave corporate finance executives an alternative method of calculating the tax impact of stock option expensing, they may also have created an escape hatch from a weakness or deficiency finding on their internal control over financial reporting. As Compliance Week covered last week (see box at right), the Financial Accounting Standards […]
