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Accounting & Auditing Update

The "Accounting & Auditing Update" is written by Tammy Whitehouse, a veteran business writer who has been a regular contributor to Compliance Week since 2005. Her work has also appeared in industry journals and periodicals including Journal of Business Strategy, Strategy & Leadership, Compensation & Benefits Review, Inc, Buyside, and myriad others. Whitehouse welcomes questions and comments from readers; she can be reached via e-mail at twhitehouse@complianceweek.com.
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Accounting & Auditing Update Blog
Re-Audit Clean After EY Firing Over Relationship
Tammy Whitehouse | September 8, 2014
A re-audit at Ventas, the company that fired EY when it learned of an “inappropriate personal relationship” between its chief accounting officer and an audit partner, came back clean. Ventas hired KPMG to re-audit financial statements for fiscal years 2012 and 2013 when it learned of the relationship in mid-2014. KPMG’s re-audit did not result in any adjustments or changes to the company’s financial statements or footnotes for those fiscal years. More inside.
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Accounting & Auditing Update Blog
SEC Pursues Independence Charges Against Mayer Hoffman McMann
Tammy Whitehouse | October 17, 2014
Oct. 17—Audit firm Mayer Hoffman McCann and one of its audit clients are under fire from the SEC for alleged violations of auditor independence rules over stock trades. The SEC says MHM audit client TradeBot, a high-frequency broker-dealer, owned shares of publicly traded consulting firm CBIZ, to which MHM is tied under an “alternative practice structure” in violation of auditor independence rules. “MHM lacked an appropriate system of quality controls to detect transactions in CBIZ stock to its attest clients in order to ensure those engagements complied with the firm’s legal and ethical requirements,” the SEC wrote. More inside.
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Accounting & Auditing Update Blog
SEC, PCAOB Deliver Fresh Warnings on Auditor Independence
Tammy Whitehouse | December 9, 2014
Dec. 9—Public companies have been handed a not-so-subtle reminder to pay closer attention to auditor independence. At the annual AICPA conference this week, the SEC announced it had sanctioned eight audit firms with fines totaling $140,000 for violating auditor independence rules because they prepared financial statements of brokerage firms whose financial statements they were also auditing. The Public Company Accounting Oversight Board said it disciplined seven small firms with fines of $2,500 each for the same offense. More inside.
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Accounting & Auditing Update Blog
Study Shows No Better Reporting After Auditors Cut Tax Services
Tammy Whitehouse | April 10, 2015
U.S. auditor independence rules targeted at tax work have done nothing to improve financial reporting quality, according to new academic research out of Singapore. The study found a big shift in non-audit services provided by audit firms, leading to a significant drop in auditor-provided tax services, especially among firms that had been accused of selling aggressive tax schemes meant to avoid taxation.
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Accounting & Auditing Update Blog
Big 4 Make Big Gains in Consulting Services, Report Says
Tammy Whitehouse | June 19, 2015
According to a new report from Source Information Services, Big 4 accounting firms outperformed the U.S. market in 2014, growing 12.8 percent to $17.5 billion in revenue compared with 2.4 percent growth for the economy overall. The U.S. market for consulting grew 9 percent in 2014 to more than $50 billion in activity. “People have more confidence in the economy now,” says Source Senior Editor B.J. Richards. More inside.
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Accounting & Auditing Update Blog
SEC Slaps Deloitte for Auditor Independence Violations
Tammy Whitehouse | July 1, 2015
The SEC has charged Deloitte & Touche with violating auditor independence rules after it failed to notice a consulting affiliate had a business relationship with an audit client. Deloitte says it discovered the violation and reported it after the firm put in place enhanced independence measures. Deloitte will settle charges for $1.1 million. More inside.
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Accounting & Auditing Update Blog
Audit Fee Data Reveals New Split on Non-Audit Services
Tammy Whitehouse | August 26, 2015
According to a recent Audit Analytics study of fees paid in 2014 by 2,300 accelerated filers, 80.3 percent were focused on the integrated financial statement internal control audit; fees for non-audit services dipped to 19.7 percent of the total bill from the audit firm, a drop from 20 percent during the past several years. Before Sarbanes-Oxley, audit and non-audit services split almost exactly 50-50, suggesting the regulator crackdown on auditor independence violations is driving a significant gap between what companies pay for the financial statement audit compared with other non-audit services. Details inside.
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Accounting & Auditing Update Blog
SEC Charges Grant Thornton Affiliates for Auditor Independence
Tammy Whitehouse | October 2, 2015
The Securities and Exchange Commission has charged two Grant Thornton affiliates in India and Australia with violating auditor independence rules based on their activities in the tiny island nation of Mauritius off the east coast of Africa.
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Accounting & Auditing Update Blog
EY settles two auditor independence cases with SEC
Tammy Whitehouse | September 19, 2016
EY has agreed to a $9.3 million settlement of auditor independence charges with the SEC in two cases where auditors got too close to public company audit clients. Tammy Whitehouse reports.
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Accounting & Auditing Update Blog
Investors left in the dark over SEC auditor independence charge
Tammy Whitehouse | September 22, 2016
The SEC may have fined EY for auditor independence violations, but investors in at least one company likely have no idea that the company’s audits may be tainted. Tammy Whitehouse has more.
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Accounting & Auditing Update Blog
SEC warns companies: don't ask auditors for help on revenue rule
Tammy Whitehouse | November 18, 2016
The SEC is cautioning companies hoping for help from their auditors in adopting the new revenue recognition standard. They are limited by independence rules.
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Accounting & Auditing Update Blog
Auditors get guidance on altering audit report
Tammy Whitehouse | December 5, 2017
Auditors have some new guidance from the PCAOB about how to begin revising their audit reports to reflect new requirements that take effect this year-end.
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Accounting & Auditing Update Blog
Auditors defer more to former colleagues, study suggests
Tammy Whitehouse | February 13, 2018
Auditors will show some deference to judgment calls when the CFO of the client company is an alumni of the audit firm, according to emerging academic research.
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Accounting & Auditing Update Blog
Study establishes link between fee pressure and audit quality
Tammy Whitehouse | March 20, 2018
New academic research suggests there is indeed a correlation between pressure on audit fees and audit quality — and it’s not pretty.
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Accounting & Auditing Update Blog
New PCAOB takes fresh look at auditor independence
Tammy Whitehouse | April 11, 2018
The all-new PCAOB is taking a fresh look at whether auditors need new guidance on their required communication with audit committees regarding independence.
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Accounting & Auditing Update Blog
Global body reboots ethics rules for accountants
Tammy Whitehouse | April 25, 2018
Accountants globally have some revised ethics rules to follow, which should prompt an examination in the United States over whether there are new thresholds to meet.
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Accounting & Auditing Update Blog
Investors show strong response to partner IDs
Tammy Whitehouse | April 26, 2018
Investors react when they know the name of an engagement partner on an audit, research suggests, but the reaction may be stronger than expected.
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Accounting & Auditing Update Blog
SEC proposes amending auditor independence rules
Tammy Whitehouse | May 4, 2018
The SEC is proposing changes to its auditor independence rules to relax limitations that made compliance with loan provisions virtually impossible.
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Accounting & Auditing Update Blog
SEC, PCAOB discipline ex-auditors at BDO, Deloitte
Tammy Whitehouse | October 17, 2018
Two new enforcement actions give audit committees some textbook reminders to keep tabs on auditors regarding their compliance with professional standards.
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Accounting & Auditing Update Blog
No change in audit-non-audit mix in U.S., KPMG says
Tammy Whitehouse | November 20, 2018
Amid reports that KPMG is drawing a firmer line between audit and non-audit services in the United Kingdom, the firm has no similar plans in the United States.
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Accounting & Auditing Update Blog
EY holds fast to U.S. audit model; PwC silent
Tammy Whitehouse | February 8, 2019
EY may be taking steps to draw a broader line between audit and consulting services in the U.K., but the U.S. firm has no such plans. Meanwhile, PwC is silent.
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Accounting & Auditing Update Blog
Deloitte Japan settles $2 million independence charge
Tammy Whitehouse | February 13, 2019
Deloitte Japan has agreed to a $2 million penalty to settle charges with the SEC over auditor independence violations.
Displaying 22 results