Accounting & Auditing

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. […]

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 […]

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 […]

Red, yellow, green. Once a quarter, Sunterra Corp.’s Chief Audit Executive Allan Misner meets with the company’s audit committee and provides a summary on the current standing of recent audits performed by his group. As part of the presentation, Misner uses a color-based, “stoplight” rating system for the audits he presents. An audit with no […]

Audit firms seem split on whether they prefer to issue one audit report or two when giving companies opinions on financial statements and on internal control over financial reporting. A group of KPMG auditors in Germany became curious about how auditors report on the integrated audit that the Public Company Accounting Oversight Board requires under […]

The Financial Accounting Standards Board has finished a technical correction to guidance issued last summer related to stock option expensing rules. Staff Position No. 123(R)-5 addresses whether changes to equity compensation grants made in connection with an equity restructuring or a business combination, such as a merger or acquisition, should be regarded as a change […]

Accounting rulemakers considered and quickly rejected an idea to establish some new disclosures related to recent legislation requiring companies to bulk up contributions to underfunded pension plans. The Financial Accounting Standards Board met last week to debate whether it should open a new project to look at disclosure requirements surrounding defined-benefit pension plans in light […]

The Institute of Internal Auditors, which has experienced unprecedented growth in membership the past couple of years, is reaching out to its global membership to conduct the organization’s biggest-ever research study of the internal-auditing profession. As reported in last week’s Accounting Industry Update, at the end of this month, the Altamonte Springs, Fla.-based group will […]

Audit committees generally give themselves high marks for effectiveness, but want to see better oversight of management’s accounting judgments and estimates, according to a recent survey by KPMG’s Audit Committee Institute and the National Association of Corporate Directors. More than 70 percent of audit-committee members participating in the poll rated their audit committee overall as […]

Pensions assets and liabilities will begin appearing on the face of 2006 corporate balance sheets beginning with calendar-year-end companies, following the Financial Accounting Standards Board’s action to finalize its latest statement of accounting standards. In the first of two phases to overhaul how companies account for pensions and other retirement benefits, FASB is requiring companies […]