Accounting & Auditing

Accounting regulators predict big developments for 2006, including a new report on audit quality control, a new approach to inspections based on earlier guidance, and new standards on audit quality and communications. Bill Gradison, acting chairman of the Public Company Accounting Oversight Board, told a recent gathering of the Tax Council Policy Institute that the […]

The Financial Accounting Standards Board issued its final standard on certain hybrid financial instruments last week, attempting to simplify accounting for those instruments and also advance the use of fair-value accounting. The new standard, “Statement of Financial Accounting Standard No. 155, Accounting for Certain Hybrid Instruments,” is an amendment of FASB Statements No. 133 and […]

Banking regulators have finished their advisory to financial institutions warning against agreements to auditor liability, while that debate is now starting to simmer at the Public Company Accounting Oversight Board. The Federal Financial Institutions Examination Council—an interagency body that sets standards for financial institutions—made only one departure from its original position in advising banks and […]

With no significant changes to its recently proposed guidance, the Financial Accounting Standards Board has finalized its relaxation of the original language in its share-based payment standard on how to account for stock options granted with an embedded cash settlement feature. FASB acted swiftly to finalize the guidance and calm another recent wave of panic […]

Public companies set a record in 2005 that they may not want to celebrate. Thanks to Sarbanes-Oxley Section 404 and lease accounting issues, 2005 was a record year for restatements. But experts say the outlook should be better for 2006. Turner 2005 saw more than 1,200 restatements—about double the number for all of 2004, says […]

In the great restatement wave of 2005, much attention focused on problems in lease accounting. Now experts say hedge accounting errors deserve at least some blame for the volume of restatements—and more are likely on the way. At least 40 companies with market capitalizations above $100 million restated financial results in 2005 to correct hedge […]

The U.S. Chamber of Commerce is calling on regulators and lawmakers to change the playing field for audit firms, protecting both the profession and capital markets in the process. In a recent white paper, “Auditing: A Profession at Risk,” the Chamber asserts that auditors need protection from litigation, a clearer understanding of their role as […]

The Financial Accounting Standards Board’s reason for being is to establish generally accepted accounting principles (GAAP). Some parties erroneously believe that phrase means that accounting rules must be supported by at least a majority of the Board’s constituents. Rather, the phrase refers to standards that are promulgated following an extensive due process within an overall […]

The Financial Accounting Standards Board has issued an exposure draft giving companies the choice, but not a mandate, to report certain financial assets and liabilities at fair value. Under the proposed statement, companies could measure financial assets and liabilities at fair value on a contract-by-contract basis, with the effect included in earnings. Assets and liabilities […]

Tucked away at the bottom of its 2005 income statement issued last week, Ford Motor Company delivered a $251 million answer to a new accounting question—one that experts say is catching many companies unaware or just starting to get their attention. Ford booked a $251 million charge to earnings to comply with Interpretation No. 47, […]