Accounting & Auditing

The PCAOB recently amended its interim auditing standards to conform to the requirements of its PCAOB Auditing Standards No. 2, “An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements.” The interim standards, adopted by the PCAOB in April 2003, were developed by the AICPA before the Board […]

Study by two professors at the University of Pennsylvania’s Wharton School of Busiess examines the relationship between the fees paid to auditors for audit and non-audit services, and the choice of accrual measures for a large sample of firms.

In late August, the Securities and Exchange Commission approved the Public Company Accounting Oversight Board’s rule proposal governing the oversight of foreign accounting firms. Under Sarbanes-Oxley, non-U.S. accounting firms are required to register with the PCAOB just like domestic firms, and they are subject to the similar types of inspections and investigations. The registration provision […]

The Public Company Accounting Oversight Board has completed its first-ever inspections of The Big Four accounting firms, and the results—though not a surprise—are not exactly pretty. Though PCAOB Chairman William McDonough went out of his way to praise the firms for their cooperation and noted that “none of our findings has shaken our belief that […]

What happened to Regulation G, the SEC rule intended to stop companies touting EBABS, or “Earnings Before All The Bad Stuff?” The regulation, adopted in January 2003, applies whenever a company publicly discloses a non-GAAP financial measure. All such disclosures must include a quantitative reconciliation of the differences “between the non-GAAP financial measure presented and […]

Last week, the SEC finally approved the Public Company Accounting Oversight Board’s rule setting standards for the preparation and retention of documentation in connection with audit engagements. The rule, promulgated by Sarbanes-Oxley after the infamous Andersen shredding incident, mandates that accountants reviewing the books of public companies maintain the audit records for seven years. The […]

Many compliance officers and in-house counsel are aware of the important steps they need to follow in order to assess a potential financial restatement and implement a comprehensive strategy for managing the restatement. It is perhaps equally instructive, however, to study the more egregious mistakes that others have made in the face of a restatement […]

On Aug. 9, the AICPA Professional Ethics Executive Committee issued an exposure draft regarding the responsibilities of businesses to disclose to their customers and clients when they outsource services. The boom in offshore outsourcing has been a lightening rod for policy makers and unions and recent months, and has become a corporate governance issue through […]

Academic study examines the effect that client size has on the relation between industry-specialist auditors and fraudulent financial reporting.