Accounting & Auditing

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

Accounting firm Grant Thornton resigned as auditor of Peoples Community Bancorp last week after the $38.4 million bank hired one of GT’s managers as CFO. The firm was forced to resign due to independence issues. According to Section 206 of The Sarbanes-Oxley Act of 2002, an accounting firm cannot conduct the audit of a company […]

Study by three professors at Northwestern University’s Kellogg School of Business documents management of accounting earnings from 1987 until the passage of the Sarbanes-Oxley Act.

At a House Committee hearing last week, Deloitte and Touche CEO Jim Quigley cited the difficulty companies and auditors would have meeting new, accelerated filing deadlines for annual reports. The new deadlines are part of rule amendments adopted in September 2002, which accelerated the filing of quarterly and annual reports under the Securities Exchange Act […]

As of last week, Ernst & Young is about halfway through one of the toughest punishments ever doled out by the SEC for auditor misconduct. On April 16, 2004, the Big Four accounting firm was barred from accepting new SEC audit clients for a six-month period. The ban, which ends in late October, was related […]

Last week, the Public Company Accounting Oversight Board held a roundtable session to discuss issues related to auditor independence and tax services. The roundtable took place just weeks after SEC Chief Accountant Don Nicolaisen ordered accounting firms to disclose all contingency-based tax fees to company audit committees. Those fees—which enable the auditor to take a […]

Last week, the Securities and Exchange Commission accused a Denver accounting firm of destroying documents and altering work papers at a former client. Levine, Hughes & Mithuen audited the 1998 and 1999 financial statements of Sport-Haley, a small company that designs golf sportswear under the Haley and Ben Hogan labels. According to the complaint, the […]

Afederal judge in Illinois ruled that accounting firm BDO Seidman wouldn’t be required to turn over more than 100 confidential documents sought by the IRS as part of a probe into abusive tax shelters. Judge James Holderman wrote in his decision that the client documents are protected under attorney-client privilege rules. As a result, Holderman […]

The International Accounting Standards Board has released a joint venture questionnaire to identify the various structures of joint arrangements used worldwide. Though joint ventures aren’t specifically on the agenda of the U.S.-based Financial Accounting Standards Board, the FASB is still encouraging U.S. public companies to provide the researchers “with information on prevailing joint arrangement structures […]

Texas-based oil and gas company Harken Energy was informed last week by its outgoing auditor, BDO Seidman, of a material weakness in its accounting system. According to an SEC filing, the weakness relates to an “inability to determine the appropriate accounting for non-routine securities transactions on a timely basis.” Harken’s audit committee hired an independent […]