More good stuff for auditors – 8-23-13

A few links and comments that I think would be of interest to auditors:

Accounting Onion – The FRF for SMEs is a “Sack of Mush” – According to Walter Schuetze – Tom Selling continues his discussion of the serious problems he sees in FRF for SMEs. This post focuses on comments made by Walter Schuetze over several years on the direction for any sort of alternative GAAP. The conclusion, I think, is two very simple choices:  GAAP as it stands or FMV for all assets and liabilities. The professor is not impressed with the PCC alternative from FASB.

CPA-ScriboFRF for SME – The LowdownGreat Q&A on FRF-SME. I previously commented here on this post from Charles Hall, CPA. It isn’t GAAP. Not intended to be.

Financial Times – Audit the Auditors (registration required) – Brief survey of recent ideas for changes in the audit industry: expanded audit report in U.S., mandatory tender (won’t produce change if too-close-management can reselect too-cozy-auditor.

Superb reminder that:

investors are auditors’ true constituency even if managers are their employers

Grumpy Old Accountants – Garbage In, Garbage Out – Are Accountants Really to Blame?– Prof Catanach suggests:

With all of the accounting and auditing problems bombarding us today, we should focus on the common denominator: most accounting errors and audit failures have their roots in the failure of a company’s internal controls.  

The source of accounting failures would then be management and can be found in the lack of internal controls in areas outside Internal Controls over Financial Reporting (ICRF).  Post surveys the range of issues that generate problem numbers, such as lack of internal controls outside ICFR, lack of understanding business models, pressure on inorganic growth, and exemption from even ICFR testing for small companies (up to $75M cap).

A question that comes to mind after reading the article:  if ICFR reports show the internal controls that are heavily emphasized, internally tested, externally audited, and publicly reported upon are ineffective in almost 20% of all registrants in 2010, 2011, and 2012, what do you suppose the rate of effective internal controls are over uninspected and unaudited areas such as risk management, strategic planning, M&A integration, and all the other areas of a company that need to be managed?

And now for something completely different:

Maryland Association of CPAs – Social: It’s Not An Option Anymore – Bill Sheridan says:

The social train has left the station. You’re officially playing catch-up, and it’s a game you can’t afford to lose.

He then links to 13 different webcasts to get you started on the topics of your choice.


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