Engagement letters on comps and reviews. Oh, and don’t do ‘evergreen’ letters. Seriously, don’t.
Signed engagement letters will soon be required for reviews and comps.
Evergreen letters are a really, really bad idea.
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Audit, review, compilation, preparation. Assurance or not? Attestation or not?
Here’s a distinction between the levels of services and the assurance/attestation cutoffs.
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Audit, review, compilation, preparation. Assurance or not? Attestation or not?Read More »
Audit, review, compilation, preparation. Assurance or not? Attestation or not? Read More »
Something in London case about to go under seal
Just checking to see if anything new is showing up on a couple of cases I’m following in the federal PACER system.
Sentencing arguments were due to the court on 2/13/14 in the case of Scott London, lately a senior partner at KPMG. He was the regional audit PIC prior to getting his picture on the front page of the Wall Street Journal during an FBI recorded cash-for-inside-information payment.
On 2/13/14, the Assistant US Attorney filed an ex parte motion to place something under seal. The document description is “other” and the reason is “under seal.” Setting aside my severely limited knowledge of law and using my businessman’s understanding instead, I think that means the documents will be under seal and the reason it will be nonpublic is under seal.
My very wild guess on the contents is based on the filing taking place on the day the sentencing positions were due. My guess? The sealed document is the sentencing argument from the feds.
Your guess?
Updates:
- Sentencing watch – hearing set for 2/27
- Other minor updates – LinkedIn profile and cost of reauditing Herbalife
UPDATE on sentencing date here.
Something in London case about to go under seal Read More »
On clients accepting responsibility for reviewed or compiled financials
Our clients must accept responsibility for the financial statements, even if we draft them.
To understand this, think of the ol’ electrician or schooling illustrations.
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On clients accepting responsibility for reviewed or compiled financialsRead More »
On clients accepting responsibility for reviewed or compiled financials Read More »
Admissions in Scott London’s plea agreement: felony insider trading 14 times
Have you ever read a federal plea agreement for an individual? I’ve read court documents for criminal cases from the county where I live and civil cases at the federal level. This is the first individual criminal case from the federal level. Wow!
I just subscribed to the PACER system, which provide access to public documents in the federal court system. I’m still learning how to ride that bicycle. Looks like it will be quite useful.
One of the first things I looked at is the case of Mr. Scott London, most recently a senior level partner at KPMG, in charge of the southwest regional audit practice. As I’ve mentioned on this blog, he has pled guilty to insider trading.
The plea agreement is amazing. The phrasing is rather harsh and the admissions are exquisitely clear. I’ll share some of the things I noticed in this public document.
Admissions
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Admissions in Scott London’s plea agreement: felony insider trading 14 timesRead More »
Admissions in Scott London’s plea agreement: felony insider trading 14 times Read More »
Newest book on differences between audits, reviews, and compilations now available in print and for Nook
Print copy and Nook e-book are in addition to availability for the Kindle and another half-dozen formats.
The book is an intentionally short read at about 30 pages. The print copy has 20 pages of text. Focus is to quickly describe the differences between those levels of services using three illustrations:
- A football game – How does advancing to the 10-yard line compare to an audit?
- What would a review look like in a football game?
- Buying a used car – How does taking the car for a test drive compare to a review?
- Filling a bucket – How filling it up with water to different levels illustrates the differences between the levels of service.
It also explains the differences in plain language. Well, at least using less accountantese than you would usually get from an accountant.
This is a compilation of posts previously appearing on my blogs, with slight editing.
Where can you find the book?
Print book at Amazon here.
Nook e-book at Barnes and Noble here.
Kindle e-book at Amazon here.
Also available here in other formats:
- ePub format for your iDevices
- text
- Mobi for your Kindle device
Comments by attorney on risk management
At attorney representing a malpractice carrier had some interesting comments on managing our practices.
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Comments by attorney on risk management Read More »
2 more case studies in tragedy of fraud
For a couple of years I’ve been looking at a few specific fraud incidents as case studies of fraud in general. It has been fascinating to dive deep into an embezzlement at a nearby megachurch and a corruption case in a nearby city. I’ve blogged about those extensively and even turned my blog posts into an e-book, Tragedy of Fraud.
Two more case studies have surfaced — one I’ll just mention and the other I’ll see what I can find for several more posts.
(Cross-posted from my other blog, Nonprofit Update, because this is valuable for CPAs as well.)
“Googlable”
Here’s a consequence of fraud I’d not pondered before:
Explaining to your young children that mommy is a felon before they have the opportunity to start searching the internet. Better to explain your record before they read about it.
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2 more case studies in tragedy of fraud Read More »
Growing complexity will increase. That will make auditing even more challenging.
The overall rate of change today is increasing. This carries over to the business world. Commerce is getting more complex with every quarter that passes.
That will carry over to us as practitioners.
That’s the comment from a speaker at a recent conference.
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Growing complexity will increase. That will make auditing even more challenging.Read More »
Growing complexity will increase. That will make auditing even more challenging. Read More »
Sentencing in London CPA insider trading case set for 2-27-14
Docket for Scott I. London’s case for insider trading shows the sentencing hearing has been moved to 2/27/14. Sentencing position papers due by 2/13/14.
Case number 2:13-cr-00379-GW (I’m just learning to ride this bicycle, so that may or may not be the right citation). Or maybe it’s 2:13-mj-01058-DUTY.
Sentencing in London CPA insider trading case set for 2-27-14 Read More »
Today’s entry in the dumbest CPA competition: shorting employer’s stock, in advance of bad news, in wife’s account
Good grief. A CPA should know better. Someone who worked in public accounting really, really ought to know better. Someone sent an email telling them not to trade company stock within a specific timeframe really, really, really ought to know better.
The complaint against the accountant who didn’t know better and his unwilling wife as filed by the SEC on 1-28-14 is here. Separately, the US AG filed criminal charges, according to another article: CPA Charged with Insider Trading via His Wife’s Account.
A few highlights of the civil complaint:
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More good stuff for auditors – 1-28-14
Eight articles on the ‘net you might find helpful as an auditor –
The long simmering dispute over the PCAOB getting access to audit workpapers of firms working on China-based companies has stepped up to another level. An administrative law judge banned the China-based subs of the Big-4 from signing opinions for six months. This is several orders of magnitude removed from my practice. I’m also guessing it’s outside the practice all the readers of my blog, but that is what makes it fascinating to watch:
1-23 – Wall Street Journal – Judge Suspends Chinese Units o Big Four Auditors – Michael Rapoport gives a great overview.
1-25 – re:The Auditors – One Way or Another: The SEC Versus The Chinese Big Four Firms – Francine McKenna provides lots of quotes & links, color commentary, accompaniment of a song from Blondie (“One way or another I’m gonna find ya / I’m gonna getcha getcha getcha getcha /One way or another I’m gonna win ya / I’m gonna getcha getcha getcha getcha”), and two suggestions how the SEC could reach out and ‘getcha’ some Big 4 firms: …
More good stuff for auditors – 1-28-14 Read More »
Some thoughts for CPAs after reading the Tampa Bay Times, CIR, and CNN reporting on GIK shipments
The Tampa Bay Times has run the article they wrote with CNN and the Center for Investigative Research: No accounting for $40 million in charity shipped overseas. It looks to be the same text as in the CIR report, which I mentioned here.
(cross-posted from my other blog, Nonprofit Update, because this discussion especially applies to auditors.)
I have performed lots of audits over the years but don’t have any clients with the kind of GIK programs that have been in the news lately. That does two things. First, it frees me to pontificate and speculate because the independence rules don’t limit me in discussing an actual client situation. Second, it gives me an auditor’s knowledge, experience, and intuition to apply to the news I read.
A few thoughts for CPAs after reading the article again…
Opinion shopping.
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Compilation and Review Update
Here’s a list of recent posts describing what’s going on in the comp and review world: proposed changes to compilation rules & report; a new “preparing” service, and highlights of 13/14 Comp and Review Alert.
Proposed changes to compilation rules:
- 4 SSARS exposure drafts
- Brief summary of proposed changes to compilation rules
- Proposed revision to compilation rules, including new reports
“Preparation” of financials”
- New level of service from CPAs – “Preparing” financial statements
- Proposal for “preparation” of financial statements will require signed, written engagement letters. Same requirement will apply to compilations.
Comp and Review alert highlights:
- Comp and Review alert for 2014 available
- Frequent issues on Reviews during peer reviews – from the 13/14 Comp and Review Alert
- Frequent issues on Compilations during peer reviews – from the 13/14 Comp and Review Alert
Compilation and Review Update Read More »
Brief summary of proposed changes to compilation rules
A short article in the Journal of Accountancy provides a great summary of the likely changes to SSARS for compilations and ‘preparing’ financial statements. Check out A makeover for compilations by Mike Glynn, CPA. It is a fast read at only 700 words.
Update – See also:
Two of many key points:
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Brief summary of proposed changes to compilation rulesRead More »
Brief summary of proposed changes to compilation rules Read More »