(Cross posted from my other blog, Nonprofit Update.)
Tragedy of Fraud – The Ripple Effects from Fraud and the Wages Earned will be released soon in Kindle format. This is a compilation of blog posts about the damage caused by fraud. It will also discuss the fraud triangle.
The sections of the book are:
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‘Tragedy of Fraud’ in e-book format – soon to be releasedRead More »
(Cross-post from my other blog, Nonprofit Update.)
Dear colleagues:
If you would like some background on the GIK issues, please read my open letter to your clients.
The accounting is problematic for donated pharmaceuticals that you have been auditing for the last few years.
If you have a budget of 100 or 300 hours, it might be wise to allocate a few hours to read beyond AICPA risk alerts and Accord position papers. You can browse my blog for discussions, which contain links to other resources that also discuss the accounting and valuation issues.
It is my considered opinion that many of the valuations are not supportable under GAAP. The timing of SFAS 157 isn’t the issue.
The amount of scrutiny on your client’s valuation methodologies is high and increasing.
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An open letter to the CPAs who audit R&D charities receiving GIK medsRead More »
(Discussion in a previous post is moved into this new post because the old post wasn’t displaying correctly based on feedback I’ve received.)
Time to start thinking about the big changes to audit rules that go into effect for our 12-31-12 audits.
The AICPA has a good roadmap in the May 2012 Journal of Accountancy: Auditing transition
The suggestions:
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Roadmap to implementing the clarified audit standards and tools to read the mapRead More »
(Links deleted and text of this post moved to a new post since this one is not displaying correctly based on feedback I’ve received.)
Time to start thinking about the big changes to audit rules that go into effect for our 12-31-12 audits.
The AICPA has a good roadmap in the May 2012 Journal of Accountancy:
Auditing transition
The suggestions:
…
Roadmap to implementing the clarified audit standards and tools to read the mapRead More »
I have a post at my other blog, Nonprofit Update which provides an analogy to illustrate the differences between the levels of attestation services provided by CPAs:
Evaluating a used car as an illustration of the differences between compilation, review, and audit
The analogy compares three different ways to figure out the quality of a car. I suggest each of those ways is similar to a level of service. Here’s the conclusion:
Check out the full post for more details on the analogy.
Sometimes you get fun results when you look at two news articles side by side. Let’s look at the responses of securities regulators in the US, China, and Japan. Hat tip to Going Concern for highlighting the articles.
Olympus fine
Japan’s securities market regulator proposed a fine of $2.5M against Olympus for conducting a $1.7 billion financial fraud that was spread over 13 years – Japan market watchdog recommends $2.5 million fine for Olympus.
Let’s put that proposed fine into perspective. All amounts will be in US dollars.
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The Wall Street Journal headline says Panel Clears Ernst & Young in Olympus Probe.
Cool update on the investigation, huh? An official panel looks at E&Y’s role and concludes their auditing was okay. They have no legal liability.
I was quite interested in the article. Then found out the details.
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Panel clears E&Y over Olympus auditing – far less to the report than meets the eyeRead More »
If you report on financial statements with a restatement of prior year numbers, you may have to notify the CBA.
The board has a very brief summary of the three circumstances when you have to notify them in the current issue of their newsletter, Update. You can see the short article on page 10 of this issue.
Here is my really fast summary –
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Reporting restatements to the California Board of AccountancyRead More »
SAS 122 has been issued by the Auditing Standards Board. That document replaces every one of the current SASs, except for numbers 51, 59, 65, 87, 117, 118, 119, and 120.
The clarified SASs, all 39 of them, will go into effect for your audits of 12-31-12 financial statements (okay, okay, the technical cutoff is financial statements ending on or after 12-15-12).
That means for your audits in 2013, you will have to be up to speed on the new SASs in the new-and-improved GAAS body of knowledge.
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Entire body of GAAS has been replaced (except for 8 SASs)Read More »
Just noticed today the new General Audit Risk Alert is available. If you are an auditor this is something you should be reading every year. (If your firm doesn’t provide you a copy, go get one yourself. You are in charge of your professional growth.)
Here is a link and the full title: General Accounting and Auditing Developments – – 2011/2012 Audit Risk Alert.
Might be worth getting the hot-off-the-press risk alert. Order it now and you could read it in November to incorporate into planning during December for audits in January and February. …
In a webcast on August 31, 2011, Mr. Michael Glynn, CPA, of the AICPA staff, gave a wonderful word picture of the levels of assurance in a review and audit. Here’s his idea: Filling up a bucket with procedures produces different levels of assurance. I would like to expand Mr. Glynn’s description and provide an illustration.
Notice the similarity and difference? The overlap between these definitions is how much assurance the accountant provides obtains that there are no material errors in the financial statements.
The differences? …
Dr. Tom Selling offers hypothetical resolutions to how mandatory auditor rotation might play out when a bank is sitting on a lot of bonds that are only worth half of face value.
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A skeptical reason mandatory auditor rotation won’t improve auditsRead More »
Jim Peterson points out several rather severe problems with mandatory firm rotation.
Mandatory Auditor Rotation – The PCAOB Sails Off the Charts into the waters where
the legend written on the old flat-earth maps – that beyond the horizons of ignorance, (says) “there be dragons.”
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Other than being almost impossible to implement, audit firm rotation is a great ideaRead More »
Still quite iffy. PCAOB is thinking about maybe asking for reaction to the idea. A long way from implementation, but it is the next step on that path.
John Hufnagle has a few more words on the topic at Audit Firm Rotation – The Train Is Starting Its Engine. Gotta’ love the title of his post!
I think it is a bad idea. …
Reservations are surfacing about the idea of mandatory auditor rotation, particularly for the really big companies. That is an idea being pushed by the PCAOB. See previous post.
Jim Peterson, at Re:Balance, has a long list of concerns with the idea, as discussed in his post Mandatory Auditor Rotation – – Further Thoughts on PCAOB Chairman Doty’s Bad Idea.
My summary of a few of his ideas:
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