SEC reacts to PCAOB

http://www.wsj.com/articles/sec-accounting-board-is-dragging-feet-1418605107 SEC expresses concern over the lack of progress by PCAOB on new rules.

Naming the audit partner

http://www.journalofaccountancy.com/News/201411417.htm The standard may become a reality in 2015. This article also details other agenda topics for 2015. And notice how PCAOB budget is declining slightly.

What the Pope had to say to accountants

http://www.cgma.org/magazine/news/pages/201411404.aspx This article highlights Pope Francis' remarks to the World Congress of Accountants, November 14. Urging accountants to "play a positive constructive role in the course of their daily work" and to bear in mind "that behind every document, there is a story, there are faces."

Happy internal auditors

http://www.cgma.org/magazine/news/pages/201411387.aspx Internal auditors who receive incentives based on profit or revenues report higher satisfaction. Check out the survey discussion of some of the results. 1600 North American internal auditors were surveyed on this and other aspects.

SEC whistleblowing tips highest in three years

http://www.reuters.com/article/2014/11/18/us-sec-whistleblower-idUSKCN0J220620141118 For Fiscal year 2014, this was the highest year of whistleblowing tips.

Independence alert for non-broker dealers and SEC-registered and state registered investment advisers

http://www.journalofaccountancy.com/News/201411389.htm In a joint alert, the CAQ and AICPA focus on independence rules for certain nonissuers.

The Fraud-resistant organization

http://www.journalofaccountancy.com/News/201411371.htm Check out this report released to show the traits of fraud resistand organizations, and the responsibilities for those in roles of the financial reporting supply chain.

Audit committee effectiveness

http://www.cgma.org/magazine/news/pages/201411364.aspx This short article includes ingredients that were discussed at the 2014 World Congress of Accountants about effective audit committees.

Whistleblowers can be costly

http://www.complianceweek.com/blogs/enforcement-action/study-whistleblowers-are-even-more-costly-than-you-thought#.VGOW5PnF9Np See this article highlighting recent research.

Tesco accounting scandal

http://www.telegraph.co.uk/finance/comment/11214948/Unanswered-questions-in-Tescos-accounting-scandal.html Interesting wording that PWC had included around "potential for manipulation". Revenue and collection of impairment issues are both addressed in this article. The SFO (Serious Fraud Office) has its hands full.

SSARS 21 a significant revision to nonaudit standards

http://www.journalofaccountancy.com/News/201411156.htm The use of cloud technology has blurred the lines of who prepared the financials. This standard attempts to provide guidance in the area of accounting and reviews, preparation, and compilation, with inclusion of sections 60, 70, and 80 respectively. Implementation date is for periods ending on or after 12/15/15 although earlier implementation is encouraged for those smaller firms seeking efficiencies.

COSO's ERM framework to undergo update

http://journalofaccountancy.com/News/201411173.htm Announcement of efforts to update this framework. Also a link to AAA FAQs on this. http://aaahq.org/newsroom/COSO_102114_faq.htm Looks like PWC will be having a primary input to this endeavor under COSO direction.

AICPA Council Resolution on Form and Name of Organization

http://journalofaccountancy.com/News/201411087.htm To amend the AICPA Code of Conduct list of attest engagements in order to comply with the Uniform Accounting Act definition of attest engagements. Add PCAOB engagements and engagements in accord with SSAE standards

The role of internal audit in risk management

http://ww2.cfo.com/risk-management/2014/10/internal-audit-play-bigger-role/ This article stems from recent survey perceptions gathered by PWC about the importance of IT risk and the role of internal auditors in this area. The article makes a call for involvement in the entire data cycle.

Looking at risk in the SEC Form 10-K

http://ww2.cfo.com/gaap-ifrs/2014/10/grad-students-aim-to-shake-up-10-ks-risk-factors/?utm_campaign=CFOWeekly&utm_source=CFO-email&utm_medium=email&utm_content=CFOWeekly_Friday_2014-10-10&utm_term=the-economy Making the 10K suited for investor review was the aim of the winning MBA team related to a competition that had participants (4 two person teams) reviewing hundreds of 10K reports. This was the Initiative on Rethinking Financial Disclosure. Stratifying the discussion of risk factors, and providing an executive summary were two of the suggestions. An advisory committee of former SEC commisioners and other notables as well as the judges hopefully may see that some of the recommendations are taken further beyond the competition.

Audit fees in 2013

http://www.journalofaccountancy.com/News/201411070.htm According to a recent survey, regulation and inflation have driven up audit fees in 2013.

PCAOB and naming of audit partner

http://www.journalofaccountancy.com/News/201411064.htm PCAOB seeks public comments on a proposal to use "Form 5" to be filed with SEC shortly after the 10K, that would name audit partners, rather than names included within the audit report. This subject has been a topic of interest since 2009. CAQ supports this twist.

What Board members are doing about fraud risk

http://www.cgma.org/magazine/news/pages/201411058.aspx A survey indicates Board members are reaching out beyond the executive level, having more discussions about tone at the top and insider trading controls. Also read to see what they are saying about their understanding of risk appetite.

Fraud reporting per 2014 survey

http://www.complianceweek.com/blogs/the-filing-cabinet/report-fraud-and-retaliation-on-the-rise#.VCrkXvldXDZ Fraud and retaliation against whistleblowers who report the fraud is increasing according to the 2014 Compliance Report compiled by The Network. This is an all-time high since the first report in 2005. Mobile reporting applications are a way this is being reported.

Fair value deficiencies and auditors

http://www.accountingtoday.com/news/auditing/fair-value-audit-deficiencies-remain-high-at-firms-72141-1.html This area of fair value merits continued attention by auditors to the assessment of risks and internal controls

Going concern evaluation per PCAOB

http://www.journalofaccountancy.com/News/201410985.htm Changes in GAAP have not altered the responsibilities of the auditor in going concern evaluation and communications. The explanatory paragraph may still be a necessity in the audit report. This is to distinguish between the management's responsibility for disclosure and the auditor's responsibility

SEC to pay whisleblower award

http://www.journalofaccountancy.com/News/201410983.htm $30 million award is twice the previous record amount

Chartered Institute of Internal Auditors

http://auditandrisk.org.uk/magazine This is the magazine published by the Chartered Institute of Internal Auditors

Andrew Madoff passes away at age 48

http://www.washingtonpost.com/national/andrew-h-madoff-son-of-convicted-financier-dies-at-48/2014/09/03/49c10da4-0e81-11e4-b8e5-d0de80767fc2_story.html The only remaining son of Bernie Madoff died Sep 3, 2014.

Fluctuating currencies and fraud

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/FVSNews/FluctuatingCurrencies.jsp In this area, highlight of issues and fraud possibilities.

Wired auditing

http://www.aicpa.org/InterestAreas/FRC/AssuranceAdvisoryServices/DownloadableDocuments/Whitepaper_Blue_Sky_Scenario-Pinkbook.pdf Audit teams will be able to audit on an ongoing basis. This white paper highlights opportunities.

Progress and issues toward COSO framework adoption

http://www.complianceweek.com/blogs/the-big-picture/dispatches-from-the-front-on-coso-implementation#.VBBqX_ldU2F This article discusses anecdotal evidence and matters pertaining to the progress for COSO. What does the adoption really mean to those implementing it

Audit committee disclosures

http://www.ey.com/Publication/vwLUAssets/ey-lets-talk-governance-august-2014/%24FILE/ey-lets-talk-governance-august-2014.pdf More companies disclosing this information. Related article at http://ww2.cfo.com/auditing/2014/09/fortune-100-disclosing-audit-committees/

PCAOB issues staff audit alert for revenue recogntion

http://www.journalofaccountancy.com/News/201410901.htm See this discussion in the article with a separate link to the audit alert. Revenue recognition, long noted as a source of critical importance during the audit.

Adopting the new COSO framework

http://www.complianceweek.com/blogs/accounting-auditing-update/auditors-may-disclose-companys-framework-choice-in-audit-reports#.VAzdA0jc2gc Firms adopting the new COSO framework are doing so for a number of reasons, per Deloitte & Touche alert. Auditors are to note in their audit reports if not adopting the current framework.

$300,000 whistleblower reward paid by SEC

http://ww2.cfo.com/regulation/2014/08/sec-dishing-300000-whistleblower-award-internal-auditor/ The reward was paid to an internal auditor who took actions when in-house management failed to act on the finding.

Group audits - component

http://www.journalofaccountancy.com/News/group-audits-201410712 This is the second article on group audits published by the Journal of Accountancy. This is a discussion of component materiality, and the qualitative considerations in determining materiality.

12 Principles of the Internal Audit Framework

http://www.journalofaccountancy.com/News/201410699.htm This is proposed guidance, along with a new mission statement. The 12 principles are seen to enhance internal audit effectiveness. Comments are due by Nov 3, 2014.

Preventing vendor related fraud

http://cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/CorpFin/stealing-in-plain-sight.jsp The prevention and detection of vendor fraud are addressed in this article.

Stakeholders have different expectations

http://www.complianceweek.com/blogs/accounting-auditing-update/study-puts-internal-audit-focus-on-managing-expectations This summary and reference to the PWC report on stakeholder expectations for internal audits

PCAOB Disciplinary Actions against PWC audit partner

http://accounting.smartpros.com/x76068.xml Discussion and link to the disciplinary actions related to an improper revenue recognition audit failure

GAO identified internal control issues with IRS

http://www.accountingtoday.com/news/irs_watch/gao-sees-need-for-improvement-in-irss-internal-controls-71213-1.html The GAO report is located http://www.gao.gov/assets/670/664599.pdf

Fraud fighting steps from Crowe Horwath

http://www.cgma.org/Magazine/News/Pages/201410164.aspx?TestCookiesEnabled=redirect Keeping the balance between a warm attitude with clients and not getting "too comfortable" has never been easy. See the few steps outlined in this report.

Auditor reporting model changes

The Center for Audit Quality has done field testing of 51 companies related to the audit "critical matters" change. This article discusses the findings. http://www.journalofaccountancy.com/News/201410377.htm

Disclosures for the revenue recognition standards

The expanded disclosures required by the new standard are discussed here. http://www.journalofaccountancy.com/News/201410313.htm

revenue recognition

Resources related to revenue recognition standard http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/RevenueRecognition/Pages/RevenueRecognition.aspx

Related party transactions

http://www.journalofaccountancy.com/News/201410276.htm PCAOB is considering adopting new related party transaction audit rules next week. This standard was re-proposed in May of 2013, after comments from the 2012 proposal. There have been two rounds of comments thus far.

A fraud IQ quiz

This Journal of Accountancy article has a short 8 question quiz (with answers) on interviews related to fraud. http://www.journalofaccountancy.com/Issues/2014/Jun/20149666.htm

Challenges discussed for the telecommunications industry

Predicted issues for revenue recognition in the telecommunications industry. This podcast by ATT Accounting director presents some of the issues. http://jofa.podomatic.com/entry/2014-05-29T12_58_17-07_00

Companies face internal control compliance challenges

A survey of 600 audit executives indicated 48% had not yet begun to implement the new COSO internal control framework changes. Other challenges were discussed with PCAOB, and SOX compliance. http://www.accountingtoday.com/news/sarbanes_oxley/companies-face-compliance-challenges-from-sox-pcaob-and-coso-70779-1.html

Preparing for the revenue recognition standard

This Journal of Accountancy article highlights some of the issues for implementing the new revenue standard. http://www.journalofaccountancy.com/News/201410219.htm

4 broad types of indicators of audit quality

have been suggested by the Center for Audit Quality. 1. Leadership and tone at the top 2. engagement team knowledge, experience and workload. 3.Monitoring 4. Auditor reporting. The Center intends to pilot test these indicators with audit committees. http://www.journalofaccountancy.com/News/201410007.htm

SOC reports and the cloud

See this AICPA discussion about SOC reports The link is http://blog.aicpa.org/2014/03/before-your-clients-run-to-the-cloud-remember-soc.html#sthash.fWdXavzS.hGExjdpZ.dpbs

About the term "audit failure"

PCAOB member expresses concerns about the use of the term. http://journalofaccountancy.com/News/20149822.htm

PCAOB educates about the difference

in registration versus a firm that undergoes inspections. The concern stems from noting some auditors that attempt to use the mere fact of registration as a marketing point. http://www.reuters.com/article/2014/03/17/us-usa-auditor-regulations-idUSBREA2G17C20140317

Pricing when a former auditor on the Board of Directors

http://www.complianceweek.com/study-links-audit-fee-pressure-to-quality-restatements/article/337248/ This study on audit fee pressure had an interesting exception when the ex-auditor was a member of the Board.

Identifying Group audits

The identification of group audits is a key planning activity in the audit. From there, assessment of the risk entailed in any component audits is an important consideration. This change may be relevant in terms of increased audit procedures as compared to prior years.   At a minimum, there needs to be analytical procedures performed by the group auditor even on those components deemed not significant.  http://journalofaccountancy.com/News/20149529.htm

Audit failure rate questionable

Two researchers pose their opinion of the recently touted high audit failure rate by PCAOB.    See their discussion. http://ww2.cfo.com/auditing/2014/02/pcaobs-audit-failure-rate-highly-suspect/

IAASB Audit Quality framework

International framework and audit quality http://journalofaccountancy.com/News/20149626.htm

Data mining tips for the vendor list

This short article has some things to be on the lookout for when considering fraud.
http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/CorpFin/review-master-vendor-list.jsp

The use of internal auditors

This standard makes use of the concept of a systematic and disciplined approach, which is based on the International Standard 610 that was modified in 2013.   For more information on the standard effective for audits for fiscal periods ending after 12/15/14 and a link to the executive summary check the following
http://www.journalofaccountancy.com/News/20149584.htm

Extended comment period for PCAOB

engagement partner Identification proposal http://www.journalofaccountancy.com/News/20149526.htm

Results from KPMG Audit Committee Institute Report

This link contains a digest of where it is recognized that audit committees feel like they are doing a good job.   But the challenges and concerns that could land a company on the front page of news relate to security issues.   http://www.complianceweek.com/the-audit-committee-conundrum-it-risks/article/331247/

European audit proposal moves ahead

Draft has been approved - final vote coming in April 2014 http://journalofaccountancy.com/News/20149495.htm

An ethical dilemma app

You can use the online version without a download, to see how it works.  It is based in UK, but has interesting situations highlighted.   http://www.saynotoolkit.net/

Will such things ever take the place of paying attention to that feeling in your gut?   Still when alone in the midst of a decision, another perspective may be helpful.

Cheating and "the high" that can come with it

Implications for fraud and for CPAs in this piece   http://blog.aicpa.org/2014/01/cheaters-high-lets-talk-about-the-auditors-high.html#sthash.SxdhMLZJ.dpbs

PCAOB and Grant Thornton

High  failure rate given to the firm for audits done in 2012 as per article http://www.complianceweek.com/pcaob-gives-grant-thornton-record-failure-rate/article/328793/

Here is copy of the report
 http://pcaobus.org/Inspections/Reports/Documents/2013_Grant_Thornton_LLP.pdf

Comfort letters

A helpful series of links and resources are available at this post.   Caution when providing comfort letters.   http://blog.aicpa.org/2014/01/trust-but-verify-another-perspective-on-comfort-letters.html#sthash.D0UcIgnu.9ZLgunkD.dpbs

Reactions to PCAOB plan for increased audit disclosures

This inclusion of critical audit matters is meeting with resistance from some preparers.   http://journalofaccountancy.com/News/20149360.htm