April 2002 - Journal of Accountancy

If you’re like most, you’ve been astonished, disillusioned and angered as you learned of the meteoric rise and fall of Enron Corp. Remember the company’s television commercial of not so long ago, ending with the reverberating phrase, “Ask why, why, why?” That question is now on everyone’s lips. The Enron

EXECUTIVE SUMMARY STATEMENT ON AUDITING STANDARDS (SAS) no. 96, Audit Documentation, marks the first big change in the requirements auditors must observe when documenting their audit work. It provides general guidance on the nature and extent of documentation necessary to support the auditor’s report, and it reaffirms documentation’s role as

EXECUTIVE SUMMARY FRAUD COSTS U.S. BUSINESSES $600 billion each year. CPAs CAN USE PROACTIVE FRAUD-DETECTION techniques to determine when and where fraud is occurring in an organization. They and their clients then can focus on stopping current fraud and preventing it in the future. DEPENDING ON THEIR EXPERTISE and their

his is a difficult time for all of us involved with the financial reporting process. The repercussions of the Enron collapse are being felt on many levels, none more so than within the accounting profession. The AICPA shares the distress of all Americans concerning the tragic breakdowns that contributed to

customer walks hopefully into a car dealership. When the salesperson asks what she is looking for, the customer says she is tired of the standard model and wants a car with a CD player, leather seats, cruise control and a bright color. The salesperson breaks out laughing and responds, “You

irtually all accounting firms have a client recordkeeping system; sometimes the system is part of the firms’ income-tax-preparation software package or it may be a stand-alone program. Few of the databases most CPA firms already have in place provide the level of detail and flexibility an insurance practice needs. Insurance-specific

here’s good news to be had: Audited companies suffer less severe fraud losses than unaudited ones, and the overall rate of occupational fraud hasn’t changed much in the last six years. Those conclusions come from the “2002 Report to the Nation on Occupational Fraud and Abuse,” issued by the Association

EXECUTIVE SUMMARY NO MATTER HOW LARGE OR SMALL THE CATASTROPHE, being prepared with a detailed plan improves a company’s chances of survival. The plan should cover the company’s response to dealing with human losses, communications breakdowns, loss of data and business premises. THE KEY TO SUCCESS IN DEVELOPING A GOOD

EXECUTIVE SUMMARY CPAs NEED TO ADVISE COMPANIES ON appropriate disclosure to financial statement users of intangible assets, acquired either separately or as part of a business combination. AUDITORS AND CORPORATE FINANCE EXECUTIVES must be aware of an important distinction in accounting for business combinations—certain intangibles such as intellectual property (IP)