Editor’s note: The SEC on Wednesday unanimously proposed amendments to the broker-dealer financial reporting rule designed to strengthen audits of broker-dealers and the SEC’s oversight of the way broker-dealers handle their customers’ securities and cash. For details and a video, go to http://www.sec.gov/news/press/2011/2011-128.htm. The PCAOB on Tuesday adopted a
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Audit & assurance
PCAOB Will Weigh Audit Term Limits
The PCAOB is prepared to consider all possible means of addressing audit quality, “including whether mandatory audit firm rotation would help address the inherent conflict created because the auditor is paid by the client,” Board Chairman James Doty said Thursday in a speech at the SEC and Financial Reporting Institute
Beef Up Internal Audit
In March, Protiviti published its 2011 Internal Audit Capabilities and Needs Survey. The JofA interviewed Protiviti’s executive vice president and head of global internal audit, Robert B. Hirth Jr., CPA, for tips on how CPAs who oversee or conduct internal audits can take their group to the next level: —By
Clarified Auditing Standards: The Quiet Revolution
Over the past few years, much attention has been paid to the issue of global harmonization of generally accepted accounting principles while, at the same time, a much quieter revolution has been taking place in generally accepted auditing standards (GAAS). Over the past seven years (see sidebar, “Timeline of Clarification
Auditing
A PCAOB research note attributed instances of noncompliance with AU section 543 to the increasing prevalence of transactions the regulator classified as Chinese reverse mergers (CRMs). The PCAOB’s research assessed data from a July 2010 audit alert that had raised a concern that some U.S.-registered accounting firms may not be
CAQ Partnering to Develop Anti-Fraud Tools, Tracking PCAOB Projects
The Center for Audit Quality is partnering with Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors to develop fraud-fighting training and tools, including a series of fraud hypotheticals to be used as teaching tools. “We will provide a set of facts and circumstances
Compilation and Review
The AICPA Audit and Attest Standards Team has provided guidance, available on aicpa.org, regarding how an accountant should report when comparative financial statements are presented and the prior-year compilation or review was not performed in accordance with Statement on Standards for Accounting and Review Services no. 19, Compilation and Review
New Audit and Accounting Guide Updates Oil and Gas Reporting Procedures
The AICPA has issued a new edition of the audit and accounting guide Entities With Oil and Gas Producing Activities. The guide has been significantly revised to incorporate the provisions related to the SEC’s modernization of its oil and gas reporting disclosures, which align its disclosure requirements with current practices
SEC Report Recommends No New SOX 404(b) Exemptions
An SEC study of Section 404(b) of the Sarbanes-Oxley Act recommends no new exemptions to the requirements. The study by the SEC’s Office of the Chief Accountant was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its scope was restricted to companies with a market capitalization between
Clarified Auditing Standard Outlines Auditor Requirements Regarding SEC Filings
The AICPA’s Auditing Standards Board has finalized the clarified Statement on Auditing Standards, Filings With the U.S. Securities and Exchange Commission Under the Securities Act of 1933, to supersede AU section 711, Filings Under Federal Securities Statutes, in AICPA Professional Standards. The clarified SAS addresses the auditor’s responsibilities in connection
ASB Issues Exposure Draft to Amend Various Clarified Auditing Standards
The AICPA’s Auditing Standards Board (ASB) issued Proposed Statement on Auditing Standards, Omnibus Statement on Auditing Standards—2011, resulting from its Clarity Project. The comment period ends May 15. The proposed SAS contains amendments to the following: SAS no. 117, Compliance Audits (AICPA, Professional Standards, AU sec. 801). The amendment conforms
Accounting / Review Services
The Accounting and Review Services Committee is seeking comments on the exposure draft for Proposed Statement on Standards for Accounting and Review Services, The Use of the Accountant’s Name in a Document or Communication Containing Unaudited Financial Statements That Have Not Been Compiled or Reviewed. The proposal amends SSARS no.
Renewed Focus on Loss Contingency Disclosures
The SEC appears to be increasing its scrutiny of compliance with financial statement disclosure rules regarding potential court losses. The heightened attention is intersecting with a three-decades-old treaty for lawyers and accountants forged by the AICPA and the American Bar Association. The JofA spoke with attorney Michael Young, chair of
PCAOB: Audits of Chinese Reverse Mergers Create Compliance Concern
A PCAOB research note released on Tuesday attributes instances of noncompliance with AU section 543 to the increasing prevalence of transactions the regulator classified as Chinese reverse mergers (CRMs). The PCAOB’s research assessed data from a July 2010 audit alert that had raised a concern that some U.S.-registered accounting firms
Auditing
The PCAOB proposed for public comment a temporary rule to establish an interim inspection program for registered public accounting firms’ audits of brokers and dealers, while the board considers the scope and other elements of a permanent inspection program, consistent with the Dodd-Frank Wall Street Reform and Consumer Protection
Handling of Litigation Contingency Disclosure Facing Greater SEC Scrutiny
The SEC appears to be increasing its scrutiny of compliance with financial statement disclosure rules regarding potential court losses. The heightened attention is intersecting with a three-decades-old treaty for lawyers and accountants forged by the AICPA and the American Bar Association. The JofA spoke with attorney Michael Young, chair of Willkie
Deadline Nearing for Comments on Proposed SSARS
The Accounting and Review Services Committee is seeking comments on the exposure draft Proposed Statement on Standards for Accounting and Review Services, The Use of the Accountant’s Name in a Document or Communication Containing Unaudited Financial Statements That Have Not Been Compiled or Reviewed. The proposal amends SSARS no. 19,
Auditing
The PCAOB approved an 11.5% increase in its 2011 fiscal-year budget, a spending plan that the board says reflects its new responsibilities under the Dodd- Frank Wall Street Reform and Consumer Protection Act. The board also approved its five-year strategic plan. The $204.4 million budget is $21.1 million more than
International Greenhouse Gas Assurance Standard Proposed
The International Auditing and Assurance Standards Board (IAASB) on Tuesday released a proposed standard to provide assurance on companies’ reporting of greenhouse gas emissions, a key component in sustainability reporting. The IAASB says the proposed International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements, addresses the
PCAOB Gets New Chair, Members
The SEC has appointed James R. Doty PCAOB chairman and named Jay Hanson and Lewis Ferguson members of the board. Doty is a Washington-based securities lawyer and a former SEC general counsel. Ferguson, also a Washington securities lawyer, served for more than three years as the PCAOB’s first general counsel.
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