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
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Audit & assurance
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.
News Highlights for January 2011
FASB issued a discussion paper to gather input from stakeholders about the time and effort that will be involved in adapting to several anticipated new accounting and reporting standards and when those standards, which are part of the FASB and International Accounting Standards Board (IASB) convergence projects, should be
Auditing
The Auditing Standards Board issued Interpretation no. 1, “Reporting Under Section 112 of the Federal Deposit Insurance Corporation Improvement Act,” of AT section 501, An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements (AICPA, Professional Standards, vol. 1). The
PCAOB Proposes Interim Program for Inspection of Broker-Dealer Audits
The PCAOB on Tuesday 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
AICPA Questions Costs/Benefits of EC Audit Proposals
In its response to a recent European Commission (EC) green paper, Audit Policy: Lessons from the Crisis, the AICPA said that any resulting recommendations for improvements to the audit profession should be subject to robust cost/benefit analyses and impact assessments. The Institute also challenged any implication that the “audit profession
Broker-Dealer Audits, Reporting Model on PCAOB Agenda
Broker-dealer audits, the auditor’s reporting model and foreign inspections will be among the PCAOB’s top priorities in 2011, according to the board’s acting chairman, Daniel L. Goelzer. The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the board authority over auditors of all SEC-registered securities broker-dealers. Those auditors had previously
Exhibit Issued for AICPA Audit Guide Compilation and Review Engagements
The AICPA issued an exhibit to help answer questions regarding the impact of Statement on Standards for Accounting and Review Services (SSARS) no. 19, Compilation and Review Engagements, on compilations and reviews of personal financial statements. The Accounting and Review Services Committee issued SSARS no. 19 in December 2009, making
Auditing
The PCAOB released a report in September that looks at risks and challenges the economic downturn created for audits of financial institutions and other companies. “This report provides illustrative examples of the kinds of issues our inspection program has uncovered during the past three years as a result of the
Proposed Changes to GAO’s Yellow Book Promote Harmonization of Auditing Standards
In August, the Government Accountability Office (GAO) issued proposed standards revising Generally Accepted Government Auditing Standards (GAGAS), commonly known as the “Yellow Book.” The update revises the July 2007 Yellow Book and is expected to be effective for audits beginning after Dec. 15, 2011, with the exception of the financial
PCAOB’s 11.5% Budget Hike Includes Dodd-Frank Costs
The PCAOB on Tuesday 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
ASB Issues Interpretation Regarding Insured Depository Institutions
The Auditing Standards Board has issued Interpretation no. 1, “Reporting Under Section 112 of the Federal Deposit Insurance Corporation Improvement Act,” of AT section 501, An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements (AICPA, Professional Standards, vol. 1).
Court Rules on Question of Wrongdoing Companies Seeking Damages From Auditors
Editor’s note: This is a report from AICPA General Counsel and Secretary Richard I. Miller, Esq. The New York Court of Appeals held recently that the in pari delicto (literally, “in equal fault”) defense is a complete bar to recovery of damages by a wrongdoing corporation against its outside auditors,
AICPA Seeks Further Guidance From Regulators on New FHA Program Requirement
The U.S. Department of Housing and Urban Development (HUD) issued notice of a Federal Housing Administration (FHA) program change as a result of Mortgagee Letter 2009-31, “Strengthening Counterparty Risk Management,” issued Sept. 18, 2009. This policy change affects all supervised mortgagees. Effective for fiscal years ending on or after Jan.
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