The AICPA’s Private Companies Practice Section created an online toolkit devoted to Statement on Auditing Standards no. 112, Communication of Internal Control Related Matters Identified in an Audit. SAS 112 is effective for audits of periods ending on or after Dec. 15, 2006. The toolkit includes talking points, sample client
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Audit & assurance
A Risk-Based Approach to Journal Entry Testing
EXECUTIVE SUMMARY The top-side journal entry is most susceptible to fraud by management override. It’s possible to make adjustments in subledgers, but this requires collusion with other organizational departments, which is much harder to accomplish. The most frequent types of management fraud involve fictitious or premature
IFRS: Coming to America
EXECUTIVE SUMMARY International Financial Reporting Standards (IFRS) are destined to be the lingua franca of the international accounting world. Approximately 100 countries already require, allow or are in the process of converging their national accounting standards with IFRS. FASB and the IASB have agreed to converge
Auditing
The PCAOB for a second time delayed application of Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles, to situations where firms provide tax services to a client before they become the client’s auditor. The audit independence rule, which forbids firms from providing tax services during an “audit
Highlights
Eight states have introduced “no notification” legislation since early 2007 as part of an effort to implement a uniform approach to cross-state mobility through the concept of substantial equivalency. The legislation in Hawaii, Indiana, Maine, Missouri, Oklahoma, Rhode Island, Tennessee and Texas, if passed, would remove the
Mining Audit Research
This column is the first of a series that will review accounting research journals to distill practical pointers for busy CPAs. The resulting summaries offer useful suggestions practitioners can apply immediately to day-to-day activities. This installment is devoted to auditors in the field. “Audit Partner
AICPA Files Briefs in Securities and Malpractice Cases
From time to time, the AICPA’s Office of General Counsel files amicus curiae (friend of the court) briefs in matters that could affect the profession. I would like to inform you of two such recent filings. The first was to the U.S. Supreme Court; the other was
International
The International Auditing and Assurance Standards Board (IAASB) released as final its first four International Standards on Auditing (ISAs), which were redrafted as part of a comprehensive program to enhance the clarity of its standards. The IAASB, an independent board of the International Federation of Accountants, also approved amendments to
Auditing
SAS no. 114 is effective for periods beginning on or after December 15, 2006. It is summarized at http://tinyurl.com/y4pzvp and can be ordered (product no. 060709) at www.cpa2biz.com . The AICPA staff has developed an audit risk alert to aid auditors in applying SAS no. 112, Communicating Internal Control Related
Highlights
HIGHLIGHTS The SEC enhanced the Internet-based search capability of its EDGAR database of company filings. Users now can search the contents of disclosure documents with a full-text search tool. The newly searchable information includes registration statements, annual and quarterly reports and other filings by companies and
New Fraud Guidance
January 2006 > New Fraud Guidance COMPILATIONS / REVIEWS Communication is the name of the game where fraud is suspected. New Fraud Guidance BY J. RUSSELL MADRAY EXECUTIVE SUMMARY SSARS NO. 12, Omnibus Statement on Standards for Accounting and Review Services—2005, amended SSARS no. 1, making specific changes
One Space or Two
ONE SPACE OR TWO? In “ When Did the World Change? ” ( JofA , Oct.06, page 13) the letter writer asked, “When did the world change from two spaces after a period to one? More important, why did it change?” With the transition from monospaced typefaces, such as on
Assessing and Responding to Risks in a Financial Statement Audit: Part II
EXECUTIVE SUMMARY The Auditing Standards Board issued eight standards with new guidance for auditors assessing risks and controls in financial statement audits. Auditors must consider risk and also determine a materiality level for the financial statements taken as a whole. Auditors are required to obtain a
Data Point: 245
The number of public companies that went private in 2004— up from 143 in 2001, according to the Government Accountability Office (GAO)—due largely to the cost of Sarbanes-Oxley compliance.
Tips for Supervising Employees
TOP TEN 1 | Hire carefully. Hire for attitude; train for skills. You are better off with an employee who has a good attitude and really wants the job than one with a bad attitude who may be more knowledgeable. 2 | Establish workplace standards. Communicate your expectations. Make it
A CPA in Every Pot?
SIGN OF THE TIMES ooking for a new job that will be a real challenge? How about president of the United States? Don’t let a lack of political expertise stop you—the American public appears to prefer to see a businessman get the nation’s top job. In a February FOX News/Opinion
MD&A Report Card
ON THE RECORD What is the state of MD&A disclosure? The staff in the SEC’s Division of Corporation Finance reviewed over 6,000 public companies’ filings last year. They tell me that generally, MD&A has improved. In many instances companies are better explaining their financial statements, providing and clarifying context and
A Raise in Your Allowance
BUSINESS TRENDS L ike the corn in Oklahoma, gas prices are as high as an elephant’s eye this summer—and that’s a hardship for those who do a lot of driving for their employers. The IRS already has upped the deduction unreimbursed travelers can take to 44.5 cents a mile. Now
Companies Boost 401(k) Participation
SURVEY SAVVY E mployers can help workers grow their retirement savings through a few simple strategies: introducing automatic enrollment in the company’s 401(k) plan, simplifying plan choices and better communicating the benefits. A May study by Hewitt Associates ( www.hewitt.com ) found that, in companies that had instituted automatic enrollment,
The Power of Politeness
GOLDEN BUSINESS IDEA Business etiquette expert Barbara Pachter, author of When the Little Things Count…and They Always Count, says being polite helps build up “politeness credits.” Here are her suggestions for nine polite business practices: 1 | Use polite words. Simple words such as “please,” “thank you” and “you’re welcome”
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How to find the right CAS clients
The key to success with CAS is selecting the best clients. Tools like ideal client profiles (ICPs), buyer personas, and even artificial intelligence can help identify the businesses that best fit each CAS practice.
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