t takes a combination of careful observation and inquiry to conduct an effective audit. Although auditors are adequately trained to be alert at a client site, most learn on the job how to ask questions to elicit specific information.This is a matter of no small importance because CPAs frequently
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Forensic services
Retirement
A survey ( www.socialsecurity.org/dailys/07-29-02.html ) conducted during a week in July when the Dow Jones industrial average plummeted nearly 700 points found 68% of likely voters nevertheless favor letting workers invest part of their Social Security taxes in personal retirement accounts, say researchers at the Cato Institute.
Professional Issues
The AICPA is forming four panels (one for each of the proposed CPA examination sections) to help set standards for passing the computer-based exam. Qualified CPA volunteers are needed for a series of two-day standard-setting sessions between December 11 and 19. Participants should have three to seven years’ experience in
Financial Reporting
Most of the 947 companies whose CEOs and CFOs are required by the SEC to certify the accuracy and completeness of corporate financial statements met the commission’s initial August 14 deadline. To assist investors and others in tracking which of these large corporations have complied, the commission listed on its
Auditing
For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. President Bush signed into law on July 30 the Sarbanes-Oxley Act of 2002 (www.aicpa.org/info/sarbanes_oxley_summary.htm), establishing the Public Company Accounting Oversight Board,
FYI
The Senate brings the SEC to full strength by confirming the nominations of four commissioners: Paul S. Atkins and Cynthia A. Glassman of Virginia, Harvey Jerome Goldschmid of New York and Roel C. Campos of Texas ( www.senate.gov/legislative/legis_act_nominations_confirmed_civilian.html ). Atkins, Goldschmid and Campos will serve out the remainder of terms
International
The International Accounting Standards Board publishes an exposure draft of a group of proposals, First-time Application of International Financial Reporting Standards ( www.iasb.org.uk/docs/ed1/ed1.pdf ), intended to ensure that entities adopting these standards provide in their financial statements information comparable to that reported under previous standards. The board wants to make
Government
The Federal Accounting Standards Advisory Board issues Technical Bulletin 2002-1, Assigning to Component Entities Costs and Liabilities that Result From Legal Claims Against the Federal Government ( www.fasab.gov/pdf/presreltb.pdf ). According to the guidance, all such costs and liabilities must be attributed either to the component entities responsible for the programs
Fraud
The Treasury Department issues the 2002 National Money Laundering Strategy ( www.treas.gov/offices/enforcement/ml.html ), a report that describes a governmentwide effort to fight financial crime and to shut down terrorist organizations’ funding sources.
Billing Schemes, Part 4: Personal Purchases
This is the final installment in a four-part series on identifying false invoices and their issuers. The July and August columns focused on billing schemes involving shell companies criminals set up to facilitate fraud. Articles in this issue and September explain how to detect and prevent two scams that
A Perspective on Audit Malpractice Claims
EXECUTIVE SUMMARY CPAs CAN USE DATA ON AUDIT MALPRACTICE claims filed with CNA, which underwrites 22,000 CPA firms in the AICPA professional liability insurance program, to help them avoid high-cost claims when they audit nonpublic entities such as private companies, governments or NPOs. MOST NONPUBLIC AUDIT CLAIMS ARISE
Billing Schemes, Part 3: Pay-and-Return Invoicing
This is the third article in a four-part series on identifying false invoices and their issuers. It explains the pay-and-return billing scheme, in which an employee creates an overpayment to a vendor and pockets the subsequent refund. The other stories focus on shell companies (See JofA, Jul.02, page 76
Accounting
For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. AcSEC exposes a draft statement of position, Accounting for Derivative Instruments and Hedging Activities by Not-for-Profit Health Care Organizations, and Clarification
Billing Schemes, Part 2: Pass-Throughs
This is the second article in a four-part series on identifying false invoices and their issuers. July’s and August’s columns focus on billing schemes involving shell companies criminals set up to facilitate fraud. Articles in the September and October issues will explain how to detect and prevent two scams
Fraud
A GAO report ( www.gao.gov/new.items/d02676t.pdf ) on the use of purchase cards at the Education, Navy, Agriculture, Interior and Transportation departments reveals internal control weaknesses permitted thousands of unauthorized or questionable transactions between 1998 and 2001, involving potentially millions of dollars in waste and abuse. The watchdog agency discovered failures
Education
The AICPA and NASBA sign an agreement with Prometric, a designer of technology-based testing services, under which CPA candidates will be able to take a computerized uniform examination at more than 300 locations in early 2004 ( www.aicpa.org/news/2002/p052802.htm ). The electronic test will differ from its paper predecessor not only
Corporate Governance
The Business Roundtable, a trade group representing 150 of the nation’s largest companies, issues Principles of Corporate Governance ( www.brtable.org/pdf/704.pdf ). The publication provides a set of best practices for senior management, the board of directors and others in the corporate hierarchy to ensure companies comply with applicable regulations and
Government Accounting
GASB issues Statement no. 39, Determining Whether Certain Organizations Are Component Units ( www.gasb.org/news/nr052802.html ). Under it state and local governments with certain fundraising organizations, such as not-for-profit foundations that have a relationship with public universities and/or school districts, must include in their financial statements separate presentations of those subordinate
Professional Issues
The AICPA professional ethics executive committee issues an exposure draft ( www.aicpa.org/members/div/ethics/ed020617.htm ) with revisions of five independence interpretations and/ or rulings. The proposed changes relate to trustee or executor relationships with clients, former practitioners and firm independence, relationships with entities included in government financial statements, auditors of insurance companies
Employee Benefits
The Department of Labor made final a rule ( www.dol.gov/pwba/regs/fedreg/final/2002008499.htm ) giving employee benefit plan administrators the option of using e-mail, the Internet and other computer-based systems for making, to participants and beneficiaries, disclosures required by the Employee Retirement Income Security Act of 1974 (ERISA). Under the provision, which takes
Features
FROM THIS MONTH'S ISSUE
What small firm CPAs need to know
In a new JofA column, the AICPA’s small firm advocate answers questions about making A&A services and peer review more manageable, dealing with frequent tax law changes, and planning for retirement.
From The Tax Adviser
July 31, 2026
Current developments in S corporations
July 31, 2026
