Several corporate governance developments have occurred in the wake of the high-profile scandals of the past decade. Some of these developments are motivated by legislation such as the Sarbanes-Oxley Act of 2002 (SOX). Others are best practices enhancements intended to shore up investor confidence. Academic research has monitored these developments.
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TOPICS / MANAGEMENT ACCOUNTING
Enterprise risk management
Auditing
The PCAOB adopted a temporary rule to establish an interim inspection program for registered public accounting firms’ audits of securities brokers and dealers as permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The board adopted without material change a proposed temporary rule (tinyurl.com/6x47nh5) issued Dec. 14, 2010.
Ferret Out Fraud
Fraud poses a critical risk to organizations. Management can help mitigate that risk through a number of strategies designed to provide employees with multiple ways to report concerns about fraud or other misconduct. —These recommendations come from the book Managing the Risk of Fraud and Misconduct in a chapter written
Lessons on Managing Risk in Emerging Markets
In recent years, as economies in developed countries have slipped and stagnated, a number of U.S. and other companies have sought to fuel growth by investing in emerging markets. There are many benefits to employing such a strategy: By and large, developing countries promise access to new, untapped markets; rising
PCAOB Proposes Standards for Broker-Dealer Audits and Auditing Supplemental Information
The PCAOB issued proposed standards for audits of broker-dealer and issuer engagements for public comment Tuesday. The proposals consist of two attestation standards related to the auditor’s examination of compliance reports and review of exemption reports of broker-dealers proposed by the SEC as part of its amendments to the broker-dealer
PCAOB, SEC to Meet With Chinese Officials on Auditing Oversight
The PCAOB said Wednesday that a joint PCAOB-SEC delegation will meet next week in Beijing with representatives of China’s Ministry of Finance and the China Securities Regulatory Commission (CSRC) to discuss issues relating to auditing oversight. “This meeting is the commencement of our accelerated efforts with the People’s Republic
PCAOB Chairman Calls for More Global Cooperation on Audit Regulation
When national regulators cooperate and share information, investors everywhere benefit from the enhanced protection such communication provides, said PCAOB Chairman James Doty in a speech Thursday to the Federation of European Accountants (FEE) Conference on Audit Policy in Brussels. “In a crisis, when a nation’s (or a region’s) economic well-being
Expanding Service Organization Controls Reporting
Several prominent internal control breakdowns and increased focus on internal control by regulators, boards of directors and others charged with governance have led to increased demand for attestation reports on controls over subject matter other than financial reporting provided by an independent CPA. Neither Statement on Auditing Standards (SAS) no.
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
COSO Publishes New ERM Implementation Guidance
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Tuesday released two new thought papers relating to enterprise risk management (ERM) and aimed at providing guidance to help organizations advance their ERM programs. The first thought paper, Embracing Enterprise Risk Management: Practical Approaches for Getting Started, describes how an
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
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).
Financial Regulatory Reform: What You Need to Know
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July, will create new regulations for companies that extend credit to consumers, exempt small public companies from Sarbanes-Oxley section 404(b), make auditors of broker-dealers subject to PCAOB regulation and change registration requirements for investment advisers. The profession
PCAOB Focusing In on SOX Provisions
The PCAOB on Thursday issued a release discussing certain provisions of the Sarbanes-Oxley Act of 2002 (SOX). The two-part release focuses on the application of the act’s section 105(c)(6), which authorizes the PCAOB to sanction registered firms and their supervisory personnel for failing to “reasonably supervise” associated individuals who violate
Little Change for PCAOB Under High Court Ruling
The Supreme Court’s 5–4 decision Monday in the constitutional challenge to the PCAOB will leave the agency virtually unchanged. The court’s ruling will not affect day-to-day operations of the PCAOB, the agency said. Chief Justice John Roberts wrote the majority opinion. In it, he said the court was isolating, or
Firm Up Your Data Security
Given the many threats organizations face in protecting critical information and processes, an information security policy is arguably one of the most important documents an organization can create. Consider these best practices for creating a new security policy and keeping an existing policy up to date. —By Ron Box, CPA/CITP/CFF,
Comment Deadlines Nearing for Certain Clarified Exposure Drafts
The Auditing Standards Board recently issued additional Proposed Statements on Auditing Standards resulting from its clarity project, through which all of its auditing standards will be redrafted over the next one to two years. The goal of the clarity project is to make auditing standards easier to read, understand and
Internal Control: Test Your Knowledge
Today many companies recognize the desirability as well as the requirement to have an effective system of internal control. Yet, designing and implementing a cost-effective system of internal control is a daunting, if not overwhelming, task. One way to overcome resistance to internal control is to educate stakeholders at every
Risk-Based Audit Best Practices
The aim of the risk assessment auditing standards was to improve the quality and effectiveness of audits by substantially changing audit practice. Statements on Auditing Standards nos. 104–111 provide increased rigor to the audit process in a number of key areas including the assessments of inherent and control risks and
Small Public Companies Have Six More Months to Meet SOX Internal Controls Requirement
The SEC on Friday announced that the smallest public companies have six more months to provide audited assessments on the effectiveness of their internal control over financial reporting. Under section 404 of the Sarbanes-Oxley Act, public companies and their independent auditors are each required to report to the public on
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Preparing clients for new provisions next tax season
As the 2025 filing season approaches, H.R. 1 introduces significant tax reforms that CPAs must be prepared to navigate. These legislative changes represent some of the most comprehensive tax updates in recent years, affecting both individual and corporate taxpayers. This report provides in-depth analysis and guidance on H.R. 1.
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