The Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Tuesday published a document to help boards of directors strengthen their oversight of enterprise risks. The four-page paper, Effective Enterprise Risk Oversight: The Role of the Board of Directors, calls attention to COSO’s Enterprise Risk Management—Integrated Framework (2004) and
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TOPICS / MANAGEMENT ACCOUNTING
Enterprise risk management
Understanding Internal Control and Internal Control Services
This white paper written by Thomas A. Ratcliffe and Charles E. Landes and prepared by the AICPA Audit and Attestation Standards and Professional Publications teams seeks to clear up confusion among practitioners relating to the concept of internal control over financial reporting. It describes the concepts of internal control (specifically
Government
GASB released a statement that incorporates accounting and financial reporting guidance, which was previously only contained in the AICPA’s auditing literature, into GASB’s financial reporting literature for state and local governments. Statement no. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards,
Introducing the New Principles-Based Peer Review Standards
Editor’s note: G. William Graham is the AICPA Peer Review Board chair. The effects of the newly revised AICPA Standards on Performing and Reporting on Peer Reviews (Standards) will be far-reaching. They directly impact more than 30,000 firms enrolled in the AICPA’s practice-monitoring program. In addition, the revised standards
International
IFAC has published a Guide to Quality Control for Small- and Medium-Sized Practices. This nonauthoritative implementation guide is intended to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related
IFAC Publishes Guide to Quality Control For Small- and Medium-Sized Practices
IFAC has published a Guide to Quality Control for Small- and Medium-Sized Practices. This nonauthoritative implementation guide is intended to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related
ASB Issues Audit Documentation Guidance, Internal Control Standards
The Auditing Standards Board (ASB) issued the second clarified auditing standard resulting from its clarity project, which aims to make U.S. GAAP easier to understand and apply and gives each standard a principles-based objective. Statement on Auditing Standards Audit Documentation (Redrafted) supersedes AU section 339, Audit Documentation. The standard
CAQ Offers Pointers for Integrated Audits of Internal Control
The Center for Audit Quality (CAQ) issued a report highlighting lessons learned from section 404 audits of internal control over financial reporting. The nonauthoritative report, designed to help audit firms that have not yet conducted an integrated audit, as well as more experienced firms, identifies 21 practical tips for auditors.
Guidance Released on Monitoring Internal Control
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) released guidance designed to help organizations better monitor the effectiveness of their internal control systems and to take swift corrective action if needed. The guidance, developed by COSO in a project led by a Grant Thornton LLP team, recognizes
CAQ Issues Aid on Testing Journal Entries
The Center for Audit Quality issued a practice aid on testing journal entries. The nonauthoritative document is designed to be a reference for auditors of public companies when applying certain sections of AU section 316, Consideration of Fraud in a Financial Statement Audit, of the PCAOB’s interim auditing standards. It
Government
The Office of the Inspector General of the Department of Defense (DOD) launched a Web site that gives guidance on using internal controls to prevent or eliminate fraud, waste and abuse. “Fraud Indicators in Procurement and Other Defense Activities” provides common fraud indicators in contracting and other areas susceptible to
Proposed Interagency Appraisal and Evaluation Guidelines Issued
The major federal bank, thrift and credit union regulators issued proposed Interagency Appraisal and Evaluation Guidelines that clarify risk management principles and internal controls for ensuring that financial institutions’ real estate collateral valuations (both appraisals and evaluations) are reliable and support their real estate-related transactions. The proposal was issued jointly by
AICPA Issues Two Final Standards on Internal Control
The AICPA’s Auditing Standards Board issued two final standards on internal control. Statement on Standards for Attestation Engagements (SSAE) no. 15, An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements, converges the standards practitioners use for reporting on a
PCAOB Proposes Seven Auditing Standards Related to Risk Assessment
The PCAOB voted to propose a slate of seven auditing standards related to risk assessment and response. The standards would supersede the board’s interim auditing standards related to audit risk and materiality, audit planning and supervision, consideration of internal control in an audit of financial statements, audit evidence, and performing
Highlights
The AICPA’s Professional Ethics Executive Committee (PEEC) issued an exposure draft, Interpretation 101-17, Networks and Network Firms, under Rule 101, Independence, of the AICPA Code of Professional Conduct. Along with new or revised definitions for network, network firm and firm, the ED proposes that when CPA firms form
Refocusing on Reliability
EXECUTIVE SUMMARY Current technical literature precludes CPAs from performing review engagements when independence is impaired and requires modifying reports to disclose lack of independence in compilation engagements. The AICPA Reliability Task Force asserts that the conceptual foundation regarding the services CPAs provide to clients should be modified to refocus on
Managing Multiple Identities
EXECUTIVE SUMMARY Identity management addresses the difficulties encountered when one physical user has separate user IDs and passwords on multiple systems and applications. Access management addresses the challenges associated with the specific access rights and permissions of multiple user IDs. Large, complex organizations have the greatest potential to benefit from
Internal Controls
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) released an exposure draft, Guidance on Monitoring Internal Control Systems . Developed by COSO through a process led by a Grant Thornton LLP team, the guidance is designed to help organizations monitor the quality of their internal control systems. “This
Focus on Compliance
On average, compliance spending is outpacing growth of net income at the nation’s largest financial and thrift institutions. A Deloitte Center for Banking Solutions survey found that compliance spending as a percentage of net income rose to 3.69% in 2006 from 2.83% in 2002. Respondents also recognized that compliance is
Communication Is Key
Catherine Allen et al.’s article (“Navigating the Crossroads of Control and Independence ,” Dec. 07, page 42) was an excellent article clarifying the guidance in Statement on Auditing Standards (SAS) no. 112 as it applies to private company auditors’ responsibilities of communicating internal control matters. Page 46 of the article
Features
SPONSORED REPORT
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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