The SEC’s Committee on Improvements to Financial Reporting voted in January to support a slate of preliminary recommendations designed to make the information presented by U.S. public companies more useful to investors while reducing the complexity of the financial reporting system. The preliminary proposals included a call for
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TOPICS / MANAGEMENT ACCOUNTING
Enterprise risk management
Risk Assessment Standards in Action
Eight standards rolled out in 2006 by the Auditing Standards Board are sparking a cultural shift for auditors. The standards—Statement on Auditing Standards nos. 104–111—are designed to enhance auditors’ responses to audit risk and materiality and encourage them to focus on areas with the greatest risk of
An Ounce of Prevention
Sarbanes-Oxley programs that address both compliance and business objectives can help companies trim the costs of section 404 compliance. The 404 Institute’s third annual Benchmark Study found that companies with low compliance costs and more effective outcomes reported a: Higher degree of centralized transaction processing and control. Higher percentage of
Eight Habits of Highly Effective Audit Committees
EXECUTIVE SUMMARY To ensure that your committee is up to its mission, you must first define the mission by drafting a strong charter that identifies audit committee functions, authority and responsibilities, along with the skills and experience its members must possess. Success is not automatic. Specify critical
Technical Education a Must for CAEs
Chief audit executives reported relatively high competency levels in the technical areas important to internal audit but said there’s still room for improvement. The top responsibilities needing improvement were: “Need to Improve” Rank General Technical Knowledge Competency 1 COSO Enterprise Risk Management Framework 3.2 2 Enterprise Risk Management 3.6 3
Auditing
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
Internal Controls
Despite making progress in safeguarding sensitive or confidential information, the SEC still lacks consistency in implementing key data controls, the GAO said in its annual audit released in April. Information security control weaknesses identified included 13 that remained unresolved from the previous year’s audit, plus 15 new ones, the GAO
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
Automate Your Internal Controls
Overwhelmed by the documentation and testing requirements of the Sarbanes-Oxley Act? Consider these tips to automate your efforts. Use a database. Many companies document internal controls with spreadsheets. This process isn’t very secure and can quickly become cumbersome. Put the information underlying the documentation into a
The Risks of Being Global
EXECUTIVE SUMMARY Increased international trade regulations have led to greater risks for companies that do business abroad. How CPAs help companies manage these risks will vary based on the countries and products involved, the size of the company, the potential penalties and the company’s import/export structure. In going global, companies
A Very Long Audit
ALL IN A DAY’S WORK y sister, a nursing student at the time, had come to visit and arrived early enough to meet me at my client’s site. She came up to our audit room, met my fellow team members and sat at the partner’s desk, right next to mine.
On the Record
Although typically the major players have been making the headlines, defendants are coming from all types and sizes of businesses. … When it comes to corporate fraud, anyone can be a player. — Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance by Martin T. Biegelman
Data Point
NUMEROLOGY 75 Percentage of working mothers that said their bosses were supportive of their family needs. Source: This Is How We Do It: The Working Mothers’ Manifesto by Carol Evans, Hudson Street Press, 2006.
Job-Hunt Tips
TOP 10 1 | Look for opportunities. Take on new assignments to broaden your skills. Put out feelers to see whether you’re marketable outside your company. On an interview, don’t passively expect to be told where you’ll fit in. Create a job for yourself. 2 | Become a skilled job
Tips for New Leaders
TOP 10 1 | Don’t get too close too quickly. It’s tempting to become one of the gang—a friend who happens to be the boss—but effective leaders have to manage the distance between themselves and their followers. 2 | Sharpen your situation-sensing antennae. Try to be sensitive to which way
Women Pull Up a Chair
SURVEY SAVVY W omen held 14.7% of all Fortune 500 board seats, up from 13.6% in 2003 and 9.6% in 1995, according to a 2005 census of women board directors by Catalyst ( www.catalyst.org ). The number of Fortune 500 companies that had 25% or more women board directors rose
Sallie Krawcheck Quote
AS QUOTED “As an analyst I was very comfortable being uncomfortable, and as a CFO I have to be comfortable being uncomfortable. I have to be fine with delivering bad news.” —Sallie Krawcheck, CFO, Citigroup
Bookmarks
Policies and Procedures to Prevent Fraud and Embezzlement: Guidance, Internal Controls, and Investigation By Edward J. McMillan 308 pages; softcover John Wiley & Sons Inc., Hoboken, N.J., 2006 Nearly every enterprise is a potential victim of fraud, and CPAs well-versed in the scope of fraudulent activities can help businesses prepare
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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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