Topic: audit

Something Cool: Mind-Mapping the Big Four Scandals

It started as a rivalry between two brothers. One of them worked at one of the Big Four (still does). And he was always making jokes about the other firms’ scandals.

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Trickle-Down Audit Economics: CPAs Cut Fees to Clients’ Suppliers

Economies of scale found in supply chain. Audit fees can be costly for many public and private companies, but an accounting professor has discovered a way they save some money when going through the process.

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Auditors Beware: Even Hedge Fund Execs Don’t Trust Hedge Fund Execs

In a new study that even the hedge fund trade association calls “troubling,” hedge fund executives say corruption, misconduct and pressure to break the rules are rampant and routine in their business. The top ten findings include: 46% of respondents reported that their competitors likely have engaged in unethical or illegal activity in order to be successful. 35% of respondents reported feeling pressured by their compensation or bonus plan to violate the law or engage in unethical conduct, while 25% of respondents reported other pressures that might lead to unethical or illegal conduct. 30% of respondents reported that they had personally observed or had first-hand knowledge of wrongdoing in the workplace.

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Fraud: The 15 Biggest Risks for 2013

Warning: This article will make you question your controls and audit procedures. by Gary Zeune, CPA Managing Director, The Pros & The Cons Most risk is not in the accounting records. Why not? Because the vast majority of our work as CPAs involves monetizing and measuring activities that have already occurred. The risk starts before we do our job. Think recording sales, not making sales. In manufacturing, think cost accounting, not making widgets. Because our work is historical, one of the major flaws, no matter the type and size of the entity, is that we usually react to change after fraud has occurred. When a new law, regulation or competition affects our employer or client, we fail to implement new […]

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FASB Issues ASU 2013-02 [FASB ASC 220]

New comprehensive income display guidance. by Thomas A. Ratcliffe, Ph.D, CPA Plain-English Accounting The FASB has issued Accounting Standards Update [ASU] 2013-02, entitled Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The ASU amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 220, entitled Comprehensive Income. The goal behind development of the ASU 2013-02 amendments is to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. The amendments to FASB ASC 220 do not change current requirements for reporting net income or other comprehensive income in the financial statements. Essentially, all of the information required to be displayed or disclosed in financial statements already are required to be disclosed in the financial […]

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Hackers Show How to Break into Major Accounting Software Systems

The hacker transfers receivables credit balances to payables in GP Dynamics (from the white paper) PRO members: Get the details in an instant download. by Rick Telberg When finance and accounting professionals worry about computer security, they may think about stolen laptops, purloined passwords, or lost backup drives. But few worry about hacker attacks against their accounting system software, the kind of attacks that could bring down an entire business or even up-end part of the global accounting system. Well, start worrying. A pair of computer science security experts has unveiled new research that shows just how easy it might be to crack into such commonly used software systems as SAP, Oracle, or even QuickBooks, Sage or Microsoft’s Dynamics. Get […]

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A&A UPDATE: Audit Sampling; Accounting Estimates; and COSO

[Free podcast for PRO members] Practical accounting and auditing guidance from the Plain-English A&A update service by Dr. Thomas A. Ratcliffe, PhD, CPA EXECUTIVE SUMMARY AU-C Section 530: Audit Sampling In implementing the clarified auditing technical literature, auditors need to consider the new audit sampling guidance in AU-C Section 530 along with the companion guidance in the AICPA Audit Guide that addresses audit sampling matters. AU-C Section 540: Auditing Accounting Estimates AU-C Section 540 of the clarified auditing literature provides new guidance associated with auditing accounting estimates and financial statement disclosures associated with those estimates. COSO Framework: Looking at Some Planned Guidance Now that the public comment period associated with planned changes to the COSO internal control framework has ended has […]

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A&A Report: Accounting for Long-Lived Assets; AU-C Section 520; Planned Nonattest Services Changes

[Free podcast] Practical accounting and auditing guidance from the Plain-English A&A update service by Dr. Thomas A. Ratcliffe, PhD, CPA EXECUTIVE SUMMARY:  Accounting for Long-Lived Assets: Addressing Impairment Issues When events or changes in circumstances indicate that carrying amounts of long-lived assets might not be recoverable, it is important to remember that these assets need to be evaluated to determine if impairment losses should be recognized. AU-C Section 520: Analytical Procedures As auditors implement the clarified auditing technical literature in calendar-year 2012 and subsequent period engagements, they need to understand and implement new guidance associated with use of analytical procedures in audit engagements. Planned Nonattest Services Changes: Preparing Statements Both the AICPA Professional Ethics Executive Committee and Accounting and Review […]

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Deloitte Drives 9% Revenue Increase, to $31.3 Billion

Should the world worry about mixing audit and consulting? Amid concerns among lawmakers worldwide that the audit function was being diluted by consulting, Deloitte Touche Tohmatsu is reporting $31.3 billion in worldwide revenue for the  year ended in May, an 8.6% advance for the year and the firm’s strongest increase since 2008. The revelations drew some sharp reactions. “It is hardly news that the Big Four accounting firms get bigger nearly every year,” says The Economist. “But where they are growing says a lot about how they will look like in a decade, and the prospects worry some regulators and lawmakers.”

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