Thoughts on PCAOB Oversight

by Hiller Hardie 1. February 2012 11:21
  My recent blog discussed the trend of the last several years of declining revisions of financial statements due to accounting errors or manipulations. As a member of the Accounting profession, I follow the activities of the PCAOB with interest (and often skepticism). Of particular relevance is their current slate of projects including mandatory auditor rotation, expanded audit reports and expanded roles for auditors beyond the traditional financial statements. As I focus on this, in view of the aforementioned decline in restatements, I tend to believe that we are going too far.   However, the unfolding story of Olympus and the depth and duration of the fraud perpetrated by their management paints a different picture.  The announcement that the PCAOB’s recent inspections of Big 4 firms have revealed numerous flaws in their audits is also pertinent   I am often tempted to think that the PCAOB should eventually go in to “maintenance” mode. In other words, they should allow the system to run as designed. Their actions should commence when audit failures transpire. Changes and remedies they put in place should be based on the findings from the investigations of such failures. That may ultimately prove to be naïve but at any rate now is not the time.
Categories: Advisory

Significant Support for Incorporating IFRS into GAAP

by Ken Urish 17. November 2011 13:33
In a letter to the SEC dated November 15, 2011, the Financial Accounting Foundation (FAF) announced that it supports the incorporation of IFRS into U.S. GAAP “as the appropriate path forward for the continued development of high-quality, investor-focused, international financial reporting standards.” FAF is the independent, private-sector organization with responsibility for the oversight, administration, and finances of the Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB and their Advisory Councils. FAF expressed its support for an incorporation approach that “advances improvements to U.S. GAAP and furthers the comparability and consistency of high-quality, investor-focused financial reporting standards throughout the globe.” Toward that end, it has recommended a number of modifications to the SEC’s proposed approach to IFRS incorporation. The proposed FAF approach is based on the premise that, over time, international standards will become the foundation of U.S. GAAP. Significantly, FAF believes that its proposed approach complements the SEC’s primary responsibility of facilitating investor protection in the U.S. capital markets, and that it reinforces the SEC’s goal of setting standards that provide necessary financial information to investors in our capital markets.
Categories: Assurance

Issues Nonprofits Must Consider for Corporate Governance and Risk Mitigation

by Ken Urish 11. August 2011 11:31
Audit committees provide a variety of benefits to nonprofits. An audit committee can implement an enhanced internal control structure, deter fraud, improve financial practices, advance financial reporting, and help nonprofits meet their accountability goals. [More]
Categories: Assurance